In 1960, President Kennedy promised the U.S. would put a man on the moon within a decade. The experts scoffed, saying it was impossible based on the science, or the lack of it. Nine years later, Neil Armstrong stepped on lunar soil.
Today, talking heads as well as the public believe that fixing healthcare is impossible – it can’t be done! Doctors Ginn and Waldman disagree. They ascribe to the optimists’ credo: the difficult we do today; the impossible takes a little longer.
The burning platform theory says that people will refuse to get off a shaky, unstable, dangerous platform but will quickly vacate if it is on fire. Healthcare is on fire. People are likely to accept big changes today that they would have resisted years ago. Healthcare has reached its tipping point. The formation of DOGE is proof that fundamental change is possible.
Our New Year resolution for 2025 is to cure our impossible-to-fix healthcare system. The cure should produce a system that will allow Americans to obtain the care they want when they need it while simultaneously breaking the national addiction to overspending. The cure will require many, substantive changes over time. The impossible takes a little longer.
The first step is to pay American workers all the money they earn. The so-called benefit of employer-supported health care is an obsolete, market-distorting holdover from wage freezes enacted during World War II that deny workers all they are owed. On average, employers are currently giving $23,968 of employees’ earnings to insurance companies instead of paying that money to employees. Step #1 in the cure is paying the $23,968 to employees, not to insurance.
The natural place to park these funds would be some type of bank account for medical expenses. That is a problem. There are at least three different forms of such accounts: Health Savings Account (HSA), Flexible Spending Account (FSA), and Medical Savings Account (MSA). Each has multiple different governing regulations – federal, state, and various insurance plans. Some have use-it-or-lose-it time limits. Several insurance plans do not accept such accounts.
HSAs have contribution limits such as maximums of $4150 for an individual and $8300 for a family. Thus, at least $15,668 of earnings cannot be contributed at present. Furthermore, federal regulations stipulate what are allowable medical expenses and what are not – a choice that should be made by the patient not the government.
Restrictions on HSAs are a form of government control where regulations are unnecessary, inappropriate, and costly. Americans should be free to spend their hard-earned dollars as they see fit. Medical outlays should be tax-free for employees as they are now for employers.
Next, it is necessary to unleash the power of an HSA but in a new, simplified and unlimited form, starting with its name.
The purpose of healthcare is Care. The function of healthcare dollars is to Spend on care, not saving them. Thus, the new medical account should be called a Care Spending (not Savings) Account or CSA. There is no need for other accounts like the current HSA, MSA, or FSA.
There should be no limit on how much a family can contribute to an CSA and no time limit to use these funds. The account should be passed across years and generations. CSA monies can be spent on any health-related expenditure. In addition to standard care, medications not approved by the FDA (like ivermectin for COVID), crystal therapy, aromatherapy, and other forms of alternative medicine should be allowed while a big screen TV or a new automobile should not. If a family wishes to spend their CSA money on medical expenses for a non-family member, that too should be allowed.
In other words, Americans should be free to engage in tax-free spending on their medical care with no government direction, regulation, or coercion. Just because the Biden Administration labeled short-term insurance as “junk,” doesn’t mean Americans should be prohibited from purchasing it.
The CSA would require no regulatory apparatus other than IRS oversight. It will eliminate the need for and spending on the BURRDEN – Bureaucracy, Unnecessary Rules and Regulations, Directives, Enforcement, and Noncompliance activities – of HSA, MSA, and FSA. This will save billions of taxpayer dollars and improve access to reliable, timely care.
With more than $20,000 per year in an CSA to spend directly on care, and no third-party insurance costs or expenses for BURRDEN, providers can offer consumers drastically reduced prices for cash-only services and goods. Suddenly, that $2500 MRI would cost $750, easily affordable from the CSA. Even the $15,499 price tag for hip replacement at cash-only Oklahoma Surgery Center is not a problem. And for the rare, six-figure heart attack or cancer chemotherapy, there is high deductible catastrophic insurance (when and if Washington will stop over-regulating insurance.)
The CSA shows the impossible is possible: it saves consumers’ money and simultaneously pays more to providers. A standard charge through insurance for hip replacement is $35,114; Medicaid pays $12,922. As noted previously, the cash-only, no insurance charge to the patient is $15,499, not $35,114. Payment from the CSA to the provider is $15,499, not $12,922. And, the provider is paid immediately, not after two years of aggravating insurance reviews.
While many more actions are necessary to make health care accessible and affordable, the first two steps are as outlined. (1) Pay workers ALL the money they earn and let them spend it as they choose. (2) Provide a tax-free spending haven for medical expenses with a no limit (time or money) CSA.
The next part (step #3) of the New Year resolution involves turning Medicaid into a functional and sustainable medical safety net, which it most certainly is not.
Deane Waldman, M.D., MBA is Professor Emeritus of Pediatrics, Pathology, and Decision Science; former Director of Center for Healthcare Policy at Texas Public Policy Foundation; former Director of New Mexico Health Insurance Exchange; and author of 12 books, including multi-award winning, Curing the Cancer in U.S. Healthcare: StatesCare and Market-Based Medicine. Follow him on X.com @DrDeaneW or contact via www.deanewaldman.com.
Vance Ginn, Ph.D., is president of Ginn Economic Consulting, host of the Let People Prosper Show, and previously chief economist of the Trump White House's Office of Management and Budget. Follow him on X.com at @VanceGinn.
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