Don't Tread On Me (or My HSA)

There is a general feeling in this country that we are slowly becoming a socialist nation. From the highly redistributive economic policies, to the governmental antipathy toward private property, to the government ownership of large sectors of the economy, to emerging signs of the government co-opting non-political organizations to advance its agenda, and, well, to the presence of avowed socialists within the highest reaches of the government and creepy cult of personality indoctrination. This may be quite troubling for those who love their liberty, as it is to me, but the accusation still gets dismissed by the MSM and the political left because of the greyness of the policy drift - it is hard to delineate the shift in black and white. Students of history, however, know that you don't get to socialism via the express train passing well-delineated signposts, you creep toward socialism. So it is important to mark the journey at each small sad, albeit grey, increment and fight losing but one inch; and, thankfully, Americans seem to be coming to this realization and waking up. Still it is helpful to be aware of signposts along the way that ought to transform our vigilance into something more urgent. We have these grey signposts all around us, but what of something more black and white, more starkly and clearly a sign that we have crossed a dangerous line from a free, constitutional republic to a bona fide statist or social system? To me that black and white signpost is en masse confiscation of property. I don't mean taxation, I mean outright usurpation. The best example I can cite is Argentina's recent takeover of private pensions. The best way to describe it is if the government seized everyone's 401K or IRA or similar plan, just took the assets - the stocks and bonds and cash - and gave them over the Social Security Administration to pay your social security checks (actually, get ready, b/c the usurpers already have ideas). We aren't there yet and I hope there will be bloody hell to pay if such a proposal was ever so much as whispered in the halls of government here; but, we may be approaching a smaller version of that signpost with Health Savings Accounts.

As you may know, HSAs allow Americans to buy low cost-high deductible health insurance and stick pre-tax money into a special savings account for out of pocket healthcare expenses. The justification for this vehicle is that 1) the tax break provides incentive for people to save for their medical costs and 2) the individual control of the account gives people the incentive and the opportunity to spend more wisely and make their healthcare dollars go farther. HSAs are a major component of the free market approach and policy menu for healthcare reform. Expanded by President Bush, HSAs are getting more popular. But HSAs are not on the table in the Democrats' healthcare reform plans, and you know what they say about you if you are not at the table. HSAs are set to be devoured in ObamaCare or BaucusCare or PelosiCare or whatever we get from the Dems. But what does that mean? Will they lower or simply take away the tax deductibility of future contributions to HSAs? Or will they do something more, like tax your HSA's current balance to zero, or simply take it via some other coercive method? I don't know and not even the experts know (probably because the bills are being hidden from not just the public but from most members of congress). One healthcare policy expert told me today, "congress hasn't said they'll tax legacy HSA balances, but if that makes you feel safe, you will soon be parted with your money."

What happens to HSAs could be our next (first?) black/white signpost on where this country is on the road to serfdom. Many Americans have hundreds if not thousands of dollars sitting in their HSAs, put there under the good faith assumption of no taxation and full control. If the government confiscates those legacy balances via taxation or other method we will have crossed an unmistakable signpost. Argentinian-style confiscation of other assets won't be far behind. In WWII-buff parlance, HSAs are Munich. We should heed Clemenza's history lesson. Watch what is proposed to HSAs very carefully, America.