Hoosiers and Health Savings Accounts -- They work

[charrison]

When I was elected governor of Indiana five years ago, I asked that a consumer-directed health insurance option, or Health Savings Account (HSA), be added to the conventional plans then available to state employees. I thought this additional choice might work well for at least a few of my co-workers, and in the first year some 4% of us signed up for it.

...

Unused funds in the account—to date some $30 million or about $2,000 per employee and growing fast—are the worker's permanent property. For the very small number of employees (about 6% last year) who use their entire account balance, the state shares further health costs up to an out-of-pocket maximum of $8,000, after which the employee is completely protected.

...

The HSA option has proven highly popular. This year, over 70% of our 30,000 Indiana state workers chose it, by far the highest in public-sector America. Due to the rejection of these plans by government unions, the average use of HSAs in the public sector across the country is just 2%.

...

Overall, participants in our new plan ran up only $65 in cost for every $100 incurred by their associates under the old coverage. Are HSA participants denying themselves needed care in order to save money? The answer, as far as the state of Indiana and Mercer Consulting can find, is no. There is no evidence HSA members are more likely to defer needed care or common-sense preventive measures such as routine physicals or mammograms.

It turns out that, when someone is spending his own money alone for routine expenses, he is far more likely to ask the questions he would ask if purchasing any other good or service: "Is there a generic version of that drug?" "Didn't I take that same test just recently?" "Where can I get the colonoscopy at the best price?"

http://online.wsj.com/article/SB100...470293066.html?mod=WSJ_Opinion_LEFTTopOpinion

read it all.

This is what simple effective reform looks like. Put the consumer back in charge and medical expenses will drop.

 

[Throckmorton]

Short term costs aren't the same as long term costs

 

[ProfJohn]

Sounds like a good idea, hence most of the liberals on this forum will totally ignore this thread and hope that it goes away.

After all, the know that the only way to solve our problems with healthcare is to put someone from Washington in charge of all our medicare decisions.

 

[charrison]

Short term costs aren't the same as long term costs

read the article.

 

[Slew Foot]

When the end used doesnt care what the cost of the service is, the costs will always rise (health care, education, housing boom).

 

[sMiLeYz]

Sounds like a good idea, hence most of the liberals on this forum will totally ignore this thread and hope that it goes away.

After all, the know that the only way to solve our problems with healthcare is to put someone from Washington in charge of all our medicare decisions.

I consider myself liberal, but a good idea is a good idea. Since I freely admit, I have only the slightest ideas of the upsides and downsides of HSA. I'd welcome a national rollout of an HSA based plan if adequately solved the solutions to our healthcare in the US.

If say the nonpartisan Congressional Budget Office, or a major university did an analysis of the the two plans and it ends up that the HSA bill is superior and more cost effective than the current healthcare proposal. I will concede that point.

But if it turns out the other way, would you concede the argument here? What if a single payer turns out better than both plans, would you support it?

This isn't a partisan deathmatch, I'll support anything that makes our healthcare in this country better and cheaper. I'm willing to put aside my biases, are you?

 

[Carmen813]

I've explained before why I'm against HSAs.
The cliffs:
1.) They are very poor choices for the working poor (i.e., people making 20k-40k a year) due to the high deductibles and relatively modest tax breaks at this income level.
2.) They pull healthy, young people out of the PPO insurance pool, causing premiums to rise for people who are older.
3.) They suck for the chronically ill.
4.) Due to these factors, most health care professions say that HSAs actually raise costs.

 

[charrison]

I've explained before why I'm against HSAs.
The cliffs:
1.) They are very poor choices for the working poor (i.e., people making 20k-40k a year) due to the high deductibles.

That depends upon how they are structured. If they are employeer provided with enough fund to pay for annual out of pocket expenses, then this is not a point. This appears to be how indiana, safeway, whole foods and others are funding their insurance.

2.) They pull healthy, young people out of the PPO insurance pool, causing premiums to rise for people who are older.

Of course many of those young people are currently opting out of having insurance at all because they are having to buy way too much insurance for their needs. The young people are a very large chunk of those that do no have insurance.

3.) They suck for the chronically ill.

Of course the chronically ill are going to be a problem no matter what kind insurance they have.

4.) Due to these factors, most health care professions say that HSAs actually raise costs.

source please.

 

[Carmen813]

Source:
http://www.commonwealthfund.org/Con...y-They-Wont-Cure-What-Ails-U-S--Health-C.aspx

The chronically ill (or those who require ongoing medication) typically are much better off on standard health insurance policies.

 

[charrison]

Source:
http://www.commonwealthfund.org/Con...y-They-Wont-Cure-What-Ails-U-S--Health-C.aspx

The chronically ill (or those who require ongoing medication) typically are much better off on standard health insurance policies.

Was requesting the source for #4.

 

[Thump553]

HSAs have been national for at least 5-10 years, if not more. They have some income tax benefits, especially for higher income people.

I'm one of the few posters here who actually buys his own health insurance. At least once a year I spend a half day or so pricing the various options available to me. Every single time I've checked plans with a $10,000 HSA cost substantially more (10-30&#37 than conventional health insurance with a $10k deductible, plus you have to come up with the $10k cash up front (note to the uniformed-you need to suffer deductibles like this to get health insurance even remotely reasonably priced).

Speaking of HSA's there is a major scandal where a company holding millions of dollars of them was looted by its executives and is now in bankruptcy. Turns out regulatory oversight is nearly nonexistent and there is no FDIC type insurance for the HSA's, so those people are out thousands of dollars cash.

Conclusion-definately nowhere near a cure-all, possibly a decent alternative for some IF decent regulatory oversight put into place and something like FDIC coverage is provided.

 

[Genx87]

Every HSA I have been part of has a 3rd party bank handle the savings account. Which insurance company was taking deposits directly and then folded?

 

[Double Trouble]

My employer provides an HSA with a third party provider handling the actual money / accounts / distributions etc.

An HSA is basically self insurance, up the max out of pocket. It's catastrophic insurance, but everything else you're on your own. There are pros and cons to them, and anyone who thinks health care is not sometimes compromised is smoking something. When people are on the hook for the full fee of whatever service they use, they'll start making medical decisions based on finances instead of medical considerations. Clearly, there is benefit to having the consumer on the hook for expenses, it makes them better consumers, but not to the point where it causes them to make medical decisions based strictly on finances.

 

[Thump553]

Here's an article about the HSA embezzlement:

http://goliath.ecnext.com/coms2/gi_0199-6429651/HSA-EMBEZZLING-CASE-A-HEADS.html

I first heard about this on NPR and the story mentioned that the third party holding the HSA money was often hidden behind one or two other corporate entities. Often times people didn't know anything about the problem until their HSA charge card was declined at the doctor's office. Hopefully it hasn't affected you two, but I'd check it out right away.

Here's a link to the (audio) NPR story. Good luck.

http://www.npr.org/templates/story/story.php?storyId=123274765

 

[CaptainGoodnight]

Here's an article about the HSA embezzlement:

http://goliath.ecnext.com/coms2/gi_0199-6429651/HSA-EMBEZZLING-CASE-A-HEADS.html

I first heard about this on NPR and the story mentioned that the third party holding the HSA money was often hidden behind one or two other corporate entities. Often times people didn't know anything about the problem until their HSA charge card was declined at the doctor's office. Hopefully it hasn't affected you two, but I'd check it out right away.

Here's a link to the (audio) NPR story. Good luck.

http://www.npr.org/templates/story/story.php?storyId=123274765

Fraud is not something specific to HSAs. It happens in PPOs and other organizations as well.

 

[Carmen813]

Was requesting the source for #4.

What type of information are you asking for? I doubt I can find you anything like a scientifically validated poll. It was my opinion based on having read lots of information about HSAs. For example, I know many mental health professionals are against HSAs because they harm treatment of the mentally ill.

I should note that I believe greater customer involvement in health care decisions is important. I just don't think HSAs are the right way to do so.

Some more reading: http://www.ebri.org/pdf/briefspdf/0904ib1.pdf

 

[Genx87]

Here's an article about the HSA embezzlement:

http://goliath.ecnext.com/coms2/gi_0199-6429651/HSA-EMBEZZLING-CASE-A-HEADS.html

I first heard about this on NPR and the story mentioned that the third party holding the HSA money was often hidden behind one or two other corporate entities. Often times people didn't know anything about the problem until their HSA charge card was declined at the doctor's office. Hopefully it hasn't affected you two, but I'd check it out right away.

Here's a link to the (audio) NPR story. Good luck.

http://www.npr.org/templates/story/story.php?storyId=123274765

Well this is a clear case of fraud. I dont think you can hold one example of fraud against the entire HSA platform. Anybody can be scammed by fraud. My HSA's were\are in publicly traded banks.

 

[sMiLeYz]

http://www.nytimes.com/2010/03/03/health/policy/03health.html?hp

President Obama offered Tuesday to address some of their concerns by embracing proposals to encourage the use of medical savings accounts and to increase payments to doctors who treat Medicaid patients.

 

[werepossum]

Source:
http://www.commonwealthfund.org/Con...y-They-Wont-Cure-What-Ails-U-S--Health-C.aspx

The chronically ill (or those who require ongoing medication) typically are much better off on standard health insurance policies.

LOL Because someone else is paying for their medical care. EVERYONE is better off when someone else is paying for his medical care. But we can't all be covered and have someone else pay for our medical care.

I have a HSA and love it. My employer pays some, I pay some (more), and I have catastrophic insurance plus a not-for-profit insurance company (BCBS) negotiating costs for me when I can't do it myself. It costs me a lot so we don't have a big screen (or even flat screen) TV, share one cell phone, and don't have an expensive home or a lot of the amenities that my friends have. But we can't all have great health care and expect someone else to pick up the tab.

 

[cubeless]

the way the indiana thing is structured, you get to keep the $$$ that you dont' spend, so spending went down... so the folks got a bigscreen instead of a colonoscopy and will cost 10x as much to treat when he finally notices that he has colon cancer...

there have to be rules that if you don't spend the $$$ on some basic screening you don't get treatment down the road...

my hsa is structured so that i have to decide how much i put in (i can have up to $5k tax advantaged a year) at the beginning of the year, and if i don't use it i lose it... so last year we were pretty healthy as a family and didn't use nearly as much as we usually use, so i had to spend up a bunch of money getting a heart scan and stuff at the end of the year...

 

[charrison]

What type of information are you asking for? I doubt I can find you anything like a scientifically validated poll. It was my opinion based on having read lots of information about HSAs. For example, I know many mental health professionals are against HSAs because they harm treatment of the mentally ill.

I should note that I believe greater customer involvement in health care decisions is important. I just don't think HSAs are the right way to do so.

Some more reading: http://www.ebri.org/pdf/briefspdf/0904ib1.pdf

You could first post an article that is not published in 2004 based on fear when HSA rules were going though congress. Post something about how they work now with the people that have been enrolled in them for the past several year with good success.

The topic of HSA is very political so it is very easy to find the opinion you are looking for. Look for stats, not opinion.

 

[charrison]

the way the indiana thing is structured, you get to keep the $$$ that you dont' spend, so spending went down... so the folks got a bigscreen instead of a colonoscopy and will cost 10x as much to treat when he finally notices that he has colon cancer...

If you had read the article, that is not happening.

my hsa is structured so that i have to decide how much i put in (i can have up to $5k tax advantaged a year) at the beginning of the year, and if i don't use it i lose it... so last year we were pretty healthy as a family and didn't use nearly as much as we usually use, so i had to spend up a bunch of money getting a heart scan and stuff at the end of the year...

That is an FSA, not a HSA. They are quite different.

 

[werepossum]

the way the indiana thing is structured, you get to keep the $$$ that you dont' spend, so spending went down... so the folks got a bigscreen instead of a colonoscopy and will cost 10x as much to treat when he finally notices that he has colon cancer...

there have to be rules that if you don't spend the $$$ on some basic screening you don't get treatment down the road...

my hsa is structured so that i have to decide how much i put in (i can have up to $5k tax advantaged a year) at the beginning of the year, and if i don't use it i lose it... so last year we were pretty healthy as a family and didn't use nearly as much as we usually use, so i had to spend up a bunch of money getting a heart scan and stuff at the end of the year...

This is natural selection. LOL

Ours are structured so that the money is pre-tax. However anything not qualifying as health care has an extra penalty (I think 10%) and is then taxed at the regular rate for wages, so it would make no sense to buy a big screen TV with an HSA.

 

[Zebo]

Double

 

[Zebo]

HSAs have been national for at least 5-10 years, if not more. They have some income tax benefits, especially for higher income people.

I'm one of the few posters here who actually buys his own health insurance. At least once a year I spend a half day or so pricing the various options available to me. Every single time I've checked plans with a $10,000 HSA cost substantially more (10-30%) than conventional health insurance with a $10k deductible, plus you have to come up with the $10k cash up front (note to the uniformed-you need to suffer deductibles like this to get health insurance even remotely reasonably priced).

Speaking of HSA's there is a major scandal where a company holding millions of dollars of them was looted by its executives and is now in bankruptcy. Turns out regulatory oversight is nearly nonexistent and there is no FDIC type insurance for the HSA's, so those people are out thousands of dollars cash.

Conclusion-definately nowhere near a cure-all, possibly a decent alternative for some IF decent regulatory oversight put into place and something like FDIC coverage is provided.

I also buy my own insurance and find standard PPO much cheaper, and if structured right e.g. In a C-corp where all corporate officers get insurance, you can legally expense all insurance and all health care costs while providing none to employees surpassing all tax advantages of a HSA.

This of course is the huge advantage to C over S. Not only any and all health insurance costs but you can leverage a wide range of IRS approved deductions and expenses in employee (that's you) fringe benefits to include retirement plans, transportation, expense accounts, educational costs and so on reducing basis.

In general higher income people do not mess with HSA's it's the $50-150K people who work for others and young who do and that take advantage most.