Private Healthcare Spending Accounts Being Ripped Off!

NPR has an interesting story on private healthcare spending accounts. Seems money is missing from thousands of accounts:

Thousands of people are learning that money they squirreled away in health savings accounts is gone. Many thought the money was sitting safely in banks. But now it appears it was stolen.

Federal investigators have released few details, but all the cases have one thing in common: a Chicago company called Canopy Financial.

It is happening in Maryland as well, where 17 million dollars is missing:

Nearly 14,000 customers of Maryland-based Coventry Health Care also are affected. An attorney for the company, Neal Colton, says $17 million is missing. Coventry has replaced that money for its customers and will try to recover as much as it can in the bankruptcy.

One wonders how prevalent this is? At any rate some are calling for HSAs to be regulated but advocates of HSAs argue that regulation is premature and that the buyer should beware. Not exactly comforting considering the Republicans want to scrap Social Security and Medicare and throw people into private accounts.

5 Responses

  1. Is regulation needed, or do we need to be more flexible in how laws against theft are applied? Does it really matter how a crime was committed, and not that a crime was committed? I say we call it theft and prosecute it as such, and if some lawyer gets all tetchy about the way it was done, sanction the bastard and and strip him of his license to practice law.

    It matters not how money is stolen, only that it is stolen.

  2. Banking was deregulated and it cost the taxpayer over 700 billion.

  3. When did I say anything about deregulation, exactly? I’m talking about applying laws in general. Theft is theft and needs to be treated as such, for more detail you get into, the better your chance of missing something important. What was done is more important than how it was done.

  4. “Is regulation needed”

  5. To follow up, the lack of bank regulation cost the tax payers over 700 billion dollars, how much is the lack of regulation of HSAs going to cost? The banks, as far as I know, did nothing illegal, they just engaged in very risky behavior. At present nothing prevents HSA administrators from engaging in risky behavior and it is costing people a lot of money. Prosecuting the people at Canopy is great, but it doesn’t get the people their money back because they don’t really have much in the way of consumer protections covering them, so they come last in the bankruptcy proceedings when they should come first.

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