The purpose of an HSA is to save the money needed to cover your deductible in a high deductible plan in a pretax account. There is a limit to the amount you can contribute per year, I think its around $6000. (Its like an IRA, but you can withdraw with no tax or penalty for approved expenses). It is not, in employer sponsored plans, used to pay the insurance premium. I have a high deductible plan and I also have an HSA. I put enough in my HSA to cover the deductible for the year, and some more to cover all other IRS approved health care expenses. When I hit my deductible, if I do, the employer plan pays the rest of my care for the year. My employer happens to be self insured, so they are paying employee medical expenses out of their operating budget, and only paying Anthem a fee for managing the program. There is no way that an HSA is meant for people to cover their whole health care bill.
Oh. I have difficulty imagining many people make enough money to pay both insurance premiums
and save money in a special account. I guess it's good to have that if you can do it, but I don't believe enough people have either the option or if they have the option, have the money to make use of it.
I guess this would be another bone for some to pick. If you feel that people contributing to an HSA instead of paying insurance premiums is wrong (even though that's not how it works), how do you feel about self insured companies? My company pays for the health care for 1500 employees plus families. I believe they said its about 6000 people. So now we have 1500 families that are not paying into the national insurance pool. Issues with that too?
Self-insured companies are accepting risk. I would question the wisdom of accepting that kind of risk on the part of any except the extremely rich companies with plenty of cash on hand to meet disaster.
Let me put it this way: insurance companies themselves do not accept the risk of insurance--that's why they invented reinsurance, and pool their own risks between themselves. The commonalities between people in the pool are the dangerous points, the point where disaster can affect the entire pool. Best example is geography. You insure 10,000 people in Hawaii. That's a nice big pool, they're not all likely to come down with cancer on the same day, your risks are looking good...until the volcano blows and most of the insured are burned by lava, breath in smoke and ash, etc etc. 6,000 of your insured are in the hospital receiving treatment. The geographic commonality between all members of your pool meant they were all open to the same risk this time. You now have to pay out for too many claims at once. Insolvency, collapse. Unless you reinsured, and pooled your own pool with the pools of other companies.
But a self-insured company runs the risk themselves, and will have greater commonalities between its insured than would normally be the case. For starters, they all have the same employer. They may all work in the same location. They may all have very similar occupations. That's three commonalities between them right there, and any risk that affects one of those dimensions (say, a building blows up) will necessarily affect a wider section of your pool than would be the case otherwise. Suppose your company operates out of four locations, and one of them turns out to have asbestos in it, or fall over in an earthquake? Your company now has to pay out all the health claims, plus pay for repairs, plus deal with the lost revenue from the interruption of business...and if the damage is so great the company goes under, then who pays the medical claims?
Self-insurance is a
hell of a risk. Only the hugest companies, with many distant locations should even consider it, in my opinion. But then I'm risk-averse by nature, and don't believe in gambling when the stakes are that high.
