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Return to Article: Health Savings Shortfalls

• 27269
  

  Mr. Stuart makes some marvelous points about HSAs and how many can benefit from the program. The challenge in the marketplace is education. In a group environment for the 1st time people have to make an informed decision on the type of healthcare that want for the family. The problem is they don't understand how their current plan options work, the co-pay structure limits their understanding on how much they pay for healthcare and they forget to include the cost the pay for coverage into the entire cost for care.

  Very simply, people have a difficult time understanding the math problem when making the decision on purchasing health insurance.

  Larry Deegan Posted July 2, 2007 2:38 PM
• 27268
  

  This article distorts HSA's, as do most articles about them. It's somewhat ironic that Adcock claims that prices are hard to find, but then that price shouldn't matter in health care. If price shouldn't matter, should we even bother to learn what prices are for healthcare? Tell that to all the medical providers and professionals connected with healthcare who make their living that way. He is right about his first statement that pricing is hard to find, but simply blanketing everyone with HMO coverage will not solve the problem and will only serve to allow insurers to hide costs even more than is already done.

  Likewise, while family HMO coverage might only cost $4700 or so to gvt. workers, this amount is certainly subsidized by us ignorant taxpayers. The true cost of insuring a family under an HMO plan is closer to $10-12k. The HSA savings, if the feds were consistent in their funding, would likely keep participants well-covered in the event of a medical need. The big difference, as the first commenter said, is that HSA's are about choice. The system just needs to be adjusted to give people the tools to make those choices based on sound information. Whether Congress has the stomach to take that next step and to remove the control from the insurers is the ultimate question in the success or failure of the HSA program.

  Benefits Advisor Posted July 2, 2007 2:04 PM
• 27104
  

  Insurance has always been about risk. When you can predict your future claims, it's pretty easy to match up with the best coverage. Most Americans spend less the $600 per year. Most do not have their deductible and out-of-pocket saved. Congress simply created an incentive to get Americans to save. Yes an accident can wipe out HSA savings, therefore not a bad idea to have appropriate supplemental insurance. I often recommend children/teenagers/college students have a copay plan for those reasons. At least HSAs offer another choice. I look at copay plans as "use it or lose it". Plenty of info on the web and at: www.nahu.org

  Byrd Posted June 29, 2007 1:26 PM
• 27100
  

  When an employer offers choice, then EVERY employee is better off, because each worker can make a personal choice to stay with the current plan or choose a different option. HSAs are great for people who [a] have low out-of-pocket expenses (most insured Americans, particularly the young and middle-aged healthy), [b] want to reduce taxable income, [c] want to create a long-term health care savings vehicle in tandem with their 401(k), [d] have high unreimbursed dental/orthodontic, vision and chiropractic out-of-pocket costs and [e] value the certainty of premium savings over the possibility of high deductible expenses. HSA regulations place an out-of-pocket maximum on a family's total liability ($11,000 in 2007), and most plans cap out-of-pocket expenses far below this level. Think of automobile or homeowner's insurance: Individuals regularly increase their deductibles, knowing they are certain to reduce premiums but will be responsible for more of the out-of-pocket costs before the insurance company steps in and pays most or all of the remaining bill, with a ceiling on out-of-pocket costs.

  One reason health insurance is so expensive is that there aren't incentives for patients to be prudent consumers. Patients have been paying less and less of the total cost of inpatient, outpatient and prescription drug services for more than 40 years. Imagine a family's being allowed to fill a grocery basket every week for a $100 copay, regardless of volume purchased. That's the incentive structure that many health plans contain. Health plans have evolved into "health coverage," not "health insurance." Health plans no longer cover against just unexpected risk (the definition of "insurance"). They also cover expected (routine physical, occasional sick visit, etc.) costs, with no relation between quantity demanded by patients and cost. HSA plans are not perfect, and cost information is in its infancy (and could be greatly enhanced if the largest payers, governments, began to publish cost figures to jump-start "transparency"), but HSAs offer the prospect of making a lot of individuals better off and returning to the pre-HMO (pre-1980s for most people) model in which patients felt some financial impact of their treatments.

  Bill Stuart Posted June 29, 2007 1:03 PM
• 27039
  

  I'm 47 with two teenagers. Last year, I switched from an HMO to a HD/HSA plan. I expect it to save me up to $8000 this year, due to a lower premium combined with HSA savings (which can be rolled forward to next year contrary to what Bob says, who I assume is thinking of an FSA). His comment raises the point that the plans are misunderstood. My feeling is that more people will warm up to the plans over time.

  Gov Exec Reader Posted June 28, 2007 8:54 PM
• 27025
  

  I've had an HSA with Mail Handlers (MHBP) since they first came out and find this 'concern' about HSA's amusing/bewildering. First off, look at the base cost of the MHBP HSA versus BCBS Basic for a family. MHBP HSA costs me $1406/year after tax while BCBS costs $1655. MHBP HSA has a $4000 deductible however MHBP HSA supplies $2000 as cash I can use for medical expenses however I like. Meanwhile the $2000 I put in as a deductible is tax deductible. The math to determine my true MHBP HSA cost is $1406 - $2000 (from MHBP) + $2000 (my deductible) - $416 (my tax savings from making HSA contributions). In all my MHBP base cost is $990 versus $1655 for BCBS so right off the bat the HSA saves me $665 per year. Then when I compare post-deductible co-pays the HSA is superior here as well. For example a Doctor visit with MHBP is $15 whereas with BCBS Basic it is $20. A two day hospital visith with MHBP is $150 whereas with BCBS basic it is $200. My best estimate is that Fed employees don't use HSA's becuase a) their somewhat confusing b) they don't like to change insurance plans fearing that issues might arise, and c) it takes time to compare health insurance options and price them out. I firmly believe that if the true HSA costs were laid out versus non-HSA's Feds would move to them irregardless of their health status. By the way, my family had pre-insurance med bills of $45,000 last year and I've still priced out the HSA as better than other med insurance available to me in my area.

  J Logan Posted June 28, 2007 5:23 PM
• 27022
  

  In 2001 FEHB BCBS offered a new basic plan with a lower premium and reduced benefits. I stuck with the standard plan at the higher premium. In 2002 my son was involved in a serious accident which he survived by ultimately cost over $250,000 in hospital expenses. Had I been in basic my cost would have been hugely more expensive. Had an HSA been available then, and had I been in it, I would be bankrupt today. Beware the HSA.

  Keith McBride Posted June 28, 2007 4:50 PM
• 26991
  

  Sue points out that the first year of her HSA was scary because they didn't have enough to cover the deductable. Now that they have enough saved to cover it, what makes that number sacrosanct by the insurance provider? And what happens if they need all of it to cover an accident? How long will it take to save up another $3000 (or more) to meet the deductible? Will they not go to the doctor? Questions that need to be asked even of healthy people.

  Michelle Posted June 28, 2007 12:11 PM
• 26987
  

  Here's my issue, the article (and most marketing tools) say that "The 'consumer-directed' plans feature lower monthly premiums than traditional plans". I have yet to see that. Until the monthly premiums are actually lower than my Blue Shield PPO, I see no benefit to HSAs.

  ankle Posted June 28, 2007 11:53 AM
• 26978
  

  As one of the .2% enrolled in HSA I believe it works for my family - two adults in our early forties and two children 11 and 14. We are healthy, no prescriptions or diagnosed illnesses. In 2005 when I signed up I crossed my fingers that we would have no illnesses or broken bones in the first year because I wouldn't have saved up the $2200 deductible for benefits to kick in. Preventive care is covered and there are some dental benefits without a deductible (about as bad as most of the FEHB plans!) 2006 was less scary because I started with about $1000 in the account, the deductible was within reach if we had a medical emergency. This year I have over $3000 in the HSA, the deductible went up to $3000 this year, but the HSA receives $180/month instead of $120/month. Now that I have $ to cover the deductible, I feel that my plan is comparable to the other plans, with the difference that I receive most of the premium I pay in my own acct. HSA would not work for a family with large medical expenses.

  Sue Posted June 28, 2007 10:57 AM
• 26964
  

  The biggest issue with HSAs is they are like gambling (too much saved, with not enough used... you loose), and most of us don't gamble. If they want us to partially self insure, get rid of the use it or loose it mentality.

  bob Posted June 28, 2007 10:18 AM
• 26960
  

  We have FSA and BCBS. Our problem is we really don't understand how HSA would work.

  Fact: My wife and I are over 50. Do about $2000 a year for FSA and use all money months before the new year. Wife has irregular heart beat, she is on medinice to control the beat. We like BCBS because we are able to choose the doctors, copays are $20 and $30. We pay medical expenses for two kids, now we only have one left, for the next 3 years.

  If we switch to HSA, can we keep FSA and current BCBS coverage; or, do we get HSA and current coverage (does the coverage stays the same or does that change); or, we get HSA and a modified BCBS coverage (we have to pay more out of pocket expenses).

  The questions are

  Is the current health plan cost per month lower?

  Will HSA cause higher out pocket expenses. We understand HSA will remibursed us for the additional costs.

  Will the switch to HSA lower our costs compared to current plan, BCBS and FSA?

  Could one operation empty the HSA and cause us to have a debt we have to pay off. Right now for a $30,000 operation we paid about $400-$800. How would that work with HSA?

  anonymous Posted June 28, 2007 9:50 AM
• 26959
  

  Criticism of failing system often times is directed towards Congress. While the fact of the matter Congress is mostly (>80%) influenced by Lobbyists who are paid mega bucks by sector industry to lobby in that sector's favor (financial gains) at the expense of the general public. Consumer Advocates groups and their constituencies, on the other hand, are lacking adequate resources, under paid or ill informed, and do not do as a good a job as those hired guns.

  The end result, and for lack of better information resources (?), Congress is kind of under siege and the "industry" lobbying groups are having a field day, infiltrating the committees and influencing our representatives at tax payers expense. It is in the best interest of all for Congress to diligently recognize the root of the health care problem - among others - which in part is attributed to the unbalanced lobbying activities from sector interests; and provide the solution by rely more on congressional resources such as Library of Congress researchers (not contractors) for factual information, reliable, balanced data, and representative data.

  M N Posted June 28, 2007 9:49 AM
• 26948
  

  Have Human Resource offices train to teach federal employees what this is all about. To read the information; you get good and bad information making it hard to understand thus just ignore the HSA.

  Gary Schell Posted June 28, 2007 8:38 AM