Imagine going to the doctor with the flu and paying $30 for the visit and $10 for the medicine with no further medical bill.  Now imagine going to the doctor and finding out you have cancer.  You have enough money in the bank to deal with such a medical emergency and whatever you can’t cover, the federal government will pick up.  All citizens of the country in these scenarios have the same deal and the government only spends 4 percent of GDP on health care. Sound impossible?  Welcome to Singapore.

Touting arguably the best health care system in the world and a per capita income higher than America, Singapore is the answer economists have no doubt been shouting at their televisions during every health care debate the last eight years.  The Singapore health care system presents an ideal blend of left and right ideas on health care and still manages to be more free-market than U.S. health care has been since prior to the "New Deal."  Due to the creation of Medicare in 1965, the federal government has been spending more each year on health care; which has brought us to a current rate of 17 percent of GDP on health care.  As explained by senior fellow at the Manhattan Institute and Forbes writer Avik Roy, 

...if we measure the relative freedom of health-care systems by the dollar amount of government involvement in health spending, the French system is actually meaningfully freer than America’s.

Yet the French still spend thousands more per person on health care than Singapore.  So how does Singapore do it?  They call it the three Ms - Medishield, Medifund and Medisave.  Medishield is optional catastrophic insurance run by the government.  Should a consumer opt to use Medishield, the cost of services has a cap with the government covering the majority of the ultimate cost.  Singaporeans can alternatively purchase private catastrophic insurance.

Medifund covers the bottom 10 percent of income earners and is funded by interest the government has accrued from their initial investment in the program.  The program currently has $3 billion in interest.  Eldershield is also available to cover long-term medical care for those with severe disabilities and the elderly.  Between Medishield, Medifund and Eldershield, the left’s goal of universal health coverage is achieved with the added benefit of all being optional and very low cost to the government.  

The glue that holds it all together can be found in Medisave, which translates to health savings accounts (HSAs) in America.  85 percent of Singaporeans participate in the program, which redirects 20 percent of their income into a Medisave account.  For many Medisave pays for Medishield.  However, Singaporeans maintain complete control of their Medisave accounts and can choose from whichever public and private insurance options best meet their needs.  In giving citizens ultimate control over their health spending, as opposed to the government like in the U.S., Singapore has incorporated the free-market approach that those on the right know creates success.  Roy likens Singapore’s health care system to the way Americans view other types of insurance: 

We conservatives have long felt that the most market-oriented approach to health insurance is to think of health insurance the same way we think of all other insurance. Which is to say when we get car insurance, we don't use car insurance to pay for our wiper fluid, car wash or gasoline.  We buy car insurance so that if we crash our car or it gets stolen, we can cover that heavy financial risk that we wouldn't otherwise have.  And that's what health insurance should be too. 

So if you get hit by a bus, you have a stroke, you have a heart attack, you're going to the hospital and you would otherwise have this huge hospital bill, catastrophic health insurance would pay for that.  Say anything above $8,000, $10,000, all that would be covered by insurance.  If you had a plan like that it would cost almost nothing, those kinds of plans are very cheap.  It's when you have plans that cover everything under the sun, including your routine health expenditures, it drives up the cost of insurance.  

It's like an open bar.  Or when 8 people go out to dinner but you're splitting the check evenly, everyone orders lots of stuff thinking that, "Well I'm splitting the check anyway so what does it matter?" and then it ends up being a bigger bill.  It's like that with health insurance; everyone consumes more because they're not price sensitive, because they're not paying for it directly, everyone's bill goes up.  That's how our health insurance system works.  So if actually you move to a system where there's true catastrophic insurance, where just like with the car insurance or your homeowners insurance, if you really do get some calamitous event happen to you, you're covered.

As for routine medical expenses, that is where HSAs (Medisave in Singapore) come in.  Says Roy:

So what a health savings account does is it allows you to save for those expenses in a tax free way, the same way you would for a 401K.  So it's tax free, you can invest it, it can grow over time, any unused money you put in there rolls over to the next year.  So over time, if you stay healthy, you get rewarded.  Because if you're healthy but you keep putting money away in your HSA, over time you have a lot more money.  Where as if you're unhealthy then you spend it all, and so you have a much bigger incentive economically to stay healthy.  Where as in our current system with a lot of health insurance that covers everything, you don't have a lot of incentive to stay healthy because if you are unhealthy it is all covered by insurance.  If you are 400 pounds and you become a diabetic as a result of that, or you have chronic obstructive pulmonary disease because you smoke all the time, your insurance covers all of that; so you end up not having any economic cost.  But if you have an actual economic incentive to stay healthy and not smoke, go to the gym every once in a while, that’s what HSAs help you do.

So that system is more attractive on a lot of different levels than what we do today.  So conservatives for a long time have wanted to move the U.S. in that direction.  And actually the Bush 2003 law that gave us the Medicare prescription drug benefit also legalized health savings accounts; before that you really couldn't do anything with HSAs.  So now, actually, a lot of people have HSAs.  Millions of Americans have them and it's growing steadily every year.

For the skeptics, the proof is in Singapore.  Life expectancy at birth in Singapore is longer than in the U.S. and their infant mortality rate is less than half of America’s.   Singaporeans are healthier than Americans because in part, they are in charge of their health care spending.  

An additional benefit of a healthier population is a completely different experience when one does need to go to the doctor.  With less patients, individuals can spend more time getting personalized attention.  As one Singaporean put it, “I feel like I’m in a Norman Rockwell painting... only the doctor is Asian.”  In fact, Singapore is a top destination for those around the world seeking quality care.

So what does America need to do to get affordable, quality healthcare?  Well we know Obamacare isn’t the answer.  The CBO is already projecting the cost to double in the first 10 years.  While conservatives have been fighting hard to repeal Obamacare, talk of what should be done otherwise has been scarce.  
Perhaps the bigger question is can both sides actually work on something bipartisan for the good of the country?  The left wants universal health care and the right wants individuals to be in control of their own health care.  The Singaporean health care system proves that both sides can win.  

Roy maintains that spending is the most important aspect to him.  “If we can cover everyone, but we’re spending a quarter of what we’re spending,” he considers that a victory.  Whether or not Obamacare is repealed remains to be seen.  However, in either case our health care system was already broken and it’s time to come to the table with actual solutions.

When liberals try to fix the American health care system, they focus on all the wrong things. ObamaCare took the approach of covering the many uninsured, and forced all Americans to purchase health insurance they may not want or need. But the problem in America isn’t lack of health insurance, it’s the skyrocketing costs of health care. 

That’s why a patient-centered, consumer-driven approach is the only way to fix the health care system. Many Americans with health insurance plans are over-insured: they (or their employer, or another taxpayer) pay too much for benefits they may never use. 

What’s the solution? It’s not making sure more Americans have more insurance. It’s putting health care spending decisions back in the hands of the patients, because no one spends your money as well or as wisely as you. 

One way to do this is through health savings accounts, or HSAs. FreedomWorks has written extensively on the benefits of HSAs, but they make so much sense because they allow consumers to make smart choices about their own money, and expand freedom in health choice. When individuals are spending their own money, it causes them to be more fiscally responsible, and will lead to lowering health care costs.

If this is such a direct solution to lowering health care costs, why doesn’t everyone have an HSA? Current law only allows consumers to have an HSA if they have a high deductible & low premium plan, and places further restrictions on transferring money in and out of an HSA.

Despite restrictions on enrollment, however, more and more individuals are creating HSAs. In January 2011, 11.4 million individuals were enrolled in HSA qualifying plans. But one year later, in January 2012, 13.5 million individuals were enrolled. 

That’s an increase of 18% in just one year! According to John Goodman’s Health Policy Blog: 

The vast majority of this enrollment surge is in the large group category, which suggests that large employers are not waiting around to see what happens with the Affordable Care Act. They are moving ahead to increase consumerism with or without ObamaCare.

HSAs aren’t just a conservative idea, either. The top five states for HSA enrollment are Vermont, Minnesota, Montana, Utah, and Connecticut. Americans across party lines are realizing the benefits of personal control over health care spending.

Health Savings Accounts are not only a way to drive down overall health costs, they’re a responsible and reasonable investment for individuals looking to be fiscally responsible. To reform our broken health care system, we don’t need to spend more money, or raise taxes, or mandate individuals to do anything! We need to restore freedom and choice to the individual consumer, and encourage responsible spending. 

No one spends your own money as well as you do. Giving patients control over their money will drive down costs, as individuals start asking, “Wait, do I really need that procedure? Is there a cheaper way to do that?” More and more Americans are opening HSAs because they recognize the great benefits in having control over your own money. Americans don’t want to be wasteful anymore; we want to be money smart & fiscally responsible.

On June 28th, the Supreme Court released its ruling on the constitutionality of ObamaCare. The 5-4 majority, led by Chief Justice John Roberts, ruled that the individual mandate was unconstitutional according to the Obama administration’s justification of its constitutionality under the commerce clause, but decided to uphold the mandate as an exercise of Congress’s taxing power regardless.

After an initial wave of shock and disappointment, the ruling has proven to be a unifying call to action amongst conservatives. The phrase “full repeal” is on everyone’s lips, and we at FreedomWorks have a simple and straightforward 5-point plan to accomplish just that.

As originally planned, the repeal movement will continue to steam along through Congress. After conservatives take back the Senate and replace President Obama this November, we should be able to pass a full repeal law early next year. No matter what, as long as conservatives remain committed and engaged, ObamaCare will eventually be repealed.

But as we all know, that’s not enough. Health care costs are still skyrocketing, and our heath care system is still flawed. We need to replace as well as repeal ObamaCare. FreedomWorks has detailed several conservative solutions for replacing ObamaCare, and here’s another: expanding and strengthening Health Savings Accounts, or HSAs.

Health savings accounts are pretty simple, really. It’s a savings account for your medical expenses. Deposits made to your HSA aren’t hit with an income tax at the time of deposit, and the money in your HSA can be used tax-free at any time to pay for qualified medical expenses. Similarly to individual retirement accounts (IRAs), the tax treatment of HSA withdrawals for non-medical expenses differs according to the time of withdrawal. Health savings account funds can also be invested, just like IRAs. Money saved in an HSA rolls over from year-to-year, and can be passed on to a beneficiary after death.

HSAs encourage people to save for their future medical expenses. They also provide an incentive for people to take more care in making medical decisions, instead of agreeing to any and all proposed tests and treatments regardless of their medical benefit, since it’s their money on the line. This will help to reduce health care cost inflation. In addition, they expand patient freedom and choice by providing more flexibility, allowing patients to make health care decisions without government bureaucrats or insurance providers always acting as a gatekeeper.

As of now, only Americans with high-deductible insurance plans are allowed to start an HSA. If you’re unfamiliar with high-deductible insurance plans, they’re just health plans with low monthly premiums and high deductibles. Even if you’re on such a plan, the current law caps your total annual contributions to your health savings account.

The law also prohibits you from rolling your HSA funds into your IRA or 401(k), or from rolling 401(k) funds into your HSA. One time only, you may roll a capped amount from your IRA into your HSA. Furthermore, ObamaCare placed a new restriction on HSAs by mandating that only over-the-counter medications purchased with a prescription may be paid for with HSA funds, with insulin as the sole exception.

We need to expand and strengthen patient-friendly HSAs in order to allow more Americans to save money for their own health care and to continue driving down costs. Representative Bill Huizenga’s (R-MI) Health Freedom for Seniors Act and Representative Paul Broun’s (R-GA) Patient OPTION Act are two great, conservative bills that would do just that.

The Health Freedom for Seniors Act would allow seniors to roll their required minimum distributions from their retirement accounts (IRAs, 401(k)s, etc.) into their health savings accounts, tax-free. Current law prohibits those eligible for Medicare from establishing HSAs, thereby limiting the freedom of seniors to make their own health care decisions. Rep. Huizenga’s bill would put seniors in control, give them more options, and expand patient freedom.

The Patient OPTION Act takes a more comprehensive approach to reforming health savings accounts. First and foremost, the bill removes the high-deductible insurance plan requirement from HSAs, thereby allowing all Americans to start their own HSA. It substantially raises the cap on annual HSA contributions, and allows Medicare beneficiaries to contribute to HSAs as well.

The bill allows HSA funds to be rolled over into Medicare Advantage Medical Savings Accounts, or MSAs. Finally, the bill repeals a tax code provision that heaps an additional 20% tax on HSA withdrawals for non-medical expenses.

Together, these two bills provide a great framework for how to improve patient-friendly health savings accounts. Everyone knows that we must address the spiking costs of health care. Expanding and strengthening HSAs alone isn’t enough to do it, but it’s an important element in the conservative plan to repeal and replace ObamaCare with affordable, patient-centered health care.

TAKE ACTION: Urge your Members of Congress to cosponsor the Patient OPTION Act!

TAKE ACTION: Urge your Members of Congress to cosponsor the Health Freedom for Seniors Act!

Dear FreedomWorks member,

As one of our million-plus FreedomWorks members nationwide, I urge you to contact your representative and ask him or her to cosponsor H.R. 3819, the Health Freedom for Seniors Act. Introduced by Rep. Bill Huizenga (R-MI), the bill would allow seniors currently forced to take required Minimum Distributions from their retirement accounts (IRA, 401 (k)s, etc.) to instead roll that amount tax-free into an existing Health Savings Account. The Health Freedom for Seniors Act will expand the use of HSAs and increase an individual’s power over their own health care decisions.

Seniors must have more freedom to control their own health care decisions. Under current law, those who reach age 70 and one-half are forced to begin making “required minimum distributions” (RMDs) from IRAs and 401(k) plans. Anyone eligible for Medicare is not permitted to establish an HSA. The Health Freedom for Seniors Act would change this to allow seniors to be able to roll tax-advantaged savings account balances between different types of accounts.

One size does not fit all in health care. Seniors should be permitted to rollover their RMDs into an HSA. The Health Freedom for Seniors Act would give seniors more options while saving taxpayers’ money. HSAs let consumers control more of their health care decisions. It allows Americans to save tax-free dollars to pay for medical expenses and save for future health care costs. The accounts save money because high-deductible insurance is less expensive than low-deductible insurance.

Seniors should be eligible to enroll in an HSA. This bill would give seniors more freedom while savings taxpayers money. I urge you to contact your representative and ask him or her to cosponsor H.R. 3819, the Health Freedom for Seniors Act today.

Sincerely,

Matt Kibbe
President and CEO
FreedomWorks
[Click here for a PDF version of this letter.]