Health savings accounts are ill-advised

[ColbertWatcher]

From the Los Angeles Times
Health savings accounts are ill-advised
David Lazarus
February 4, 2009

Former Senate Majority Leader Tom Daschle's decision Tuesday to withdraw as nominee for secretary of Health and Human Services was a setback for President Obama's goal of reforming the U.S. healthcare system.

What could that mean for you? Three words: health savings account.

(...)

"Most people can't even afford to put money into the account," said Jerry Flanagan, health policy director for Consumer Watchdog in Santa Monica. "All the money goes into premiums and deductibles."

Health savings accounts were introduced five years ago as an alternative to traditional employer-based health coverage. Although they were championed by former President Bush as a way for Americans to exercise more control over healthcare spending, most employers have been wary of embracing them.

(...)

"They sell you the policy on the assumption that you won't make any claims right away," she said. "But over time they know you will make claims. That's why insurers don't want you sticking around too long with lower premiums."

That's one of the fundamental flaws of health savings accounts -- the notion that affordable insurance plans will be available to meet healthcare needs.

(...)

Want to help working families and cash-strapped businesses? Extend Medicare to everyone, with employers and workers covering the tab with tax money, rather than premiums, deductibles and co-pays.

It may not be a perfect solution, but it's a lot better than most of the alternatives out there. Whoever's next in line behind Daschle should make it a priority.

(more)

--Los Angeles Times

I agree with the writer's statement that medicare must be extended to everyone, but I disagree with the writer's initial assertion that somehow only Daschle would have ended the practice of health saving accounts.

I'm hoping that no matter who is given the responsibility for fixing our healthcare system will make sure that any proposal from the insurance industry is ignored.

[liberal N proud]

1. At the end of the year you have to spend it or lose it

And you can only spend it on health care related items.

[ColbertWatcher]

3. There are so many things wrong with health savings accounts.

And the one you noted is one of the biggest.

[dflprincess]

8. You're confusing Flexible Spending Accounts (FSA) with Health Savings Accounts (HSA)

FSA have to be spent by the end of the year, HSAs roll over. That said. FSAs are kind of handy, HSAs are worthless and keep people from seeking care.

[Lydia Leftcoast]

13. People ALWAYS confuse them on these threads

:eyes:

[Cleita]

14. Same monster how ever you look at it princess.

They are gleaning health care dollars that won't be spent on health care and won't go into the health care pool where it's needed. Anything that was thought up by the Heritage Foundation or the Cato Institute is nothing more than a new way to make a profit by very rich people, who don't need the money.

http://www.heritage.org/research/healthcare/wm481.cfm

http://www.cato.org/subtopic_display_new.php?topic_id=32&ra_id=6

[dflprincess]

18. It's not really the same

FSAs are pre-tax dollars that may be used to cover co-pays, deductibles or even over the counter items like aspirin or contact lens solution. The OTC items are a handy way to use up anything left in the FSA at the end of the year. I usually wind up using mine on dental copays. FSAs are suppose to help cover smaller out of pocket expenses and are a benefit offered in additon to health insurance. I had an FSA even when my employer still offered good insuranc.

A HSA is a savings account that can accumulate for years if you don't need to dip into it and are intended to cover larger expenses, they're generally tied to high deductible insurance policies which means you will never be able to accumulate enough to cover a really expensive illness because you've had to use it for more minor expenses. (I've heard you can also invest HSA money like 401K money gets invested - good luck having enough in the account to cover an office copay in this market). HSAs are designed to keep people from seeing their doctor for frivolous reasons. Many HSA users wait to see their doctor until the situation is serious which, of course, makes it more expensive. I don't know if you're allowed to use any of your HSA money for a bankruptcy lawyer when you can't pay your medical bills.

[ColbertWatcher]

19. Nonetheless, neither are as good as Medicare for everyone. n/t

[Pavulon]

21. Can I choose sloan kettering over my local shit hospital

on medicare. I like my coverage. I dont want to take away from anyone but dont want to take a step down in quality of care.

[dflprincess]

26. For sure! (eom)

[Cleita]

7. That sounds like something that came out of the Cato Institute.

Oh my goodness! It did!

http://www.cato.org/pubs/handbook/hb108/hb108-27.pdf

[liberal N proud]

9. But many companies are implementing them

And really going after the younger employees to use them.

[Cleita]

11. They don't miss a trick, assholes. n/t

[Dawgs]

15. That is not true. You don't lose any money.

You're talking about a flexible spending account.

[liberal N proud]

22. Our company calls them HSA's

You have to spend the money at the end of the year on health care.

[Cleita]

2. The insurance industry is dying to jump on the corporate welfare queen wagon at

our expense. They cannot be allowed into the mix where taxpayer money is involved, period.

[ColbertWatcher]

5. I hadn't considered it that way, but by golly, I think you've nailed it! n/t

[Hello_Kitty]

4. HSA's are a fancy way of saying "pay for your own health care" eom

[ColbertWatcher]

6. True. Kinda like healthcare on layaway.

Buying things on layaway is fine for somethings, but not for health.

[Lydia Leftcoast]

16. That is exactly right

As a self-employed person, I looked into getting an HSA, and here's what I found:

1. The premiums are about the same as for a regular insurance policy with the same deductible

2. Basically, you're prepaying your deductible. If you're having trouble making the premiums, all you need is to put away an extra $200 that you don't have, right?

3. You can't use it with just any old high-deductible insurance policy. NOOOOO. The one I'm on now is not eligible, Lord knows why. If I were to get an HSA-eligible policy FROM THE SAME COMPANY, I would have to reapply and fill out the same damn forms again.

It's probably great as a tax shelter if you're above a certain income level, but as the answer for the average American, no way.

[SmileyRose]

10. Medicare for all NOW

I will gladly pay the premiums to the feds for basic Medicare and premiums for a supplemental to cover what medicare doesn't. OR to pay the value added premium to an HMO and sign over my medicare bennies to them.

It would keep the insurance co's in the loop (thereby negating any reason for them to lobby against it) and it would be private providers (no gubmint hack choosing my doctor thereby taking away any real opposition from "gubmint healthcare" haters) and it would still give people with the funds to do so the ability to increase their coverage.

[havocmom]

12. Year two of fighting red tape and excuses to get back money rightfully due

Medical care is high even with insurance. This system has been nothing by layers of excuses to not pay us back the money WE put aside to help with medical costs.

If we just had a dollar for every time someone in the administration end of this program said "well, we didn't get the faxed receipts you sayyou sent, so we can't send payment" we would have half the money we saved right now!

[Horse with no Name]

23. It took me 2 years to get mine straightened out

We changed FSA administrators midway through that year and they "claimed" nothing was faxed...long story short it took me 2 years to get everything straight. Luckily it finally did BUT I lost $400 in the process...but stood to lose $2k.
Good luck in your fight.

[zagging]

17. HSAs have their uses

My HSA (originally an MSA) is perfect for me right now. I'm 47, self employed, no kids, and in good health. I have a $2700 deductible with 80/20 coverage up to 100K, then %100. Over the course of the last 10 years (roughly, I can't remember) I've built up around $13,000 in my tax deferred HSA. It can be used for premiums, deductibles, any medical related expense.

They're not for everyone, but they got me out of paying ridiculous traditional premiums for coverage I didn't need.

[burythehatchet]

24. Exactly, and when you do need the healthcare, good luck.

on edit - there's a reason that corporate america loves HSA's

[zagging]

25. Good luck with what?

WHat exactly do you mean?

[pmorlan1]

27. Pay me now or really pay me later

I hate to tell you but because people like you are tricked into taking these lower benefit/high deductible plans, with the thought that you will get a different plan later when you need more coverage, means that the plans that actually have good benefits will now have fewer healthy people enrolled in them to spread the risk. Because of that, the costs for traditional plans will go through the roof and pretty soon no one will be able to afford them and the insurance companies will stop selling them. And of course once almost everyone is on an HSA (except for the people they will exclude for pre-existing conditions) they will then start raising the cost for the HSA plans. You'll end up with an HSA plan with few benefits that costs as much or more than what a traditional plan costs today. And guess what? You won't have anything else to choose from because those good plans you rejected for short term gain on an HSA plan will no longer be available. And if you get really sick your $13,000 plus savings account will disappear overnight.

In essence what the insurance companies are doing is practicing divide and conquer. They are pitting people who don't use much health care now against those that do and in the end only the insurance company will gain. They want you to believe that you are getting a good deal because you're healthy and that you shouldn't have to pay the same as those sick people. Don't let them fool you.

[zagging]

28. I'm self employed, single, no kids

Why should I pay massive premiums for healthcare insurance I'll never use? Are you telling me I should throw my hard earned bucks into a high priced pool for no reason other than to spread the risk?

Sure. You know, if you send a big check to the US treasury they'll gladly take it and spend it with no objections, and you'll be spreading the money around, lowering other poor folks obligations.

[pmorlan1]

29. Good luck to you

Good luck on never having to use insurance. I hope you're right. I also hope if you ever have kids that they won't need a good plan either.

[Pavulon]

20. Great for some things

if you have prescriptions that run year to year, glasses, contact lenses you are paying with pre tax dollars.

Orthodontics, corrective eye surgery are covered.

Just depends on your case.

[SoCalDem]

30. Most of us don't want "control" , or "access", OR "insurance".. WE WANT HEALTHCARE

When you are sick, you want to see a doctor..it's really just that simple..

We don't want to wade through a pile of paperwork, or play phone-tag with some 22 yr old paper-pusher at ACME Medical Insurance Denier Corp..

When a kid has a high fever and feels like crap, we just want him/her to be able to see a doctor THAT very day, and get the medicine that will make him/her feel all better..and we need for that to happen without having to stall the electric company from turning out the lights, because the doctor visit used up all our bill-paying money..

That's all we want or need.. just like most people in civilized societies have..

[geek_sabre]

31. I have HSA, and like it

I'm young (25), in a stable job (teacher), and my employer puts $200 in every month, as part of my benefits. They also pay the premium. Its a high-deductable account, as such regular visits to the doctor, prescriptions, ER visits, and ambulance have no copay. I would only have to dip in if I had to have some type of surgery or other non-routine emergency. If it came to that, my maximum out of pocket expense is $4000, anything above that is covered 100%.

I don't have to spend it all by the end of the year; its mine forever, and I can leave it to whoever I want in my will, like any other asset.