So, in an attempt to offer health insurance to more people, the U.S. House of Representatives proposed sweeping changes. Now, the debate over a so called 'public option' has played out over several months. However, I have not read or heard any commentary about health savings accounts.
Here's an interesting Bloomberg article that describes the efforts of the House and Senate:
"Employers increasingly are offering such accounts, said Beth Umland, director of research for health and benefits at Mercer, a New York-based human resources consulting firm. About 83 percent of employers with 500 or more employees had health spending accounts in their benefit plans in 2008, up from 52 percent in 1995.
"The plans let workers deposit money before taxes into accounts that can be used to pay health-related expenses. Typically, all the money must be spent within a year to 15 months or it’s forfeited.
"Under current law, depositing $5,000 to pay for a medical procedure such as laser eye surgery would save a worker in the 25 percent income-tax bracket $1,250 in taxes. An employee in the 15 percent tax bracket would save $750. Those tax savings would be cut in half under the proposal to cap the maximum annual contribution at $2,500."
So what's the deal? Why are we increasing the tax burden on middle-income workers and REDUCING options and competition?
