The Glade 4.0

Good article from Megan McArdle on what exactly healthcare insurance means in relation to what resources you have, this part in particular resonated with me:

http://meganmcardle.theatlantic.com/arc ... enefit.php



and



The whole things is good though, read it at the link above.

_________________
“Strong people are harder to kill than weak people, and more useful in general”. - Mark Rippetoe

There's no point in putting out an opposition health bill, because a certain house speaker is unlikely to give it any air time. This is how a bill to audit the fed that has over 200 sponsors fails to see the light of day.

Now I hope we have real debate on Thursday rather than just the President preaching at us for the most part and a couple of people backing him up.

_________________
I prefer to think of them as "Fighting evil in another dimension"

Catastrophic coverage plus a health savings account is really the best option. The government could even pay for the catastrophic coverage, because it's really cheap. Doctors will give you massive discounts if you pay cash. I'm really starting to lend towards this option myself, because I've discovered that all the things I have 50% coverage for on my health insurance are really useless. If you offer to pay cash, they will often give you the treatment for close to half price anyway. Then when you consider an HSA is also tax-deductible there's really no contest.

The problem is the vast majority of Americans don't have the self-discipline to actually save any money for these things. They'll get sick and have to pay $10k out of pocket and then complain that their health care is terrible.

I have an HSA and I think it's a great option for many people. I agree with you though X, people wont pay into it and then complain later. Really, what is my obligation to people like that? Why should I care if they dont?

Sort of along those lines:

http://online.wsj.com/article/SB1000142 ... 72742.html



Who would get comprehensive insurance if you could just pick it up once you actually got sick? You'd grab some cheap basic coverage and let it ride or pay out of pocket. Of course that'd lead to bankrupt companies or insanely high premiums.

_________________
“Strong people are harder to kill than weak people, and more useful in general”. - Mark Rippetoe

Other than minor issues with portability, the major issue remains Medicaid and Medicare, as they set billing standards and payment standards.

_________________

Which nobody will touch.

Way too easy to demagogue and old people vote in high percentages.

_________________
“Strong people are harder to kill than weak people, and more useful in general”. - Mark Rippetoe

Don't you have to spend everything in your HSA by years end?

_________________

No. You can use it the next year. Also if you switch to a different healthcare provider, you can transfer the funds.

You're thinking FSA, or Flexible Spending Account. That usually requires you to spend all funds by the end of the year (or March, depending on the kind of plan). HSA is a Health Savings Account. On top of paying a health insurance premium, money is deposited into a permanent account, sometimes with an employer match, up to a certain maximum. The money sits there until you use it all. The only thing that sucks about moving to this plan is the first couple years while you build up your padding. If you have a bad year or two, its really gonna hurt if you don't already have up ancillary savings somewhere else.

_________________
The Dude abides.

Actually, a really bad year or two is one of two points where the plan makes the most sense, since you have an absolute max outlay, which at $2700, is probably no more or less than you would pay in co-pays and other expenses for a single hospital stay plus a doctor's appointment or two. After that amount, everything is covered.

I dunno, I still look at that as a lot of money.

The other plans my work offers don't have that kind of deductible before the 100% kicks in.

_________________
The Dude abides.

Oh, its a lot of money, no question. I was just making the point that the two points at which the HSA with a HD plan work is someone that never gets sick, or someone that is in terrible health. The in between people are stuck, kind of, because there isn't as much advantage in the cost savings (outside of premiums) of a HD plan over a PPO.

Your deductible resets every year no? So if you have a chronic condition or get a serious long-term illness then every year you are responsible for that deductible without the ability to replenish your HSA right?

_________________

Yes, the deductable on your HDHP resets annually just like it does for a PPO.

That said, an HSA isn't exclusive to a HDHP. You can also have an HSA in conjunction with your typical PPO. And don't think of your HSA as a long term savings account or retirement account (though it can become one if you are overall healthy). It is intended to be a means by which to use pre-tax money to pay for medical care, as opposed to post-tax money. If you are healthy and your annual expenditures don't exceed your contributions, then that tax free money rolls over (and probably earns tax free interest while in the account). And currently, I believe the max annual contribution to an HSA is slightly higher than the max annual medical expenditure (I believe for our plan, the max contribution is $2,900 for an individual while the max annual medical cost is $2,750).

One other thing, your HSA is not directly tied to your HDHP or PPO in terms of what you can use for reimbursement. You can also use those pre-tax dollars for the purchase of many over the counter or subscriptions, such as aspirin, eye glasses, contacts, etc. The argument there of course, is that if you have those annual expenses, it is in your benefit to put that money into the account and get reimbursed for the expenses when they occur. As long as the expenses are medical (there is a list of what counts and what doesn't from the Fed gov), the reimbursements are tax-free. If you end up using the money for non-medical reasons, those funds have to be claimed as income on your tax statements when you file the next year (maybe penalties associated similiar to an IRA, since an HSA is basically a 529 or IRA).

But you probably pay a premium for that plan no? In my case, it's pay 2500ish in premiums for the plan or... go HSA, pay a tiny premium (500 bucks I think it was) and contribute money to my account tax free. Not to mention my company kicked in 1000.00 bucks for the HSA last year. Then if I dont use it, I get to keep it. Not so with the premium, you pay that no matter what obviously. So:

Traditional plan: 2500.00 premium. No deductible. 10-15$ co-pays etc.
HSA: 500.00 Premium. Company gives me 1000.00 (similar to a 401k match kinda thing). I have them take out 2500.00 from my paycheck tax free to go into this account. If I use it I use it, if I dont I keep it.

Great deal for me. Guy at work uses it too and he has an existing medical condition so he knows he's gonna be paying money. He used the HSA too and it's working for him.

_________________
“Strong people are harder to kill than weak people, and more useful in general”. - Mark Rippetoe

When we first offered the HDHP, because the premium for the plan was less than the traditional PPO, to keep everyone's benefits package the same in value, the company contributed the difference between the two premiums into the HSA of those that opted to join the HDHP. The first couple years it amounted to around $1,000.

Well, insurance through my work was a rip-off. The HSA plan through BCBS was about half to 70% the PPO plan without any money being paid into it. They were both rip-offs anyway for what you got, so we went with my wife's insurance instead. Mine used to be better when we first got married. Now her insurance is TONS better.

_________________
The Dude abides.

Just to clarify for those not familiar with the acronyms, an HSA is not an insurance plan. it is a tax free account where the funds are earmarked for medical expenses.

High Deductible Health Plans and PPOs are insurance plans generally offered through private employers.