[Ghoulish Delight]

Having started using one of these tax sheltered medical expense deposit accounts myself, I actually like them.

The HMO model is extremely flawed. When it was designed, they never expected people to be using it in the manner that people do. It's not structured to handle the flood of people using the low deductibles and office visit copayments for every little minor cut and scrape. So the HMOs are having to pay doctors for far more visits than they ever anticipated. I don't blame the people who use the system that way. It's there, you're paying for it, use it any way that's legal. I blame the conception of the system.

As a result premiums are high. Astronomically high. And people have come to expect outrageously generous health coverage. And these people that expect this coverage, and don't expect to pay for it, get the shock of a life time the first time they get laid off and see what their Cobra payment would be. Suddenly bitching about having to pay $25 a month for the coverage they were getting seems really petty. And suddenly they realize they can make due with a slightly higher copayment, and fewer visits to the doctor.

Honestly, one of the best models I've seen is one in which groups of employers enter into what's essentially a collective bargaining co-op. Instead of providing insurance, they negotiate drastically reduced prices with groups of health care providers. The incentive for the providers is guaranteed business. The incentive for the employers and employees is that there is zero premium. You pay for the services you use at the discounted rate. Combine that with a pre-tax medical expense account, and it's an excellent system. Medical services begin to work as a competetive buyers' market rather than a price-fixed sellers' market.