Driven by a philosophy that favors unbridled faith in the free marketplace, the year 2003 may well go down in health care history as the year that the health care system officially abandoned the premise that the community has a responsibility to care for each member, replacing it with the philosophy that individuals should each look after themselves.
The most visible change that nudges the system toward self-insurance is the provision in the Medicare bill that expands and makes permanent “health savings accounts” (HSAs) (formerly known as “medical savings accounts” or MSAs). This provision allows most Americans to set up tax-advantaged savings accounts (no tax is paid when money is paid in or when paid out, an unprecedented new tax loophole), when they also have a high-deductible health insurance policy. These new accounts are likely to favor the healthy (who stand to benefit financially from a new tax shelter since their accounts need not be depleted on health care expenses) and the wealthy (the higher tax brackets mean higher tax benefits).1 In his State of the Union address, President George W. Bush's proposal for a new tax deduction for premiums for high-deductible policies introduced the possibility that health savings accounts' penetration of the marketplace—and the demise of the employer-based health care system—will be accelerated.2
The second development is the encroachment of so-called consumer-driven health care plans (CDHC) into the employer-based health insurance marketplace. This new approach is dressed up with a consumer-friendly name, but in reality, as noted in Christianson, Parente, and Feldman (2004, this issue), this new approach is characterized by higher deductibles for employees. A more apt label, and one that seems to have been overtaken by CDHC, is “defined contribution health care.” As a gentle reminder to health researchers and policymakers that a consumer-friendly name should not be used to mask a marketplace change that may be harmful to consumers, I will use the “defined contribution health plan” (DCHP) label to refer to these new plans. “Defined contribution” accurately connotes limited employer liability for health care costs. “Consumer-driven” implies that the consumer exerts considerable control—hardly an accurate portrayal of high-risk consumers' likely experience with a high-deductible plan.
The two studies raise red flags about the potential for these new plans to appeal disproportionately to the healthy and those with high income. They contribute to the dangerous distraction of policymakers from the goal of working toward a health care system that provides affordable, quality health care to all by spreading costs broadly and fairly across the community.