Monday, January 17, 2005

Social Security Privatization and Medical Savings Accounts

My wife had some eye surgery today to complete a procedure she started in September 2004. We noticed how much busier the waiting room was today versus her first appointment. The staff remarked that this was because in the first half of the year, people are using up the amounts they have set aside in their Medical Savings Accounts. Hence, the waiting room was fuller in January than it was in September.

It seems to me that this is a pretty good analogy to the type of behavior-changes we might expect to see under any Social Security privitization -- taxpayers incentivized to consume (in the form of saving, perversely enough!) as a result of the tax break afforded by privitzation. I haven't fully worked out the full applicablility of this analogy in my own mind. I am only throwing this out now as food for thought. Meanwhile, I am going to do some digging to see if anyone has done a study along the lines of how Medical Savings Accounts have increased discretionary consumer medical spending.

Let me have any of your comments.

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