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The end of HSA's?
Old 09-15-2009, 06:52 PM   #1
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The end of HSA's?

I read this

Reform plans leave Health Savings Accounts in limbo - Sep. 15, 2009

on CNN.COM. I have an HSA and have been very happy with it. Hope they manage to draft a healthcare bill that somehow manages to preserve these plans. For us, the combination of an HDHP and as HSA has meant: (1) insurance at a lower cost (premiums + out of pocket costs) vs. traditional health plans, (2) a means to reduce current taxes by contributing pre-tax dollars to the HSA; and (3) a meand for funds to grow free. Sort of a trifecta of insurance. Too good to be true--so makes sense they would kill them.
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Old 09-15-2009, 06:53 PM   #2
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Disappointing to me--I'd hoped to use this option once DH retires early, as we've been using his company sponsored plan.
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Old 09-15-2009, 06:56 PM   #3
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It's possible. I suspect they will at least grandfather existing account balances under current rules, but may stop the ongoing tax breaks for them. Personally I've been very happy with mine and I'd hate to see it go.
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Old 09-15-2009, 07:06 PM   #4
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I was planning on using one in another year or two. Suppose Ill have to readjust my plans.
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Old 09-15-2009, 07:41 PM   #5
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HSA's are supported by the political party not currently in power. As such, I don't think they'll survive.
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Old 09-15-2009, 08:19 PM   #6
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Remember the House bill is over a thousand pages of legalese. There is NOTHING good for honest tax payers that is going to come out of this. Any thing that works like HSA's are going to be destroyed for sure.

In 1966
President Johnson, estimated that Medicare would cost an inflation-adjusted $12 billion by 1990. In 1990, Medicare topped $107 billion. Only God know what it is today. The lie's being told today are are at least in the same league as the ones told in 1966 and in my opinion much larger.

All we can do now is hang on and hope.

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Old 09-16-2009, 07:27 AM   #7
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Way too early to bury the HSA, with the speed in which Congress acts, I think the HSAs will be around for awhile.
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Old 09-16-2009, 07:35 AM   #8
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HSA's are supported by the political party not currently in power. As such, I don't think they'll survive.
Those in power will probably get rid of the HSA in favor of some new program that they are giving the American people. It will be very similar to the HSA and allow rollovers. Maybe call it the Savings Account for the Doctor or "SAD".

Seriously I figure at a minimum my existing HSA balance will be grandfathered in and it can continue to grow tax free.
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Old 09-16-2009, 11:21 AM   #9
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Without doubt congress will still want to provide an incentive toward higher deductibles. Tax treatment of medical expenses also needs to be revisited. HSA is far from abolished and could even be strengthened.
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Old 09-16-2009, 11:22 AM   #10
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Without doubt congress will still want to provide an incentive toward higher deductibles. Tax treatment of medical expenses also needs to be revisited. HSA is far from abolished and could even be strengthened.
I just saw a "summary" (still over 200 pages) of the Baucus plan and it doesn't seem to eliminate HSAs. It does, however, propose increasing the penalty for early HSA withdrawals for non-medical reasons from 10% to 20%.
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Old 09-16-2009, 11:48 AM   #11
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I saw this from the msnbc article on the Baucus plan just released:

"Everyone covered through an employer would learn the full costs of their health benefits, which starting next year would be reported on employees' W-2 tax forms. Although family coverage averages about $13,000 a year most workers don't know how much their employer is paying."

This doesn't make it clear whether the health insurance costs will be merely shown on the W-2 (ie informational) or whether they will actually be added into your gross taxable income on the w-2. If the latter, I hope whatever "benefits" come out of this bill kick in next year as well, and not 4 years later like was proposed earlier.

This bill makes it sound like the plans offered will be tightly regulated. As a result, they may not repeal the HSA, but they make it impossible to contribute to one, thereby effectively repealing the HSA. The way the HSA authorization is written now, you must have a qualifying high deductible health insurance plan to be eligible to contribute to an HSA. Those high deductible plans may be disallowed under any new health insurance legislation.
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Old 09-16-2009, 12:34 PM   #12
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I guess along with the question with health care reform be the end of the HSA? Let's say after reform the HSA does not go away and pretty much stays the same and several of the reform items (no pre-existing conditions, no lifetime maxium, reasonable premiums) does past, which type of insurance would you choose?

Guess it's way too early in the ballgame now, but that's a question all HSA owners may decide later.
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Old 09-16-2009, 12:38 PM   #13
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I guess along with the question with health care reform be the end of the HSA? Let's say after reform the HSA does not go away and pretty much stays the same and several of the reform items (no pre-existing conditions, no lifetime maxium, reasonable premiums) does past, which type of insurance would you choose?

Guess it's way too early in the ballgame now, but that's a question all HSA owners may decide later.
Yeah -- it's way too early to say. It would depend on how the reforms and initiatives change the pricing of health insurance.
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Old 09-16-2009, 12:51 PM   #14
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I guess along with the question with health care reform be the end of the HSA? Let's say after reform the HSA does not go away and pretty much stays the same and several of the reform items (no pre-existing conditions, no lifetime maxium, reasonable premiums) does past, which type of insurance would you choose?
I would adversely select myself into the plan with the highest benefit to cost ratio. If my family and I were very healthy, I would choose the absolute cheapest plan that provided adequate coverage. If my family and I have expensive medical needs and/or pre-existing conditions, I would choose the gold plated plan as long as it would provide more from it than what I was paying in.

It isn't really clear how any of these proposals are going to address the adverse selection issue between different coverage tiers. And furthermore, it may be much more reasonable to pay the $3800 a year fine for a family for having no coverage and pay out of pocket until you get some big condition that will be expensive. Then pay the insurance premiums on a gold plated plan.

I would assume the plan crafters and budget analysts/forecasters are at least moderately familiar with the basic economic issues in the insurance marketplace. Let's hope so.
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Old 09-16-2009, 07:32 PM   #15
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It isn't really clear how any of these proposals are going to address the adverse selection issue between different coverage tiers.
My guess is that they'll do that by mandating what insurers must cover.


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And furthermore, it may be much more reasonable to pay the $3800 a year fine for a family for having no coverage and pay out of pocket until you get some big condition that will be expensive. Then pay the insurance premiums on a gold plated plan.
Some people will do that. It is actually an economically rational thing to do if you don't have any assets that you need to protect. But for anyone who actually owns something they don't want to lose, it seems like a foolish gamble. You can run up hundreds of thousands of dollars in medical bills in a month, no problem.

In NJ, where you can't be denied coverage for pre-existing conditions, you have to wait a year before your coverage for those conditions takes effect if you didn't have insurance before.
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Old 09-16-2009, 09:30 PM   #16
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I get confused about these things. I guess that is why I have always w**ked for a living instead of being smart enough to be a politician.. Lets see now about 40 percent of children born in this country are born out of wed lock. Would some one explain to me who you are going to charge the $3800 to if this "Family" decides to not have health insurance?....... A) and unwed mother with children..... B) the biological father..... C) The present boyfriend.... D) "retired rich people"

Are we going to start putting people in Jail if they don't buy Health insurance and don't pay the fine.. ?
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Old 09-17-2009, 01:57 AM   #17
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Lets see now about 40 percent of children born in this country are born out of wed lock. Would some one explain to me who you are going to charge the $3800 to if this "Family" decides to not have health insurance?....... A) and unwed mother with children..... B) the biological father..... C) The present boyfriend.... D) "retired rich people"

Are we going to start putting people in Jail if they don't buy Health insurance and don't pay the fine.. ?
Whom ever has legal custody would be liable for the charge. If there's joint custody then they pay equally. Seems simple enough. If you don't buy health ins. or pay the fine then it gets treated just like not paying your taxes.
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Old 09-17-2009, 08:47 AM   #18
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Whom ever has legal custody would be liable for the charge. If there's joint custody then they pay equally. Seems simple enough.
Some states have different custody laws than the feds, so you can have murky situations that are not that simple.
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Old 09-17-2009, 08:13 PM   #19
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Some states have different custody laws than the feds, so you can have murky situations that are not that simple.
Only one person gets to claim the kid as a dependent for tax purposes. Seems pretty simple to me.
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Old 09-18-2009, 09:12 PM   #20
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Whom ever has legal custody would be liable for the charge. If there's joint custody then they pay equally. Seems simple enough. If you don't buy health ins. or pay the fine then it gets treated just like not paying your taxes.

Ok I'm a little confused here. I hear you saying you think that it is moral, rational and legal under the constitution of the United States for the federal government to mandate and force an individual to buy health insurance (from a Private insurance company that is making huge bribes/ political contributions to the people who wrote the law) and if that person refuses or is unwilling to do so then the Government has the right to garnish their wages, seize their home, arrest and imprison that person. This also means that the government has the right and in fact is mandated to use what ever violence is necessary up killing that citizen if they do not comply. These forms of force are used against citizens to enforce tax law. Please stop and think about this for a minute. Do you want your children to grow up under a government that has that level of control over their lives. If the answer is yes. Allow me to suggest Cuba as a w**kers/ retirees paradise. They really do have universal health care and a wonderful climate.

Would some one put their finger on the section of the constitution that gives that power to the Federal Government and point it out to me. I keep a copy around and you can get one for $1 from the cato institute. I can't find anything any where that remotely gives that power to the Feds.

Frankly I am terrified at the lack of common sense, knowledge of history and ignorance of our cultural history as a free people that the voters of this country show.
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