HSAs are not health insurance they are supplements to health insurance. The way they would work is that you get a certain amount per year to save tax free in the account. You would be able to roll the funds over each year you did not use them. You would then buy a high deductible health insurance plan. This health plan would cover any emergencies or sudden changes in health. This would make health insurance more like other forms of insurance like car or home insurance. Since they would not pay out for most people each year, the insurance would be much cheaper than current types of health insurance which for most people are not actually insurance but rather a way to prepay health care expenses.
Low deductible health insurance would not be banned but would probably be much less popular because their cost would be so relatively high.
Because people would be spending their own money out of their HSA their would be more shopping around for healthcare spending and subsequently the entire system would end up costing less.
This system would resemble the health insurance laws of Singapore, which is generally acknowledged to have the best health system in the world when you take into consideration outcomes and expenses.
Of course part of the problem is there’s no way for a healthy person to determine when she has to make her insurance decisions whether she’ll end up in the unfortunate 5% later in the year.
I got kidney stones in both kidneys a few years back. Had 2 outpatient surgeries and one inpatient one. Total costs were upwards of $50,000. Luckily, I had insurance. My high-deductible plan covered most of the costs, but I still spent enough that I was able to deduct health care expense on my taxes.
A good friend developed ovarian cancer. I’m pleased to say she’s doing well some 4 years after diagnosis, but her chemotherapy ran $20,000 per treatment – and she had 7 treatments. Again, luckily she was insured.
There are a bazillion health problems that cost big bucks to treat and are totally not predictable.
My Beloved has gone through breast cancer and I survived an aneurysm that brought me so close to Death I could tell you what perfume she uses(Chanel No. Infinity). Try to imagine how much I would have to pour into a “tax-free health savings account” to pay for just those two items and the necessary follow-ups, never mind all the other routine medical needs.
Sooner or later, we will wise up, and go to single payer, like every sensible nation on the planet. Until then, we have at least opened the door, stuck our shoe in, and offered the Republicans a thousand opportunities to slam the door on our toes.
And because of their stubborn stupidity, many of our people will suffer, and some will die. And so it goes.
There is no way that HSAs can work to substitute for a health care system. It’s an idiotic idea, has been since it was floated by George W. Bush. Trump’s ever-changing position on his “health care plan” lifts most of its notions from Bush’s. It was stupid then, and it’s stupid now.
Studies have shown that when people have to worry about whether or not they can afford health care, including preventive care, they simply postpone going to the doctor until the medical condition has reached ‘critical.’ This is the reason that preventive care under the ACA is zero cost. It’s a lot cheaper to have a mole removed than to treat Stage 4 melanoma.
The main problem with Trump’s (Bush’s) HSA proposal is that it does nothing to address the underlying problem with health care: Rising costs. Ambrosio Spinola makes the very good point about the 5% users of health care. What s/he didn’t say was, sooner or later we are all likely to be part of that 5%.
Health care does not lend itself well to a purely capitalistic model because it is inelastic. You don’t get to shop around for the cheapest option on the way to the hospital for treatment of your stroke. For this reason, pure capitalism is never going to act as a cost inhibitor for health care. Not every problem is solved by competition, a fact that appears to be completely lost on those who support the HSA model.
Moreover, a lot of people will slip through the cracks. I’ll use my own situation from a few years ago as an example. Before my husband died, our household income was two-thirds again more than mine is now on my own. We had always planned for a situation where one or the other of us might find ourselves alone to bear the costs of our lifestyle, but it would have gone far easier for him if I had died than it did for me when he did. He just earned a lot more than I do.
While he was alive, we used to have extra money withheld from his wages to offset my tax liability as a sole proprietor. When he died, obviously that went away. So not only did my income fall by two-thirds, but I was suddenly faced with a much larger tax burden at the end of every year. I really struggled for awhile to make ends meet, while I built up my business to accommodate my new situation.
There was just no way I had extra money to contribute to an HSA. Good thing I didn’t get sick.
HSAs are just a means of shifting a portion of the costs for health care from employers to individuals. Many, many people are far too up against it to contribute significant amounts to their HSAs – assuming they even have them.
Until we tackle cost control, Trump’s proposal changes nothing meaningful.
You should not wish for serious policy discussion coming from Trump. I don’t think even he knows how a repeal would work. Actually, I don’t think he knows how the health care system works at all, he’s born into money and likely never has to worry about a doctor’s visit. “Repeal” sounds good to his supporters, so he repeats it like a mantra
Speaking of “shopping around for the best price” wrt our (American) current HC system, has anyone attempted to get an estimate before a procedure or surgery? Go on. Next time your doctor orders something, ask how much it will cost. The doc won’t have any idea. Go to each provider: bloodwork, MRI, mammogram, whathaveyou, and ask: What is the cost for this? Nobody can tell you.
This is because the insurance company pays the price. Do you think they know the price of each procedure?
Everyone who has to pay knows the price and since most americans only pay the deductible, that is the price they know.
Yeah, they don’t give estimates. I was in the hospital 5 days last February. I am still getting bills from doctors I never saw.
My wife is having her second total hip replacement next month. Her first was in January. I wonder how long it would take to save up for that in a tax free health saving account. Were it not for my insurance through my employer, I would be putting a gun in my mouth.
Medical care costs too much. A lot of people go broke, even *with *insurance.
Another point about HSA’s – they don’t necessarily keep you from having to pay out significant money for health care, in addition to the amount you are paying for your insurance premiums.
The average employee cost for family coverage in 2015 was $4,710. This is in pretax dollars (I’m pretty sure) so your taxes do go down somewhat. This is for overall health insurance – I didn’t have time to find what high-deductible plans cost. But let’s assume (based on no data) it’s 50% of this – $2,355.
The maximum contribution to an HSA for 2017 for family coverage is $6,750. In 2014 employers paid an average of $890 of this – let’s assume that number still holds true.
OK, another assumption – you are in the 25% tax bracket. Your costs are then $1,766 for premiums and $4,328 for the HSA, for a total of $6,094. None of this applies to the health cost deduction on your taxes.
Your HDHP has a maximum out-of-pocket amount of $13,100 (see first link above). Suppose you have no carryover from previous years’ HSA contributions (which would be the case if it’s the first year you’re on the plan). If you are unfortunate enough that someone in your family needs a lot of health care and you reach the maximum out-of-pocket, and you devote every penny of your HSA to health costs, you will still owe $6,350 for these costs. If you are in the 25% tax bracket, this is probably not enough to qualify for a deduction on your taxes.
So your total costs for the year:
$1,766 – health insurance premiums
$4,328 – HSA contribution
$6,350 – out-of-pocket health expenses
Total amount $12,444.
There are a lot of families that really can’t afford this amount.
(OK, I’m counting on Dopers to let me know if I got any of this wrong.)
QFT.
But you said,
So, you’re acknowledging that there’s no possible way to get cost estimates and shop around with an HSA?
Note: I’m under the understanding that the ACA was also supposed to provide negotiation leverage to reduce pricing. Does anyone know, was that bit carved out of the bill to get it passed, or did the negotiations fail, or have HC costs actually dropped since the inception of ACA?
The insurance company doesn’t know the price beforehand either. They get the bill afterwards, decide what they’ll pay, and stick you with the rest.
I don’t work in the insurance industry, but I don’t think this is true, or at least not true all the time.
I believe insurance companies have negotiated rates with providers. Your local hospital may say a procedure costs $3000, but your insurance company may have negotiated a rate of $1000 for that procedure. You would pay the full $1000 if you haven’t met your deductible, your copay/coinsurance if the deductible has been met but not the max out-of-pocket, and nothing if you’ve hit the max out-of-pocket. In any case the insurance company knows before you have the procedure that it will cost $1000.
If I want to have the best price for lab testing, I have to go to Quest Diagnostics, which my insurance company has some special deal with. Someone told me Cigna pays a certain amount to Quest every year to get the special pricing, but I don’t know if that’s true. I do know that I had some blood and urine testing done last year that came to something like $500, but the negotiated rate was about $80.
$1,500 might cover about 2 months worth of my spouse’s daily medications.
Because he was born with health problems there is no way in hell he could have ever saved enough money to pay for what he needed before he needed it, and after he needed it all his money would have been eaten up by necessary-to-stay-alive costs and he still couldn’t put anything into a “health savings account”.
This is batshit crazy, and it makes sense to Trump because he can’t comprehend not having money to pay for your own health care. Or maybe he just stiffs his doctor or pays him in reefer. What the Trump plan does is make the only assistance that you would get for your health care would be in the form of not paying taxes on it. So you pay say $3000 in health care expenses- depending on your tax bracket it might be worth say $500-$1000 in a tax break. You still need to come up with the $3000 in the first place. Now let’s say you need an operation that costs $50,000. Who has the kind of cash available? Not most people, and if you vote for Trump then behold your death- not being able to afford to get the health care you need.
Right - because when you are literally having a heart attack you have so much frickkin’ time to go comparison shopping! :rolleyes:
When I entirely without health insurance and I was, indeed, the one paying the bills I still could not get a straight answer on price. Even when I negotiated a lower price for paying up front in cash I’d get bills claiming the original price, run-arounds and told there was no discount even when I had it in writing, bills for services and doctors and all sorts of things tacked on without informing me ahead of time even when I specifically requested to know all costs ahead of time, and so forth.
No, in actual fact no one knows what a medical procedure costs before it actually occurs, and often not for some time afterward. It’s a fucked up mess.
Also, EVERY insurance company seems to negotiate it’s own price for everything, then will try to disallow and argue down the price further. Again, it’s a fucked up mess.
That has been my experience as well. I have some really competent doctors and they have freely admitted that they didn’t know the price of just about anything because it varies by patient and plan even within the same insurance company. The front office staff can sometimes figure it out if I ask them to call my insurance company but that usually takes time and it wouldn’t work if everyone did that because it is resource intensive.
You certainly can’t just call up different doctors’ offices or hospitals to ask about prices if you aren’t already a patient. They need lots of info and probably an exam and tests before they can even start that process.
I have a high deductible plan so cost is important to me because it is literally coming out of my own pocket unless I meet the multi-thousand dollar threshold in a given year and that doesn’t generally happen. Doctors’ offices used to be surprised to a high deductible plan at first but they are much more common after the ACA. The only thing my insurance company does for me is negotiate rates which is another thing that shouldn’t be needed. You would think that most doctors and hospitals would be happier with patients like me that paid cash on the spot but that isn’t true. The “rack rates” (non-negotiated rates) are fictional and greatly inflated but that is generally the first number you will be quoted if you simply say that you want to pay it yourself right then. The whole thing is dumb and the exact opposite of how every other business model works.
People can defend the ACA (ObamaCare) all they want but the real-world effect for millions of people like me is to disable routine health insurance almost completely, force us into very high deductible plans that have little practical use except for catastrophic emergencies or chronic diseases and force us to pay hundreds of dollars a month extra for the privilege while we simultaneously have to save for the health care that we actually use because insurance isn’t going to pay for that. That is just a massive wealth redistribution scheme on several different levels.
I am glad that millions of people that didn’t have health insurance before have it now but where do you think that money is coming from? Take one look at a paystub for someone like me and it is instantly obvious. Here is the thousand dollars or so a month that you and your employer are paying just for you but forget about that. That isn’t really for you. It for the really broke people somewhere else. Most of their stuff will be covered. You have to save up for your own healthcare expenses and pay for them with a debit card created especially for that purpose. Don’t worry though, you won’t be quadruple charged because you don’t have to pay federal income tax on some of your savings. I take that back, your annual deductible is $5000 and the limit for an HSA is $3000 for a single so you you will just have to take it out of your checking account if you go over the $3000. Sounds look a good and fair plan doesn’t it?