HEALTH CARE IMPROVEMENTS
August 16, 2002 - WAR REPORT NUMBER 33-2002
HEALTH CARE IM0PROVEMENTS: Market-driven efforts in favor of health care improvements are making their first appearance. How? Read on.

The Treasury Department and the Internal Revenue Service recently issued long-awaited guidance clarifying the tax treatment of health reimbursement accounts (HRAs).

HRAs were authorized by Congress in the mid-1990s. Under the Clinton administration, the democrats gave it little or no attention for some six years. Now, under a GOP administration with only 1 Ѕ years in office, this administration has clarified the tax treatment for HRAs. It appears that the democrats for some six years either didn't want to or couldn't provide this clarification. You decide. One thing is certain: Vote for GOP candidates in November if you want progress in controlling the escalating cost of health care. While you do the voting, I will continue to be the lone voice in the wilderness advocating market-driven health care improvements.

HRAs are to large employers as Medical Savings Accounts (MSAs) are to individuals and small employers. Frankly, I see no reason for separate tax treatment for anyone for their health care expenses. Illnesses and health problems know no employment boundaries. Tax treatment shouldn't either.

While this is a first step to market-driven improvement, it has the shadow of a liberal hand covering this market-driven concept. The new rules allow unused tax-free funds provided by employers to be carried over to later years. The rules have no "use-it-or-lose-it" penalties. However, employees cannot withdraw any of this tax-free money in cash to pay for health care. It's not their money, but the employers who makes all payments for health care. Again, the consumer is left out of the equation and this is a green light for overutilisation. When the escalating cost of health care continues, I can hear the democrats screaming for a single payer system similar to Canada and England. Why? Because "we tried the free-market approach and it didn't work."

Stay tuned! Why? Because I tell it like it is and it's your money. God Bless America.