Monday, January 31, 2011

Flexible spending accounts: the only health care ‘reform’ we can hope for?

Bob, over at Planet Albany blog, is providing coverage of the New York Conservative 'Party' conference in Colonie, a suburb of Albany. He makes reference to former lieutenant govenror Betsy McCaughey, who made a national name for herself opposing health care reform under Bill Clinton and who is, not surprisingly, dead set against so-called Obamacare.

She said that there are indeed alternatives to Obamacare, blah blah blah... I’ll believe that when the House passes something concrete. Until then, it’s just empty talk. Besides, we know that if the Republicans actually ever passed a health care bill, it would be at least as bad, if not worse, than the Democrats’ awful plan. It would take us further away from the Medicare for All that would be cheaper, more comprehensive and more efficient than the totally dysfunctional system we have now.

It’s clear that neither the Republicans nor the Democrats are interested in real health care reform. They merely tweak around the edges, arguing about exactly how to give more power to health insurance bureaucrats and how to expand profits for the private insurance money changers.

Since both corporate parties are only interested in making the tiniest changes possible so they can claim the mantle of 'reform,' here’s one: flexible spending account (FSA) reform.

FSA is where you can put aside a small part of your paycheck tax free to use on medical expenses. But there are several problems with the way FSA is structured.

First, flexible spending accounts are actually quite inflexible. You must decide before the year even starts how much per paycheck to put aside. Once decided, it can not change under any circumstance (except, I believe, the birth of a child or death of a spouse). This is fine if you have access to a crystal ball or are related to a time traveler.

For example, I put aside $260 a year ($10 per biweekly paycheck). That’s plenty to cover an ordinary year’s medical expenses for me: a physical, an eye appointment and glasses or contacts, contact lens solution.

But if I get injured during the year or get diagnosed with an illness or condition or something else happens that I CAN’T PREDICT, what’s left of that $260 is going to disappear in a heartbeat and I will be out of luck. You should be able to increase your FSA contribution during the year to account for unexpected changes in your health condition.

Another major problem with FSA is that it’s use it or lose it. If you don’t use all of the money in your account by the end of the year, it disappears into the pocket of, surprirse surprise, the insurance company. Essentially, this is a system that fines you for being healthy and encourages you to be wasteful.

This can be remedied in one of two ways. Either the balance remaining in your FSA should be refunded to you on Jan. 1 (and thus it becomes taxable) or it should be rolled over so it can be used in the next year. Your money shouldn’t disappear into the insurance racket’s coffers.

What’s worse is that recent inexplicable changes make it so you are unable to use FSA money on legitimate medical expenses like such as aspirin and cough medicine. As of Jan. 1, 2011, you can only use FSA for prescription medications.

Again, this is only tweaking around the edges of our dysfunctional health care system, which critics say can be more accurately described as 'sick care.' But since we can’t expect any more from the RepubliCrats, maybe they’ll take up these changes.

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