“Let’s jump to the bottom line: We could have all the advantages of all three accounts and none of the disadvantages if we combined them into one, easy-to-use account, with very few restrictions.
(Interestingly, Sen Ben Sasse (R-NE) has introduced a plan that would move us in this direction.)
There are three social benefits of self-directed care. First, people are always more careful when spending their own money than when spending someone else’s money.
Second, virtually all the patient-pleasing innovations that have occurred in recent years are for services people buy with their own money. For example, walk-in clinics emerged so that patients paying out-of-pocket could save on time and money. Online mail-order pharmacies came into existence to compete with local pharmacies for patients who buy their own drugs. Long before Covid hit, doctor consultations by phone, email and teleconferencing were available to millions of patients who paid for the services out-of-pocket. None of these innovations would have been likely if Blue Cross were paying all the bills.
Third, when patients are spending their own money, they get the full benefits and bear the full costs of their own decisions. That means one person’s wasteful decisions don’t impose costs on others. It also means that third-party insurance can be restricted to those activities that can’t be easily individualized. That makes third-party insurance less expensive and more efficient.”