Obamacare 5 years later. Crow, anyone?

[Emily's Cat]

Interesting. I think those are high enough to offer an HSA. Can you start your own if you are in one of those plans? I've never had a high deductible plan that didn't have an HSA attached, but I always read the tax forms, and it doesn't seem like they are inherently linked.


At any rate, high deductibles aren't necessarily bad. Low premiums and high deductibles is a good combination for a lot of people. To hear Republicans talk about the horrors of having high deductibles is really weird. Even without the HSA portion, those are pretty Republican plans.

ETA: Looked up IRS regs. If your deductible is as high as the congresscritters were whining about, you are eligible to start your own HSA. It doesn't have to be affiliated with an employer. And if you can possibly afford it, you should. So, it seems that the republicans are, indeed, whining about a scheme they created.

No, it doesn't have to be affiliated with an employer, and it does have to have a minimum deductible level, and a maximum OOP. But not ALL high-deductible plans qualify. There are requirements around other parts of the plan design as well, including what is classed as preventive drugs, how much of the plan has copays, and a few other bits that I can't remember. It has to have an intergrated drug benefit -> prescription drugs have to share the same deductible and out of pocket max as other medical services.

Unless the insurance carrier is unimaginably dumb, any plans that meets the federal requirements for an HSA-Qualified plan will sell ti as such. If it's not listed as an HSA-Qualified plan, you can't start an HSA fund for it.

*Well, technically, you can start the fund... but at some point the IRS is going to want a cut of those monies for taxes.

 

[Biscuit]

How were these figures calculated? What is the basis? Why didn't you pay $1. each or why didn't you pay more?

I have no clue! When I wrote that post I had another window open and logged into my insurance website. Each of the bills was submitted to my insurance multiple times for different amounts, I used the final approved payment for each for my post. How they calculated my portion is beyond me.

All I know is $1,080 is a great deal.

ETA: With the surgeon it was odd. I paid them $100 before the surgery and they said that's all I owed. After the surgery they sent me back a check for $100.00 with no explanation. A week later I got a bill from them for $77.00 which I paid.

 

[Skeptic Ginger]

All an HSA does is allow you to benefit from income tax free health care spending. Why this is touted as an alternative to insurance is beyond me.

 

[Emily's Cat]

All an HSA does is allow you to benefit from income tax free health care spending. Why this is touted as an alternative to insurance is beyond me.

Tehcnically, it's not an alternative to insurance, it's just a savings benefit in addition to insurance.

The theory is that if consumers have "skin in the game" for a larger portion of their health care, they'll act more like consumers in other sectors do. They'll shop around for a better price, they'll make more informed decisions about what care they actually need, they'll ask more questions about whether that MRI is really necessary or if a simple Xray would do.

So the theory is that you give people a really high deductible... but you also let them have a tax-advantaged savings account to take the sting out of that scary deductible. And then they save money there, so they're better covered in the future.

I have some problems with this approach - a lot of people who choose HSA plans can't afford to pay the deductible... and they can't really afford to put money into savings for their deductible either. They buy it because the price tag is low... but then they're exposed to a bankrupting level of bills if something does go wrong.

It's a great option for employers who are willing to contribute to the HSA fund. It's not always a great option for individual consumers.

 

[Dread Pirate Roberts]

Interesting. I think those are high enough to offer an HSA. Can you start your own if you are in one of those plans? I've never had a high deductible plan that didn't have an HSA attached, but I always read the tax forms, and it doesn't seem like they are inherently linked.


At any rate, high deductibles aren't necessarily bad. Low premiums and high deductibles is a good combination for a lot of people. To hear Republicans talk about the horrors of having high deductibles is really weird. Even without the HSA portion, those are pretty Republican plans.

ETA: Looked up IRS regs. If your deductible is as high as the congresscritters were whining about, you are eligible to start your own HSA. It doesn't have to be affiliated with an employer. And if you can possibly afford it, you should. So, it seems that the republicans are, indeed, whining about a scheme they created.

I did forget to mention that our company also offers Flexible Spending Accounts. You have to use it or lose it unlike an HSA, but you can spend the entire amount you're contributing at the first of the year, rather than your accrued balance as in an HSA, amongst other differences.

 

[Kestrel]

Well, yes, some of the people who selected a Bronze plan qualified for a Silver with a Cost-Share reduction (CSR). I'm not sure why you say "fear" and "sold" though. It's not like the Bronze has been "pushed" or anything.

I believe it's really more an effect of the subsidy being a "bucket of money" than anything else. Sure, you might qualify for a $150 deductible and $10 Office visits on a CSR Silver Plan... But if you're healthy enough, that might not really matter much. Let's say the Silver plan costs $400 per month, and the Bronze costs $275. If your subsidy is $300, then you end up with a choice:

• Pay $100 per month for a Silver plan, and get lower cost sharing or...
• Pay $0 per month for a Bronze plan, with higher cost sharing

If you believe that you're unlikely to use the services, then the Bronze is a better deal. The lower cost sharing only has value if you expect to use those services.

Someone earning $17k a year is unlikely to have either the savings or credit to handle a $5,000 deductible. (A Silver plan for a 30 year old with this income is about $50 a month, a Bronze plan is free). If they choose the Bronze plan and have a medical problem, they are likely to delay needed treatments. If they get treatment they end up being chased by bill collectors for years to come.

Taking the Bronze plan only makes sense if you can pay the deductible and handle the copays.

 

[Meadmaker]

It has to have an intergrated drug benefit -> prescription drugs have to share the same deductible and out of pocket max as other medical services.

Our insurance system is just plain dumb.

 

[Giordano]

I think in common with most people here (Emily exempted) I have very little clue as to exactly why some amounts are considered by my insurance company as covered, whereas others are my responsibility. Usually, if it looks reasonable, I just believe the written statements. If the statement sounds really, really strange, then I call my insurance company and/or doctor and usually play a long game of telephone tag to try to obtain answers to my questions. This problem, of course, precedes Obamacare.

I have had insurance companies just send me a first-class letter telling me that an entire procedure was not covered and I would have to pay for it myself. I have then called the company and when I finally reached someone in authority they have simply stated that the letter was sent in error and I was correct. I strongly suspect that this is an intentional strategy : if only 1 in 4 customers believe the letter, then a lot of money is saved by the insurance company for the cost of some first class stamps.

Oddly, when I did have a truly huge medical bill, the company paid virtually all of it without a qualm and spared me a giant-out of-pocket cost (for which I am eternally grateful to medical insurance). It was the much smaller sums that they typically tried to avoid paying, even though expressly part of my written coverage.

 

[Kestrel]

All an HSA does is allow you to benefit from income tax free health care spending. Why this is touted as an alternative to insurance is beyond me.

To use an HSA requires having money to stash into the HSA account. Since money put into an HSA is deducted from income, the savings are directly related to your marginal tax rate. At the bottom end an HSA provides a 10% savings. At top income levels the savings is 39.6%.

HSAs are designed to give the most help to those that need it the least.

 

[Giordano]

Someone earning $17k a year is unlikely to have either the savings or credit to handle a $5,000 deductible. (A Silver plan for a 30 year old with this income is about $50 a month, a Bronze plan is free). If they choose the Bronze plan and have a medical problem, they are likely to delay needed treatments. If they get treatment they end up being chased by bill collectors for years to come.

Taking the Bronze plan only makes sense if you can pay the deductible and handle the copays.

Basically, being poor sucks. Medical treatment for the poor costs somebody. Recently, these costs were hidden by hospitals indirectly charging their non-recoverable billing to other individuals or their insurance companies. And typically it was focused around an Emergency Room type of delivery.

The current system is a little more direct and in theory encourages a more efficient use of medical services (although in practice?). And anyway you look at it, owing $5000 certainly beats owing $50,000. At least the Silver plans (at $50 a month) begin to be accessible to some "working poor", even if it can be a struggle.

 

[Meadmaker]

To use an HSA requires having money to stash into the HSA account. Since money put into an HSA is deducted from income, the savings are directly related to your marginal tax rate. At the bottom end an HSA provides a 10% savings. At top income levels the savings is 39.6%.

HSAs are designed to give the most help to those that need it the least.

In the plans that were offered by our company, the HSA plans didn't really do that. When they first came out with the HSA plan, it was really clear that the company was steering people toward that plan. Naturally, we kind of assumed it wasn't really good insurance and they wanted us to take it to save them money. However, being engineers, we still prepared our spreadsheets with entries for number of office visits, and amount of hospital bills, and lab work and yada, yada, yada, all to determine which of the three plans offered would result in the least amount of money out of pocket.

In every single scenario we tried, the HSA plan was the cheapest, even without factoring in tax savings. If you didn't go to the doctor, it was far, far better. If you had a big catastrophic accident, it was a little cheaper. If you had a chronic condition like diabetes and had frequent labwork and office visits, it was a little cheaper. In no case could we find a scenario where the HSA plan cost more.

And we double checked and triple checked our figures, because it was clear that the company was putting the HSA plan in the best possible light. Why would they do that, if it cost them the most? (Our company, like a lot of big companies, was self insured. i.e. all costs came directly from company funds. The health insurance company was just an administrator.)

It was because of what was mentioned previously. When it's your own money you are spending, you are more thrifty with it. After the HSA plan, I was a lot more likely to ask "How much will that cost?" when the doctor ordered a test.

And Republicans love those plans, which is why it's funny to hear them complain about high deductibles. Well, yeah. You wrote the law that way.

 

[KDLarsen]

I still don't really understand how anyone had standing to sue in this case. Who was harmed by the Federal Governent subsidizing healthcare?

The 4 plaintiffs argued that with the subsidy, the cost of health insurance was low enough that they'd have to obtain healthcare or pay a penalty, but without subsidies it would above the treshold of 8% of income that would exempt them from having to obtain it.

And as the WSJ and Mother Jones discovered, only one of them actually had standing in the first place - and he appears to have brought it on himself by not actually shopping around for plans: http://www.motherjones.com/politics/2015/02/king-burwell-supreme-court-obamacare

 

[Nihilianth]

The actual legal question is above my pay grade.

The 4 plaintiffs argued that with the subsidy, the cost of health insurance was low enough that they'd have to obtain healthcare or pay a penalty, but without subsidies it would above the treshold of 8% of income that would exempt them from having to obtain it.

And as the WSJ and Mother Jones discovered, only one of them actually had standing in the first place - and he appears to have brought it on himself by not actually shopping around for plans: http://www.motherjones.com/politics/2015/02/king-burwell-supreme-court-obamacare

"Not shopping around for plans," isnt that almost always the case when someone makes the dubious claim that they cannot afford insurance?

 

[thaiboxerken]

"Not shopping around for plans," isnt that almost always the case when someone makes the dubious claim that they cannot afford insurance?

And they don't try because they heard it was too expensive.

 

[Emily's Cat]

Someone earning $17k a year is unlikely to have either the savings or credit to handle a $5,000 deductible. (A Silver plan for a 30 year old with this income is about $50 a month, a Bronze plan is free). If they choose the Bronze plan and have a medical problem, they are likely to delay needed treatments. If they get treatment they end up being chased by bill collectors for years to come.

Taking the Bronze plan only makes sense if you can pay the deductible and handle the copays.

OR if you're healthy and don't expect to every use services, except perhaps for preventive visits which are covered in full.

It's the choice between paying $100 for something you'll never use, and paying $0 for something you'll never use. If you're not going to use it, it's a no-brainer.

Now - those of us who have had some sort of medical situation beyond regular check-ups are probably a bit more risk averse We're more aware that something large *might* happen, even if we don't expect it. But risk aversion of that sort is learned. It develops from either personal or vicarious experience.

I have no expectation that a 25 year old who is active and fit, and who hangs out with active and fit people, would have enough risk aversion to weigh the options in the way you and I might. For them the {subconscious} value proposition isn't there. They've got a 0.005% chance of needing a costly service, and a 99.995% chance of needing nothing at all. Even if they don't actually do the math, the trade-off ends up being weighted (and influenced by risk tolerance). They're simply more willing to take the chance than you or I might be.

 

[Emily's Cat]

Our insurance system is just plain dumb.

Why do you think Rx being an essential benefit is dumb?

 

[Emily's Cat]

To use an HSA requires having money to stash into the HSA account. Since money put into an HSA is deducted from income, the savings are directly related to your marginal tax rate. At the bottom end an HSA provides a 10% savings. At top income levels the savings is 39.6%.

HSAs are designed to give the most help to those that need it the least.

Hmm. I'm not really sure I agree with that conclusion. I don't think they're designed to help those who need it least. I think they're designed to encourage people who don't need it now to save up so that they are in a better position when they need it later. It really is intended to be a "401-K for health expenses".

 

[Skeptic Ginger]

OR if you're healthy and don't expect to every use services, except perhaps for preventive visits which are covered in full.

It's the choice between paying $100 for something you'll never use, and paying $0 for something you'll never use. If you're not going to use it, it's a no-brainer....

Which amounts to gambling with other people's money.

If a person has enough wealth they can cover their expenses should they have an unexpected medical event, then they should have a self-insured option.

But if not, sorry, they have no right to gamble while passing the risk on to those who the potential bad debt is shifted to, the paying medical customers.

 

[Emily's Cat]

Which amounts to gambling with other people's money.

If a person has enough wealth they can cover their expenses should they have an unexpected medical event, then they should have a self-insured option.

But if not, sorry, they have no right to gamble while passing the risk on to those who the potential bad debt is shifted to, the paying medical customers.

I'm not sure how you see it as them passing the cost on to other people. They're not going without coverage, they're just choosing the leanest benefit offered.

Are you suggesting that nobody should be allowed to purchase a Bronze plan?

 

[Meadmaker]

Why do you think Rx being an essential benefit is dumb?

I think the regulations that say you can have an HSA plan, but only if your plan meets certain definitions, none of which make much sense as a connection to an HSA, is dumb.

So you have a very high deductible on a plan that doesn't provide coverage, you can't get a tax break on that deductible via an HSA. However, if your plan had exactly the same deductible, but covered prescription drugs, then you can get a tax break.

That's just dumb.

And then there's the fact that for most people, the realistic option for their health plan is to use whichever provided gave their employer a good deal is even dumber. Why the heck do I have to change health plans when I change jobs? It's crazy. That's the one thing I really dislike about Obamacare. It strengthened the connection between employers and health insurance. I think that connection needs to be severed completely.