Comments on: How Health Savings Accounts Can Reform Health Care Better Than a Goverment Bill — Without Creating Any New Laws

By: Matt

Matt — Wed, 11 Nov 2009 05:30:26 +0000

Rob,

Great points, and thanks for contributing!

Matt

By: Rob

Rob — Wed, 11 Nov 2009 04:30:34 +0000

“It ruins everything because people don’t want to have to pay for medical expenses with their own money.”

Great article, but this quote is what is fundamentally wrong with health care today. There is no consumer incentive to shop for a better price because they are price insulated. In almost every market, even health care, where price is a factor or consumers, prices tend to go down and quality goes up. just look at Lasik and plastic surgery, both health care markets where their is little to no insurance coverage. What has happened when there is no insurance? Are costs out of control? No, just the opposite, costs have come down and quality has gone up. Why? because the providers and manufacturers must COMPETE in a consumer driven market (same as HDTVs, DVDs or any other commodity).
The HSA solution which provides catastrophic coverage and market incentives is the correct one, but HSAs participants need to have some “skin in the game” so they are just not playing with monopoly money IMHO.

Thanks for the great post. First time contributor, long time lurker.

By: Matt

Matt — Tue, 10 Nov 2009 01:43:32 +0000

Penny: Good question. We have to keep all receipts for HSA expenses so that we can demonstrate the money was spent on qualifying medical expenses.

By: Penny

Penny — Thu, 05 Nov 2009 21:32:46 +0000

Very interesting. I, too, had the same question about the negotiated rate, and that was answered. Having worked in the trenches with society’s “darker” side, I’ve seen abuse of well-meaning programs. Is there a way to ensure that the money in the HSA actually goes to legitimate health care?

By: Matt

Matt — Thu, 05 Nov 2009 08:15:32 +0000

Thanks for all the great comments. Ian: Because of the high deductible plan, you should still get the negotiated rates. Even though the first $4k is paid from the HSA, because the expenses are counting toward your deductible you get the rates that the insurer has negotiated.

By: janejo

janejo — Wed, 04 Nov 2009 18:00:56 +0000

I just needed to pick individual insurance because my company changed it’s offering to a very unacceptable plan as of Nov 1. I spoke with an insurance agent after doing some research on-line to understand terminology. My self study left me confused and the agent sorted it out painlessly. I then talked with my tax CPA and clarified the tax benefits of a Health Savings Account. Those two, commonly used advisors helped me make sense of the insurance and tax aspects of self purchased health insurance given my income level. I did choose a high deductible, with a 100% coverage after deductible is paid, (not 80/20) and a HSA that I’m going to open and start funding today! Great article. It’s nice to see that your research results match mine. Let’s blitz Pelosi and congress with this article and a note to knock off their ‘stupid attack’ they call reform. Jane

By: Matthew Lee Anderson

Matthew Lee Anderson — Wed, 04 Nov 2009 03:54:47 +0000

Matt,

I’ll echo the previous comments: a fantastic job here.

While I’m a huge fan of HSA’s and I think they have been underutilized and over-restricted. I’d like to see the limits on contributions increased and some of the tax advantages increased as well. For instance, if the parents pass away, it becomes a part of the estate and ceases to be an HSA and so becomes taxable income to the heirs. Removing that would incentivize parents not only to pay for their own health care, but to take care of their children’s as well. But that’s where we still approach paying for health care in individually oriented, ‘rights’ laden terms, which narrowly constricts our imagination.

Also, I think this line is really telling: “It ruins everything because people don’t want to have pay for medical expenses with their own money.” While a fan of HSA’s, I was persuaded by a recent article in the Atlantic that until this mentality ends, health care costs will continue to rise. That article (beware: 10,000 words) is here: http://www.theatlantic.com/doc/200909/health-care

Great stuff. I hope you’re well!

Matt

By: Ian

Ian — Tue, 03 Nov 2009 18:25:03 +0000

I serve as pastor of a small church. I am married and have 4 kids. I would love to go to a HSA and a catostrophic insurance policy. I think it could save the us quite a bit of money. How do we deal with the issue of negotiated rates for services. From what I understand hospitals and doctors charge self pay people a lot more than the rates that the insurance companies have negotiated. Maybe this has been exaggerated. Thanks.

By: Judd Rumley

Judd Rumley — Tue, 03 Nov 2009 17:58:18 +0000

Matt,

Thanks for this. Here is what my agent said:

Great article! I am a big fan of HSAs, having followed them since they were just a twinkle in a legislator’s eye, all the way back when they used to be called MSAs.

I would add another reason to the author’s as to why they haven’t caught on. Most agents don’t like them because they are less expensive than the loaded plans. I’ve had agents tell me to my face that they won’t sell them, won’t educate their customers on them, because the lower premium cuts their commission! So insurance agents bear part of the blame as well.

Thanks for sending this,

By: Glenn

Glenn — Tue, 03 Nov 2009 15:06:40 +0000

Matt, terrific article, thanks for carefully writing these thoughts out. I firmly appreciate your suggestions to work from the easier to the harder as we think about reforming health insurance options.

With respect to Chris’ comment, yes, thinking carefully does require some effort. A hypothesis that fits the data is this: those in power in the federal and state governments and in government agencies do not want you to think clearly or carefully about this. They benefit enormously from weak-minded citizens.

I also believe Christians should emphasize the role of family and community and churches in helping those who cannot pay for their health care at some point. (See Gal 6:9-10) One hugely complicating factor in the health care debates today is that we’ve abandoned individual responsibility and assumed no one is accountable to or helped by family and community.

Thanks again, Matt!

By: Chris Dattio

Chris Dattio — Tue, 03 Nov 2009 13:39:36 +0000

Matt, Great article! The problem is, is what you wrote is so complicated most won’t understand it. This is what happened to John McCain’s plan, no one understood it. How do you have a plan like yours but make it easy for people to get behind?

Case in point, my husband and I recently spent 3 hours on a Sat. looking at our healthcare options. His company only pays $500 into a HSA and our account can be $5000. We had to figure after-tax savings, guess our healthcare needs for the year, cost of HDHP plan vs. traditional, loss of Flex-plan benefits for everything but vision and dental and the fact that we would have to pay hundreds of dollars for prescriptions each month not covered under preventative-fomulary schedule before our HSA would start reimbursement.

It took two calculators, 2 spreadsheets, visiting and reading 4 websites with necessary details, comparing pre-fomulary with regular formulary,old-tax forms, W-2′s, tons of paper and a lot of hair-pulling.

In the end we choose HSA w/ HDHP with Flexible Spending Acct of $1000. I don’t think most people would take this type of effort to figure it out.

Thanks for your efforts. Wish I’d read your post first!!