At 8:45 I will post the message board on the main page. It will appear just like a regular post. It will work just like a chat room. You will enter a name to your comment and will also be able to post anonymously.
My hope is that we can watch the speech "together" and chat about what is said. It is a bit of an experiment.
I will probably attend the Keeler Report live blogging session instead. Sorry, but I have allegiances. Still, good luck in your trial message board tonight
Thank you for those who attended the message board.
I thought it was an average speech. It was well delivered, but light on content. Big news was talking directly to the people of Iran and energy reform. Not that big a deal.
I like what Kaine had to say. I think they stole "there's a better way" from the movie The Candidate with Robert Redford. Great movie by the way.
Here is a sample of what was discussed during our live chat:
dorner: importing drugs from canada = bad times dorner: some newbie in any event bob turkley: this guy is terrible but it is a tough speech to give bob t zazzon: is "there's a better way" vague and wishy washy? kutuchief: I'm really proud of this Democratic response. kutuchief: I like the "there's a better way" theme. kutuchief: Kaine needs to learn how to tie a tie. The knot is way too small. zazzon: peace in the middle west (b/c that's where were from) kutuchief: Good idea zazz. Hopefully we can bring this back for future big events. kutuchief: I guess the big news is that Bush "spoke to the Iranian people." zazzon: kut, you should do somthing like this in an "around the horn" format. bring up an issue and hear responses from diff people. kutuchief: I thought it was a pretty average speech. Not much in there. aaron: I thought we were moving in the wrong direction of eliminating the deficit. kutuchief: That is so dumb that congressmen are getting the President's autograph zazzon: kut, remember those words "vague" and "wishy washy" the next time a dem is speaking. those words define the left kutuchief: I was kidding by suggesting Mayor Ray "Chocolate" Nagin of New Orleans bob turkley: gov from VA bad choice and i am a moderate bob t kutuchief: Zazzon, you are probably right on the dem response. dorner: some newbie in any event kutuchief: Nagin?
Kyle, sorry, but I couldn't watch. Meaning, I chose to not put myself thru the stress of listening to the guy talk. Tonight I am going to read the text. But i was MIA last night, because I just couldn't torture myself.
When I knew he was going mention those "private health savings accounts" I lost it. Those are actually a WORSE idea then his Social Security reform.
Bush gave the speach that everyone expected, nothing really new. I was not impressed with Kaine, white watching I just kept feeling something was not right. Maybe it was his weird eye brow in the begninning, Did anyone else see that? I really do not care who gives the response, but the "we can do better" has got to go. Saying that implies the other side is doing o.k. but we can do better then o.k....in my mind. The Governor was standing in front of a fireplace in a mansion and is supposed to be talking to all Americans? I can't stand Bush, you all know that, but last night I don't know...if I'm a middle class American with no political affiliation I would not be voting Democrat...so the next thought is I don't want to die and want to protect my family so I will vote for Bush/Republicans. The response may appeal to the people sick of the Dems attacking the President every minute, maybe that's where they were going with it. I dont know, my thinking is the Dems need to just let Bush sink and start talking about their ideas and plans.
Seriously Chuck, rather than an insurance company getting rich off of my premiums and companymatch evry monht, I instead set aside money to pay for my own potential health care costs and only carry catastrophic insurance ofr if something happens that cost a lot of money. maybe we are talking about different hings, but that's pretty much how HSAs work. You just make a pre-tax payment into said account. It is almost exactly like putting money into a Roth IRA, except the money is for healthcare costs instead of retirement. This isn't a way of avoiding paying into medicare or social security so I don't really understand your complaint. I think it's pretty reasonable to give people a choice between having to pay for company sponsored healthcare or no insurance at all.
This explaination of the HSAs works nicely if you're a healthy young single person. What about the family of 5? Kids' health problems are expensive, and they happen all the time. Even basic check-ups are expensive. And what constitutes catastrophic - $500? $1,000? or is it $20,000? Personally, I'm ok with paying $150 a month for my spouse and myself, knowing that it will pay for everything - routine visits and catastrophic events. A better system would be for the government to ease the burden. The amount we pay for health insurance could easily help everyone in America if it were routed to a single provider rather than for-profit companies. Similar to Canada and Europe. We would also see our income taxes lowered because Medicaid would be eliminated.
Sorry for the numerous typos before. I never said HSAs were good for everyone. It is perfect for me (I believe it is over $1000/2000 depending on the incident in my personal case). I don't see a need for the company I work fro or myself to pay for something I don't really need. I view this in the same light as if I were to store two months supply of wheat under my bed every month and then throw it away on the 30th/31st. For people with spouses/kids/health concerns then co. provided insurance is very nice. Personally I like having the choice. One day I will probably switch to 'standard' insurance when I have other people to take into account, but for right now I feel like this is the best use of my income. I work hard, I eat (relatively) right, and I exercise. I don't feel that at this point in my life there is any advantage fo me to pay more money so that the overweight gentleman down the hall from me making twice as much money can stuff his face with cream sticks and milkshakes all day knowing that the financial burden o his poor health will be carried by everyone else.
You have to be pretty naive to belive that switching to a singularly run insurance provider would siginificantly lower income taxes because there would be no need for medicare. One of the major problms with our current system, and people seem to continue to ignore this, is that there are companies taht now exist solely for the purpose of moving money from companies to insurance providers and then from providers to doctors and hospitals. These companies lead to increased transaction costs and are making money by contributing nothing to society. Really look at what Canadians pay in taxes for their healthcare system...it is not less than we pay now for medicare/medicaid. I am by no means saying their system is not better, especially for some people, but it certainly doesn't cost less in income tax dollars. In addition, routing all insurance through a single provider woul not make it cheaper. It may streamline the process and lead to soem saved money via increased synergies and efficiencies, but it wouldn't take too long for that system to break down and become a monopolistic mess the way the phone industry once was, i.e. ATT and the Babay Bells. A one size fits all approach does not work, especially when not everyone is the same size.
Good point Darwal: I'm amazed insurance companies don't charge overweight and obese people more for their health care. They are obviously at a higher risk, and they do it to smokers.
p.s. free market health care with LIMITED government support for the poor and elderly is the way to go. afterall, when has the government done something more efficiently than a free market?
President Bush's Bold Proposal™ for 2006 is apparently going to be Health Savings Accounts, a half-baked pseudo-solution to the healthcare crisis that sounds intriguing primarily to people who are young and healthy and therefore don't think they're going to need much healthcare. That's just the right target audience for a healthcare plan, isn't it?
Technically, the idea behind HSAs is that you put, say, $2,000 in a tax-free account and then buy a health plan that doesn't pay anything until your expenses exceed $2,000. You pay for your normal healthcare expenses by drawing money out of the HSA, and if there's any left over at the end of the year you get to keep it. Ezra has more about it here.
However, for the quick and dirty explanation behind HSAs, here is Peter Gosselin in the LA Times this morning:
Most conservatives — including those in the administration — believe that the root cause of most problems with the nation's healthcare system is that most Americans are over-insured.
The debate over HSAs is going to get mighty wonky over the next few months, but always keep this explanation in mind as you're trying to make sense of the charges and countercharges. The fundamental idea behind HSAs is not to provide better healthcare, it's to provide less healthcare. Conservatives want you to think twice before spending a hundred bucks for your regular pap smear.
I'm probably going to write enough about HSAs over the next few months to make everyone scream for mercy, especially since I assume the White House will decline to publish an actual plan, leaving us instead to speculate wildly about what they really have in mind. So I'm going to wrap up this post right here. Just remember: if you think more risk, more complexity, and less healthcare are the answer, HSAs are for you. The rest of us will keep pushing for something that actually makes sense.
Also, these HSAs have been available for more than 2 years. These plans can be used in conjunction with certain other programs so that people can get their 'regular hundred dollar pap smear'. No one ever said The plan people shouldn't use healthcare systems. This si simply a good opportunity for a lot of people, not everyone, to more effectively manage their own healthcare situation.
Hey Darwal does using these HSAs to pay for a pap smear simply shift the cost of said pap smear from insurer to insured? If you open an HSA will your insurance premiums drop accordingly? Does routine preventive medicine not warrant coverage by health insurers, even though the cost of health care is reduced when people utilize primary care facilities and not wait until a problem has developed intop something more serious and costly? Also did you see the recent story on CNN/Money, how they are cutting 39 billion in aid to medicare/medicaid to facilitate a 70 billion dollar tax cut. Also on the table to pay for these expense is allowing the rate for student loans to increase.
You show me how the shift of cost from insurer to insured lowers the overall cost of healthcare and I may be a believer.
I didn't day at any point that it shifts the cost of healthcare, I simply said that in my own, and many other people's cases, it is a better option. But, and this is not an end-all solution or all encompassing explanation, in simplified terms: If I have an HSA rathe than use standard insurance, when I go to the doctor for a visit I pay directly out of my HSA account on the spot. If I use co. insurance, then I pay $5 now, an administrator sends a bill, etc to a third party 'holding co.' who in turn sends a summary of bills to my insurance company, who sends money back to holding co, who pays out the doctor's office. By using the HSA the doctor/hospital/medical provider just recieved their full payment 2 months earlier, without having to pay a third party holding co to collect, driving down the average transaction cost. I will certainly agree that this would only represent at most 10-15% of medical payment situations, at least from my own research and observance, but even a 10% in costs to medical providers offers the potential for lower healthcare costs. The only reason I have a lot of faith in the benefits in offering HSAs as an option is because in my last position I dealt in benefits accounting and got to see how the system worked and it infuriates me to watch these holding-type companies make money by doing nothing but transferring money around and not really helping anyone. So really, in addressing your shift of cost question, my belief is that by lowering the incremental cost of doctors/healthcare professionals doing business by certain people using HSAs (only those people who choose to do so and feel they are also benefitting) then the overall cost of healthcare will slowly decrease. This is not really a full shift of costs from insurer to insured, since there is not cost to insurers to begin with. All insurance co.s do is make money, and very well. By switching to an HSA all I did was stop paying portions of severallpeople's healthcare who use the same insurance as me, and instead began to manage my own personal healthcare costs. Again, this is only a realistic option for younger, healthier people.
I was not referring to any medicare/caid cuts or student loan/education issues, a that is a whole different discussion.
So now you pay directly from your money to cover a procedure that was previously covered by your insurance, which you also pay for. The only way you stop paying for other peoples care is if you no longer carry insurance, which if it is the case you have my sympathies. The reason reimbursement of healthcare costs take so long is because the insurance companies have to ok payment.
The easiest way to lower healthcare costs is to increase inclusion. yes as a young healthy person you now pay more than you "should", in fact you will always be paying more than you should until something happens.
The cost of healthcare is not a static thing, as technology and science move forward so do diagnostic capability and treatment methods. These are costly in their own right. I agree that reducing administrative healthcare costs needs to happen, but I disagree that HSAs accomplish this.
Yeah, that's exactly how it works. You essentially do stop carrying insurance. I only have insurance for something major-like emergency surgery. Instead of paying for insurance you save money in a tax-free account and hedge against future healthcare costs, making payments for medical costs out of that account. So for all intents and purposes I am then self-insured. For someone inmy situation it makes more sense for me to prudently save money in an account like this for the day when I might need it, and then when that time passes, and it becomes clear I no longe need to be saving that money, I pay the taxes on it and move it out of the HSA into a retirement account.
If you can't see how HSAs have the potential to lower administrative costs then the whole "cut out the middle man" concept completely illudes you. Again, I specifically addressed that this was not the foremost method to compat rising costs, but talk to any doctor or hospital administrator and you will find out that dealing with payment collection is a huge issue for them. And if, as you said, insurance companies ok'ing payments is what slows down the process (really only half the slow-down and ok'ing process) then avoiding dealing with hem is clearly going to reduce collection cost and administrative time. Still, like I have said, this is not the optimal solution for everyone, but HSAs are good options for some people and not some demonic concept that people are making it out to be.
Yeah Darwal the concept of cutting out the middle man completely illudes me.
Also how much experience do you have with the cost of medicine today, how much do you think your measley two grand will cover?
So basically it is a savings account that you get to put into and can only use for one purpose, yet you still have to carry insurance they just won't have to pay until you use up your two grand instead of the lower deductible. Genius the insurance companies have found a way for people to pay more for less.
You still will have to deal with holding companies b/c the costs overwhelm what you will be able to put away.
Nobody said HSAs were demonic, just a stupid idea. A better one for lowering costs would be to bring more people in reducing the premiums for everyone. Another idea would be to have procedure specific deductibles, less for routine/peventive medicine more for preventable/elective procedures.
There are no easy solutions but letting the parasitic insurance companies off just seems stupid to me.
Hey guys, really sorry for missing out on the HSA talks. This is the first time I checked out the comments in a while. Not trying to avoid debate. I have to go to bed now, but I will discuss this weekend. Perhaps a new post is warranted.
real quick, though: HSA's can be considered "good" for some. Like you said, Darwal, they may work for you.
However, anonymous points out a system that fails many. More importantly, from my studies of the topic is that in the long run it is going to allow insurance companies to identify "unhealthy" people....because they won't take the HSA option....then the insurance can jack them even worse.
All this patchwork is BS. We must have nothing short of universal coverage.
Okay, now i am really going to bed. Sorry, again, for not responding sooner.
By the way, if that really was Kevin Drum, its awesome. He runs the Washington Monthly page www.washingtonmonthly.com), which is one of the top blogs in the country. and it provides, by far, the best policy analysis of any site. And the magazine is a must read.
I pay approximately $45/year for my insurance now. I have three years worth of HSA deposits saved, so unless I really screwed myself up, I would be ok. If I elected to go thru a company insuracne option, the cheapest woul dbe for me to pay $80/month with a compnay payment of almost $420/month (including all their benefits transactions - $500/month=$6,000/year). Now instead I have a contingent saving accoutnt hat I won't have to use on medical expenses and don't just hand over to someone and I saved myself/employer multiple thousands of dollars. If all I have to use the HSA for is routine "well-checks" with the doctors office then the HSA is a more than viable option. You keep insisting that I am somehow carrying insurance and paying my own expenses, fine, I am carrying insurance at less than 1% of the cost, not exactly onerous. Your account balnce doesn't just disappear at year's end the way insurance payments do, you get to continue to keep that money and add to it, along with accumulating interest, and in the event you never use it, you get the money back after retirement, with the interest.
Chuck, I don't really think this is a patchwork BS solution, especially since this isn't a new thing. I think it is just an option for some people to utilize, just same as any investment options for people managing their retirements and such. Insurance companies won't be able to identify "unhealthy" people to jack up their rates because of several reasons, including: the people not using HSAs predominantly are family/married people, not neccesarily unhealthy, they get their insurance through work, where more often than not, they don't get to/aren't allowed to evaluate healthy/unhealthy people, and the insurance co.s have fixed contracts for insurance costs with these companies who provide benefits.
The real scam to jack up unhealthy people insurance rates are the tobacco companies who go and give out free cigarettes and chew at bars, but require you to let them scan and copy your id, which they then sell to insurance companies, identifying you as a tobacco user.
Darwal, here is one of the problems I have with your scenario. You are currently a single twentysomething in good health (all assumptions, if not true just assume you are for the sake of argument) no dependents. You are not paying into the system, which will drive up costs for those that are, you will have a different view when your current situation changes and you have kids, spouse etc. HSAs as you have explained are nothing more than specific savings account, which save the INSURANCE CO money by having people like yourself removed from the equation resulting in higher premiums for those that NEED health care. You currently are ok with getting dollar for dollar cost from your healthcare money, with healthcare this can be a dangerous risk to play.
The problem with you equating healthcare to retirement is one is a certainty (you will not work forever) while one is not, hence the need for insurance. With HSAs you move further away from a more inclusive system which I believe will result in a more equitable distribution of access/affordability of healthcare, which is something I have a problem with.
HSAs may be great for YOU but do they aid in creating a better way to deliver healthcare? I think they don't
As for universal health care, if there was ever a huge benefit to small businesses/entrepreneurs, not having to deal with healthcare would probably be it imho
Like I said, that is the case and I can currently benefit from the scenario I am in by not enrolling in co-pay insurance. Your agrument that I am "not paying into the system, which will drive up costs for those that are...HSAs as you have explained are nothing more than specific savings account, which save the INSURANCE CO money by having people like yourself removed from the equation resulting in higher premiums for those that NEED health care" doesn't add up in that I do not at any point save insurance companies money, I rather save medical providers money. Insured healthy people are cash cows for insurance companies, hence my lack of enrollment doesn't save them money, but as you correctly point out could lead to higher premiums for others. I simply feel that since this option exists I shjould take advantage of it as long as it is feasible fo me to do so or until I see a better option come around. Yes one day I will stop working, but there is no guarantee my health will deteriorate rapidly any time soon or that I will ever choose to marry/start a family, meaning that throguh effective and prudent saving and planning I could theoretically utilize this current HSA option for a rather extended length of time.
And again, all I was ever saying was that it was a good option for me and people in similar situations and that it did not fix any healthcare problems or offer wide-reaching solutions.
If you wanted to see a truly effective healthcare system at work look at Singapore. They have what is widely regarded as the world's best universal healthcare at the lowest relative cost. The major trade-off is that the people of Singapore give up a number of freedoms for this program, freedoms people in the US wouldn't be willing to give up. e.g. Their governmetn has implemented mandated "fat camp" for overweight kids.
Darwal You have health insurance you said so earlier, if you need to use it you have to exhaust your HSA before insurance pays-that is how you save them money.
You taking advantage of the system does so at a cost, born by those in the system, which you at some point will rejoin, very short-sided view on your part.
NO your health may not deteriorate rapidly, but it may- I think you have no idea the cost of procedures, I can google the cost of a double bypass, and your "prudent savings" aren't gonna cover it.
NO it doesn't solve any problems with health care by your own admission, so why is the president trying to pass this off as some reform of healthcare
The lossof money felt by the health insurance company as compared to what they avoided in paying out for me comes no where close to saving them money. Right now if I go to the doctor once a year and it costs me $100-250 for a routine physical, etc. plus the $45 annual catastrophic insurance paymetn I make, then that is all the money I have spent for the year on healthcare. If I have insurance, then the doctor visit costs me $5 and the insurance company the remaining $95-245, witht hem keeping any other portion of the estimated $5000-6000 of payments they received from myself/my employer. So yes, you are correct, in the most strict manner of speaking I saved the insurance company $95-245. But, they only received $45 from me rather than the estimated $5000-6000 from myself/my employer. So, and bear with me here, if my math is correct, the net effect for me is a total cost of at most less than $300 (250+45), while the insurance company saw their bottom line shift DOWN a roughly estimated minimum of $4700 (-5000 for lost premium, +250 for avoied doctor payment, +45 for catastrophic premium). So I don't really see how that results in net cost savigns to the insurance company, but if you can offer a better mathematic example I am open to looking at it.
YES, I am aware of the cost of medical procedures, with double bypasses ranging in excess of $20,000. How many people in their mid-twenties need double bypass surgery? Or for that matter in their mid-thirties? Unless I need a double bypass every 8th year or so, there is at least a chance I could swing it, as while the costs fo the procedure will undoubtedly increase, so will the contribution limit on HSAs.
Regardless of what people perceive the President as trying to do, this isn't something new.
Would I prefer for there to be a good, more encompassing solution in place? yes of course, but since there isn't I'm going to do what is best for me in this situation. You speak as if by opting out of traditional insurance and utilizing an HSA one is hurting other insured people, and this is not an entirely false point of view. But, it is not as if a person using an HSA avoids paying into Medicare/medicaid. No one ever said a person has to carry insurance at all. Don't you think that if people actually realized what healthcare and medical procedures cost they might reconsider ordering that triple whopper w/cheese and King-sie onion rings? (on a side note, those Burger King commercials witht he King playing football are incredible) There is no reason why a person should have to feel badly about making a choice in regards to his/her own healthcare management when they are already paying into a public system.
look my point is this-right now you are in a certain position regarding your health risks/costs. Your absence of participation is passed on to those who NEED health care, can't afford to pursue the route you are taking. You will not always be in your current state, and you will then face a more expensive system. i am talking/thinking on a national scale, you are focusing on your own situation only. And if you are able to put away $20k for a double bypass your in good shape, but don't forget the cost of your hospital stay, respiratory therapy, lost income from work et al. Here is where the insurance companies will force you back into the fold. No by utilizing HSAs/your approach what you are doing is driving up the cost for those of us that are 10-15 years older, which you will have to face as well. Again the more divisions made in the pool of people paying in the greater burden of cost for the insured.
I have deliberately avoided discussing medicare/medicaid because health costs of the middle class are generally paid for by insurance companies.
Darwal, I am not trying to dismiss your thorough comments. they are muched appreciated. But i am going to do a new post, soon, on this topic. i like the discussion, but want to expand it to a whole post. i don't think others will read our comments, because the story is down on the page.
however, i can summarize with: 1) agreeing with anonymous/Drum, 2) Anything short of universal care is inadequate.
Plus, I don't get how these HSA's would help if you only have an HSA (no other insurance) and you get cancer or paralyzed in a bad car accident.
If you opt to set up an HSA, generally, companies 'insist' you get the catastrophic coverage... If you don't at least do that then you are nuts.
If I get into that kind of accident I am covered by my catastophic, but at $45/year I don't feel badly at all paying ofr that.
I don't disagree that this is not a solution to healthcare issues, I was simply disagreeing that HSAs save insurance cos money, as my example clearly shows.
33 Comments:
I just wanted to explain exactly what will go on:
At 8:45 I will post the message board on the main page. It will appear just like a regular post. It will work just like a chat room. You will enter a name to your comment and will also be able to post anonymously.
My hope is that we can watch the speech "together" and chat about what is said. It is a bit of an experiment.
I will probably attend the Keeler Report live blogging session instead. Sorry, but I have allegiances. Still, good luck in your trial message board tonight
Thank you for those who attended the message board.
I thought it was an average speech. It was well delivered, but light on content. Big news was talking directly to the people of Iran and energy reform. Not that big a deal.
I like what Kaine had to say. I think they stole "there's a better way" from the movie The Candidate with Robert Redford. Great movie by the way.
Kyle I agree that it was an avergae speech. It was well dleivered. Not memorable. But was fine.
I disagree on Kaine. I thought he looked bad. But anyone would look little to the President following him.
I hope Bob Turkley didnt come here and cause too much trouble
Here is a sample of what was discussed during our live chat:
dorner: importing drugs from canada = bad times
dorner: some newbie in any event
bob turkley: this guy is terrible but it is a tough speech to give bob t
zazzon: is "there's a better way" vague and wishy washy?
kutuchief: I'm really proud of this Democratic response.
kutuchief: I like the "there's a better way" theme.
kutuchief: Kaine needs to learn how to tie a tie. The knot is way too small.
zazzon: peace in the middle west (b/c that's where were from)
kutuchief: Good idea zazz. Hopefully we can bring this back for future big events.
kutuchief: I guess the big news is that Bush "spoke to the Iranian people."
zazzon: kut, you should do somthing like this in an "around the horn" format. bring up an issue and hear responses from diff people.
kutuchief: I thought it was a pretty average speech. Not much in there.
aaron: I thought we were moving in the wrong direction of eliminating the deficit.
kutuchief: That is so dumb that congressmen are getting the President's autograph
zazzon: kut, remember those words "vague" and "wishy washy" the next time a dem is speaking. those words define the left
kutuchief: I was kidding by suggesting Mayor Ray "Chocolate" Nagin of New Orleans
bob turkley: gov from VA bad choice and i am a moderate bob t
kutuchief: Zazzon, you are probably right on the dem response.
dorner: some newbie in any event
kutuchief: Nagin?
Kyle, sorry, but I couldn't watch. Meaning, I chose to not put myself thru the stress of listening to the guy talk. Tonight I am going to read the text.
But i was MIA last night, because I just couldn't torture myself.
When I knew he was going mention those "private health savings accounts" I lost it. Those are actually a WORSE idea then his Social Security reform.
Bush gave the speach that everyone expected, nothing really new. I was not impressed with Kaine, white watching I just kept feeling something was not right. Maybe it was his weird eye brow in the begninning, Did anyone else see that?
I really do not care who gives the response, but the "we can do better" has got to go. Saying that implies the other side is doing o.k. but we can do better then o.k....in my mind. The Governor was standing in front of a fireplace in a mansion and is supposed to be talking to all Americans?
I can't stand Bush, you all know that, but last night I don't know...if I'm a middle class American with no political affiliation I would not be voting Democrat...so the next thought is I don't want to die and want to protect my family so I will vote for Bush/Republicans.
The response may appeal to the people sick of the Dems attacking the President every minute, maybe that's where they were going with it.
I dont know, my thinking is the Dems need to just let Bush sink and start talking about their ideas and plans.
CHuck why do you disapprove of the health savings account?
Seriously Chuck, rather than an insurance company getting rich off of my premiums and companymatch evry monht, I instead set aside money to pay for my own potential health care costs and only carry catastrophic insurance ofr if something happens that cost a lot of money. maybe we are talking about different hings, but that's pretty much how HSAs work. You just make a pre-tax payment into said account. It is almost exactly like putting money into a Roth IRA, except the money is for healthcare costs instead of retirement. This isn't a way of avoiding paying into medicare or social security so I don't really understand your complaint. I think it's pretty reasonable to give people a choice between having to pay for company sponsored healthcare or no insurance at all.
This explaination of the HSAs works nicely if you're a healthy young single person. What about the family of 5? Kids' health problems are expensive, and they happen all the time. Even basic check-ups are expensive. And what constitutes catastrophic - $500? $1,000? or is it $20,000? Personally, I'm ok with paying $150 a month for my spouse and myself, knowing that it will pay for everything - routine visits and catastrophic events.
A better system would be for the government to ease the burden. The amount we pay for health insurance could easily help everyone in America if it were routed to a single provider rather than for-profit companies. Similar to Canada and Europe. We would also see our income taxes lowered because Medicaid would be eliminated.
Sorry for the numerous typos before. I never said HSAs were good for everyone. It is perfect for me (I believe it is over $1000/2000 depending on the incident in my personal case). I don't see a need for the company I work fro or myself to pay for something I don't really need. I view this in the same light as if I were to store two months supply of wheat under my bed every month and then throw it away on the 30th/31st. For people with spouses/kids/health concerns then co. provided insurance is very nice. Personally I like having the choice. One day I will probably switch to 'standard' insurance when I have other people to take into account, but for right now I feel like this is the best use of my income. I work hard, I eat (relatively) right, and I exercise. I don't feel that at this point in my life there is any advantage fo me to pay more money so that the overweight gentleman down the hall from me making twice as much money can stuff his face with cream sticks and milkshakes all day knowing that the financial burden o his poor health will be carried by everyone else.
You have to be pretty naive to belive that switching to a singularly run insurance provider would siginificantly lower income taxes because there would be no need for medicare. One of the major problms with our current system, and people seem to continue to ignore this, is that there are companies taht now exist solely for the purpose of moving money from companies to insurance providers and then from providers to doctors and hospitals. These companies lead to increased transaction costs and are making money by contributing nothing to society. Really look at what Canadians pay in taxes for their healthcare system...it is not less than we pay now for medicare/medicaid. I am by no means saying their system is not better, especially for some people, but it certainly doesn't cost less in income tax dollars. In addition, routing all insurance through a single provider woul not make it cheaper. It may streamline the process and lead to soem saved money via increased synergies and efficiencies, but it wouldn't take too long for that system to break down and become a monopolistic mess the way the phone industry once was, i.e. ATT and the Babay Bells. A one size fits all approach does not work, especially when not everyone is the same size.
Good point Darwal: I'm amazed insurance companies don't charge overweight and obese people more for their health care. They are obviously at a higher risk, and they do it to smokers.
p.s. free market health care with LIMITED government support for the poor and elderly is the way to go. afterall, when has the government done something more efficiently than a free market?
HEALTH SAVINGS ACCOUNTS....
President Bush's Bold Proposal™ for 2006 is apparently going to be Health Savings Accounts, a half-baked pseudo-solution to the healthcare crisis that sounds intriguing primarily to people who are young and healthy and therefore don't think they're going to need much healthcare. That's just the right target audience for a healthcare plan, isn't it?
Technically, the idea behind HSAs is that you put, say, $2,000 in a tax-free account and then buy a health plan that doesn't pay anything until your expenses exceed $2,000. You pay for your normal healthcare expenses by drawing money out of the HSA, and if there's any left over at the end of the year you get to keep it. Ezra has more about it here.
However, for the quick and dirty explanation behind HSAs, here is Peter Gosselin in the LA Times this morning:
Most conservatives — including those in the administration — believe that the root cause of most problems with the nation's healthcare system is that most Americans are over-insured.
The debate over HSAs is going to get mighty wonky over the next few months, but always keep this explanation in mind as you're trying to make sense of the charges and countercharges. The fundamental idea behind HSAs is not to provide better healthcare, it's to provide less healthcare. Conservatives want you to think twice before spending a hundred bucks for your regular pap smear.
I'm probably going to write enough about HSAs over the next few months to make everyone scream for mercy, especially since I assume the White House will decline to publish an actual plan, leaving us instead to speculate wildly about what they really have in mind. So I'm going to wrap up this post right here. Just remember: if you think more risk, more complexity, and less healthcare are the answer, HSAs are for you. The rest of us will keep pushing for something that actually makes sense.
—Kevin Drum
thank you for your explanation Kevin Drum
Also, these HSAs have been available for more than 2 years. These plans can be used in conjunction with certain other programs so that people can get their 'regular hundred dollar pap smear'. No one ever said The plan people shouldn't use healthcare systems. This si simply a good opportunity for a lot of people, not everyone, to more effectively manage their own healthcare situation.
Hey Darwal does using these HSAs to pay for a pap smear simply shift the cost of said pap smear from insurer to insured? If you open an HSA will your insurance premiums drop accordingly? Does routine preventive medicine not warrant coverage by health insurers, even though the cost of health care is reduced when people utilize primary care facilities and not wait until a problem has developed intop something more serious and costly?
Also did you see the recent story on CNN/Money, how they are cutting 39 billion in aid to medicare/medicaid to facilitate a 70 billion dollar tax cut. Also on the table to pay for these expense is allowing the rate for student loans to increase.
You show me how the shift of cost from insurer to insured lowers the overall cost of healthcare and I may be a believer.
http://money.cnn.com/2006/02/01/new...dex.htm?cnn=yes
here's the link
I didn't day at any point that it shifts the cost of healthcare, I simply said that in my own, and many other people's cases, it is a better option. But, and this is not an end-all solution or all encompassing explanation, in simplified terms: If I have an HSA rathe than use standard insurance, when I go to the doctor for a visit I pay directly out of my HSA account on the spot. If I use co. insurance, then I pay $5 now, an administrator sends a bill, etc to a third party 'holding co.' who in turn sends a summary of bills to my insurance company, who sends money back to holding co, who pays out the doctor's office. By using the HSA the doctor/hospital/medical provider just recieved their full payment 2 months earlier, without having to pay a third party holding co to collect, driving down the average transaction cost. I will certainly agree that this would only represent at most 10-15% of medical payment situations, at least from my own research and observance, but even a 10% in costs to medical providers offers the potential for lower healthcare costs. The only reason I have a lot of faith in the benefits in offering HSAs as an option is because in my last position I dealt in benefits accounting and got to see how the system worked and it infuriates me to watch these holding-type companies make money by doing nothing but transferring money around and not really helping anyone. So really, in addressing your shift of cost question, my belief is that by lowering the incremental cost of doctors/healthcare professionals doing business by certain people using HSAs (only those people who choose to do so and feel they are also benefitting) then the overall cost of healthcare will slowly decrease. This is not really a full shift of costs from insurer to insured, since there is not cost to insurers to begin with. All insurance co.s do is make money, and very well. By switching to an HSA all I did was stop paying portions of severallpeople's healthcare who use the same insurance as me, and instead began to manage my own personal healthcare costs. Again, this is only a realistic option for younger, healthier people.
I was not referring to any medicare/caid cuts or student loan/education issues, a that is a whole different discussion.
So now you pay directly from your money to cover a procedure that was previously covered by your insurance, which you also pay for. The only way you stop paying for other peoples care is if you no longer carry insurance, which if it is the case you have my sympathies.
The reason reimbursement of healthcare costs take so long is because the insurance companies have to ok payment.
The easiest way to lower healthcare costs is to increase inclusion. yes as a young healthy person you now pay more than you "should", in fact you will always be paying more than you should until something happens.
The cost of healthcare is not a static thing, as technology and science move forward so do diagnostic capability and treatment methods. These are costly in their own right. I agree that reducing administrative healthcare costs needs to happen, but I disagree that HSAs accomplish this.
Yeah, that's exactly how it works. You essentially do stop carrying insurance. I only have insurance for something major-like emergency surgery. Instead of paying for insurance you save money in a tax-free account and hedge against future healthcare costs, making payments for medical costs out of that account. So for all intents and purposes I am then self-insured. For someone inmy situation it makes more sense for me to prudently save money in an account like this for the day when I might need it, and then when that time passes, and it becomes clear I no longe need to be saving that money, I pay the taxes on it and move it out of the HSA into a retirement account.
If you can't see how HSAs have the potential to lower administrative costs then the whole "cut out the middle man" concept completely illudes you. Again, I specifically addressed that this was not the foremost method to compat rising costs, but talk to any doctor or hospital administrator and you will find out that dealing with payment collection is a huge issue for them. And if, as you said, insurance companies ok'ing payments is what slows down the process (really only half the slow-down and ok'ing process) then avoiding dealing with hem is clearly going to reduce collection cost and administrative time. Still, like I have said, this is not the optimal solution for everyone, but HSAs are good options for some people and not some demonic concept that people are making it out to be.
Yeah Darwal the concept of cutting out the middle man completely illudes me.
Also how much experience do you have with the cost of medicine today, how much do you think your measley two grand will cover?
So basically it is a savings account that you get to put into and can only use for one purpose, yet you still have to carry insurance they just won't have to pay until you use up your two grand instead of the lower deductible. Genius the insurance companies have found a way for people to pay more for less.
You still will have to deal with holding companies b/c the costs overwhelm what you will be able to put away.
Nobody said HSAs were demonic, just a stupid idea. A better one for lowering costs would be to bring more people in reducing the premiums for everyone. Another idea would be to have procedure specific deductibles, less for routine/peventive medicine more for preventable/elective procedures.
There are no easy solutions but letting the parasitic insurance companies off just seems stupid to me.
Hey guys, really sorry for missing out on the HSA talks. This is the first time I checked out the comments in a while. Not trying to avoid debate.
I have to go to bed now, but I will discuss this weekend. Perhaps a new post is warranted.
real quick, though:
HSA's can be considered "good" for some. Like you said, Darwal, they may work for you.
However, anonymous points out a system that fails many. More importantly, from my studies of the topic is that in the long run it is going to allow insurance companies to identify "unhealthy" people....because they won't take the HSA option....then the insurance can jack them even worse.
All this patchwork is BS. We must have nothing short of universal coverage.
Okay, now i am really going to bed. Sorry, again, for not responding sooner.
By the way, if that really was Kevin Drum, its awesome. He runs the Washington Monthly page www.washingtonmonthly.com), which is one of the top blogs in the country. and it provides, by far, the best policy analysis of any site.
And the magazine is a must read.
I pay approximately $45/year for my insurance now. I have three years worth of HSA deposits saved, so unless I really screwed myself up, I would be ok. If I elected to go thru a company insuracne option, the cheapest woul dbe for me to pay $80/month with a compnay payment of almost $420/month (including all their benefits transactions - $500/month=$6,000/year). Now instead I have a contingent saving accoutnt hat I won't have to use on medical expenses and don't just hand over to someone and I saved myself/employer multiple thousands of dollars. If all I have to use the HSA for is routine "well-checks" with the doctors office then the HSA is a more than viable option. You keep insisting that I am somehow carrying insurance and paying my own expenses, fine, I am carrying insurance at less than 1% of the cost, not exactly onerous. Your account balnce doesn't just disappear at year's end the way insurance payments do, you get to continue to keep that money and add to it, along with accumulating interest, and in the event you never use it, you get the money back after retirement, with the interest.
Chuck, I don't really think this is a patchwork BS solution, especially since this isn't a new thing. I think it is just an option for some people to utilize, just same as any investment options for people managing their retirements and such. Insurance companies won't be able to identify "unhealthy" people to jack up their rates because of several reasons, including: the people not using HSAs predominantly are family/married people, not neccesarily unhealthy, they get their insurance through work, where more often than not, they don't get to/aren't allowed to evaluate healthy/unhealthy people, and the insurance co.s have fixed contracts for insurance costs with these companies who provide benefits.
The real scam to jack up unhealthy people insurance rates are the tobacco companies who go and give out free cigarettes and chew at bars, but require you to let them scan and copy your id, which they then sell to insurance companies, identifying you as a tobacco user.
Darwal, here is one of the problems I have with your scenario. You are currently a single twentysomething in good health (all assumptions, if not true just assume you are for the sake of argument) no dependents. You are not paying into the system, which will drive up costs for those that are, you will have a different view when your current situation changes and you have kids, spouse etc. HSAs as you have explained are nothing more than specific savings account, which save the INSURANCE CO money by having people like yourself removed from the equation resulting in higher premiums for those that NEED health care. You currently are ok with getting dollar for dollar cost from your healthcare money, with healthcare this can be a dangerous risk to play.
The problem with you equating healthcare to retirement is one is a certainty (you will not work forever) while one is not, hence the need for insurance. With HSAs you move further away from a more inclusive system which I believe will result in a more equitable distribution of access/affordability of healthcare, which is something I have a problem with.
HSAs may be great for YOU but do they aid in creating a better way to deliver healthcare? I think they don't
As for universal health care, if there was ever a huge benefit to small businesses/entrepreneurs, not having to deal with healthcare would probably be it imho
Like I said, that is the case and I can currently benefit from the scenario I am in by not enrolling in co-pay insurance. Your agrument that I am "not paying into the system, which will drive up costs for those that are...HSAs as you have explained are nothing more than specific savings account, which save the INSURANCE CO money by having people like yourself removed from the equation resulting in higher premiums for those that NEED health care" doesn't add up in that I do not at any point save insurance companies money, I rather save medical providers money. Insured healthy people are cash cows for insurance companies, hence my lack of enrollment doesn't save them money, but as you correctly point out could lead to higher premiums for others. I simply feel that since this option exists I shjould take advantage of it as long as it is feasible fo me to do so or until I see a better option come around. Yes one day I will stop working, but there is no guarantee my health will deteriorate rapidly any time soon or that I will ever choose to marry/start a family, meaning that throguh effective and prudent saving and planning I could theoretically utilize this current HSA option for a rather extended length of time.
And again, all I was ever saying was that it was a good option for me and people in similar situations and that it did not fix any healthcare problems or offer wide-reaching solutions.
If you wanted to see a truly effective healthcare system at work look at Singapore. They have what is widely regarded as the world's best universal healthcare at the lowest relative cost. The major trade-off is that the people of Singapore give up a number of freedoms for this program, freedoms people in the US wouldn't be willing to give up. e.g. Their governmetn has implemented mandated "fat camp" for overweight kids.
Darwal You have health insurance you said so earlier, if you need to use it you have to exhaust your HSA before insurance pays-that is how you save them money.
You taking advantage of the system does so at a cost, born by those in the system, which you at some point will rejoin, very short-sided view on your part.
NO your health may not deteriorate rapidly, but it may- I think you have no idea the cost of procedures, I can google the cost of a double bypass, and your "prudent savings" aren't gonna cover it.
NO it doesn't solve any problems with health care by your own admission, so why is the president trying to pass this off as some reform of healthcare
The lossof money felt by the health insurance company as compared to what they avoided in paying out for me comes no where close to saving them money. Right now if I go to the doctor once a year and it costs me $100-250 for a routine physical, etc. plus the $45 annual catastrophic insurance paymetn I make, then that is all the money I have spent for the year on healthcare. If I have insurance, then the doctor visit costs me $5 and the insurance company the remaining $95-245, witht hem keeping any other portion of the estimated $5000-6000 of payments they received from myself/my employer. So yes, you are correct, in the most strict manner of speaking I saved the insurance company $95-245. But, they only received $45 from me rather than the estimated $5000-6000 from myself/my employer. So, and bear with me here, if my math is correct, the net effect for me is a total cost of at most less than $300 (250+45), while the insurance company saw their bottom line shift DOWN a roughly estimated minimum of $4700 (-5000 for lost premium, +250 for avoied doctor payment, +45 for catastrophic premium). So I don't really see how that results in net cost savigns to the insurance company, but if you can offer a better mathematic example I am open to looking at it.
YES, I am aware of the cost of medical procedures, with double bypasses ranging in excess of $20,000. How many people in their mid-twenties need double bypass surgery? Or for that matter in their mid-thirties? Unless I need a double bypass every 8th year or so, there is at least a chance I could swing it, as while the costs fo the procedure will undoubtedly increase, so will the contribution limit on HSAs.
Regardless of what people perceive the President as trying to do, this isn't something new.
Would I prefer for there to be a good, more encompassing solution in place? yes of course, but since there isn't I'm going to do what is best for me in this situation. You speak as if by opting out of traditional insurance and utilizing an HSA one is hurting other insured people, and this is not an entirely false point of view. But, it is not as if a person using an HSA avoids paying into Medicare/medicaid. No one ever said a person has to carry insurance at all. Don't you think that if people actually realized what healthcare and medical procedures cost they might reconsider ordering that triple whopper w/cheese and King-sie onion rings? (on a side note, those Burger King commercials witht he King playing football are incredible) There is no reason why a person should have to feel badly about making a choice in regards to his/her own healthcare management when they are already paying into a public system.
look my point is this-right now you are in a certain position regarding your health risks/costs. Your absence of participation is passed on to those who NEED health care, can't afford to pursue the route you are taking. You will not always be in your current state, and you will then face a more expensive system. i am talking/thinking on a national scale, you are focusing on your own situation only. And if you are able to put away $20k for a double bypass your in good shape, but don't forget the cost of your hospital stay, respiratory therapy, lost income from work et al. Here is where the insurance companies will force you back into the fold.
No by utilizing HSAs/your approach what you are doing is driving up the cost for those of us that are 10-15 years older, which you will have to face as well. Again the more divisions made in the pool of people paying in the greater burden of cost for the insured.
I have deliberately avoided discussing medicare/medicaid because health costs of the middle class are generally paid for by insurance companies.
Darwal, I am not trying to dismiss your thorough comments. they are muched appreciated. But i am going to do a new post, soon, on this topic. i like the discussion, but want to expand it to a whole post. i don't think others will read our comments, because the story is down on the page.
however, i can summarize with: 1) agreeing with anonymous/Drum, 2) Anything short of universal care is inadequate.
Plus, I don't get how these HSA's would help if you only have an HSA (no other insurance) and you get cancer or paralyzed in a bad car accident.
If you opt to set up an HSA, generally, companies 'insist' you get the catastrophic coverage... If you don't at least do that then you are nuts.
If I get into that kind of accident I am covered by my catastophic, but at $45/year I don't feel badly at all paying ofr that.
I don't disagree that this is not a solution to healthcare issues, I was simply disagreeing that HSAs save insurance cos money, as my example clearly shows.
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