A kind reader wrote to ask why I think the Democrats are against medical savings accounts. It's an interesting question, since their opposition to MSAs places them to the left of the People's Republic of China.
I think there are several reasons why the Democrats fight MSAs. First, despite the calamity of the Clinton health debacle, many on the left still dream of nationalized health care. They see as inevitable a US move towards the European social model. There is a reason they call themselves "progressives," after all. They truly believe that human progress requires a greater and greater nanny state. MSAs, on the other hand, represent a step back to the evil days when people actually paid their doctor themselves. They pine for a single-payer model, while widespread MSA ownership promises to create a million-payer system. Fundamentally, medical statists don't trust people to be able to manage their own health. I suspect the recent spike in health insurance premiums has given many on the Left secret hope that our system will soon collapse and America will be forced to adopt socialized medicine. If I were inclined to believe in conspiracies, I'd think that they oppose MSAs because they fear they will work too well.
But there is more to the Democrats' opposition to MSAs than mere Europhilia. Leftists are also obsessed with equality and victimhood. To their way of thinking, the sick are already victims of illness and fate, and if you ask them to be responsible for any portion of their own medical expenses, you are just further brutalizing the poor dears. MSA proponents, in contrast, see medical spending as a consumer good, subject to the same laws of supply and demand as any other. If someone makes greater use of a service, it is only fair that they pay for their usage. Medical statists heartily disagree. They believe that medical costs should be equally divided among the sick and healthy. And they've done their best to enforce this idea by passing various insurance mandates at the state level. Some states actually force insurance companies to charge everyone the same premium regardless of age, medical history, or health status. They see this as preventing "discrimination" against the sick. In practice, though, it forces the young, who tend to be healthy and poor, to subsidize the health care of the old, who tend to have more health problems and more resources. See these two reports for a look at the correlation between state mandates and rises in insurance premiums.
And finally, there is another reason that Democrats oppose MSA's, one which is not often discussed. MSA's are designed to supplement high-deductible health insurance for catastrophic care, and the main dispute is over whether such accounts should enjoy the same exclusion from income taxes as employer-funded insurance premiums. But many advocates of MSA's also view them as a vital part of a move away from the current employer-based system. They'd like to see instead a system that gives everybody a tax credit to purchase their own insurance. And while this would be very helpful to the working poor, for whom the Democrats always claim such concern, it is deeply opposed by a far dearer constituency. Unions have for decades negotiated very generous health insurance for their members. Thus, under the status quo, a significant portion of their compensation is sheltered from income tax. They are among the biggest winners in the employer-based system and don't want to jeopardize any of their hard-won benefits.
Because of Big Labor's opposition, the Congressional Democrats won't support anything which might undermine the current employer-based system. Most recently, they even held up passage of the economic stimulus package for months because it provided health insurance tax credits for the unemployed. Ultimately, the bill passed only when the tax credits were removed. I am fascinated by the fact that the Democrats would rather the jobless have no health insurance than benefit from a tax credit.
The Democrats seem to think that, if only America would stop focusing on the war, health care is an issue with which they could win back the House. But, so long as they oppose real reforms like tax credits and MSAs, in favor of a system that is failing many hard-working people, I think they are fooling themselves.