Keeping the 'flex' in health care

WASHINGTON TIMES EDITORIAL

President Obama repeatedly has pledged that anybody happy with his or her current health coverage will be able keep it. Surely that pledge should apply as well to coverage that individuals provide for themselves through their own careful savings.

What do Democratic leaders have against individual economic choice? Amid so many other flash points in their various versions of health care overhaul, observers might have missed their attempt to torch the Flexible Spending Accounts (FSAs), which are popular with millions of Americans.

FSAs are funds that workers can set aside without being taxed for out-of-pocket health care costs that are not covered by insurance. As many as 35 million Americans use them, according to loose industry estimates. The funds already are somewhat self-limiting because they must be used within each calendar year rather than being carried over tax-free indefinitely. But they serve the valuable purpose of encouraging people to treat their ailments early rather than waiting until their condition gets so bad that they need more doctors' appointments, emergency-room visits or other expensive help.

In their efforts to put a few billion dollars of lipstick on a trillion-dollar pig, Democratic leaders have targeted FSAs in an attempt to find "savings" to pay for their massive government health care dreams. The theory is that taxing these accounts as ordinary income would bring more money into the Treasury. This theory, however, contradicts the message peddled in other contexts by the Obama administration that smaller, preventive care now will save oodles of cash from surgeries and hospitalizations later.

In May, the Senate Finance Committee announced that among the changes it would consider were "limiting the amount that can be contributed to an FSA or eliminating FSAs altogether." In July, the Joint Committee on Taxation actually adopted an amendment to H.R. 3200, the House leadership's main bill, that would disallow over-the-counter medicines from being bought with money from FSAs or related Health Savings Accounts or Health Reimbursement Arrangements. The committee estimated that this change would "save" $8.2 billion, over 10 years, from the trillion-dollar -- or, put another way, the one-thousand-billion-dollar -- reform boondoggle.

MORE... EDITORIAL: Keeping the 'flex' in health care - Washington Times

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