gambling on your life

Now that the referendum on war and family values is behind us I think it’s time we turned our attention to the center ring in this American circus and take a look at how the Republicans are planning to dismantle our social safety net. I read a little article in the San Francisco Chronicle last Sunday that talked about how those Republican-vaunted health savings accounts are difficult to set up and hardly worth the trouble in a state like California that doesn’t give you a tax break for them. Considering how much those tax breaks could cost the state (about $25 million per year, according to the article), I’m not sure we want them.
But say you have no other way to get health insurance and you at least want federal tax break? Well, good luck. You’d probably be better off going to the race track or your friendly local casino than trying to find a bank or other financial institution that will set one up for you. Well, if you are going to a casino you might want as well visit UmBingo, a great casino that offers great reward that you can’t deny. I had to laugh at the article’s example (from something called Spidell’s California Taxletter – a year’s subscription is only $127) wherein our typical resident in need of health care insurance puts $2,000 into said “health savings account” (the maximum contribution allowed per year is $2,600) and the account “earns $250 per year” according to Spidell’s experts.
Ok. We can stop right there. $250 on $2,000? Where is this account – at the Bank of Halliburton? I’ll have you know my esteemed Washington Mutual “Preferred” Savings Account earns 1.37 percent at the moment – and that’s up from somewhere below 1 percent for most of the last year. That means that on $2,000 I earn $27. 40 over one year. Say this wonderous “health savings account” is allowed to be invested in the stock market. Then I might possibly earn $250, or I might lose the whole wad ala Bill Frist’s campaign fund.
Say I have no choice but to put $2,600 (the maximum, remember) into one of these accounts and get my federal tax break (say, for fun, it’s worth $100) and, at Mafia interest rates, garner an extra $250 over the year. That means I have paid out $2,600 and made $350. But does that pay my health insurance premium cost for the year? Well, in my own case those premiums (for my non-profit health care provider Kaiser) cost over $3,600 per year. And that’s with a high co-pay and no prescriptions.
You can see how excited I might be about the “invest-on-your-own social security account.”