Credit record, blood pressure, and health insurance

[Martha]

From the US treasury:

What happens to the money in a Health Savings Account after you turn age 65?
You can continue to use your account tax-free for out-of-pocket health expenses. When you enroll in Medicare, you can use your account to pay Medicare premiums, deductibles, copays, and coinsurance under any part of Medicare. If you have retiree health benefits through your former employer, you can also use your account to pay for your share of retiree medical insurance premiums. The one expense you cannot use your account for is to purchase a Medicare supplemental insurance or “Medigap” policy.

Once you turn age 65, you can also use your account to pay for things other than medical expenses. If used for other expenses, the amount withdrawn will be taxable as income but will not be subject to any other penalties. Individuals under age 65 who use their accounts for non-medical expenses must pay income tax and a 10% penalty on the amount withdrawn.


http://www.treas.gov/offices/public-...ng.shtml#hsa13

[wabmester]

Thanks, Martha. Not quite the free lunch I was hoping for, but better than a sharp stick in the eye.

[wabmester]

Just one more note on overfunding an HSA. If you die, your HSA either becomes your spouse's HSA or it gets distributed to your estate or whomever you named as a death beneficiary.

In the latter cases, the estate/beneficiary gets hit with the full value as ordinary income. No step-up in basis! At least, that's my reading.

[Martha]

Yup, the money is going to get taxed. No step up with traditional IRAs or 401ks either, though at least you can work it so you don't have to pay the tax all at once. No step up on untaxed interest on bonds or untaxed dividends on stock or on untaxed wages you might have earned .

Only unrealized capital gains.

[wabmester]

Originally Posted by Martha

Yup, the money is going to get taxed. No step up with traditional IRAs or 401ks either, though at least you can work it so you don't have to pay the tax all at once.

But with traditional IRAs, the contributions are tax-deductible, so you are effectively getting taxed twice on contributions to an HSA not used for medical expenses.

[kramer]

MKLD, thanks for the links That is great news about over the counter drugs to treat illness, I thought that not allowing that was a bit strange.

Originally Posted by wab

Thanks, Martha. Not quite the free lunch I was hoping for, but better than a sharp stick in the eye.

Yeah, I think it is great. This means that you could use it to pay Medicare part B premiums and various medicare deductibles and co-pays. Those are going to get much more expensive over time. So even if you are very healthy, there should be plenty of opportunites to spend the HSA pot, and the money will never be taxed unless you die ahead of schedule without a spouse.

Kramer

[kramer]

Originally Posted by wab

But with traditional IRAs, the contributions are tax-deductible, so you are effectively getting taxed twice on contributions to an HSA not used for medical expenses.

Your original HSA contributions were tax deductible, just like a Traditional IRA. So, according to my understanding, the most you would ever get taxed on that money is once: 1) if you die without a spouse and it gets distributed as ordinary income and 2) if you use the money for non-medical expenses. There is also a 10% penalty if you use for non-medical expenses before age 65, in addition to the tax.

Kramer

[Martha]

Originally Posted by wab

But with traditional IRAs, the contributions are tax-deductible, so you are effectively getting taxed twice on contributions to an HSA not used for medical expenses.

But if your employer contributes to an HSA, you don't pay a tax. If you contribute, you get an above the line deduction.

[wabmester]

Originally Posted by Martha

If you contribute, you get an above the line deduction.

You would think that I should remember something like that right after doing my taxes, wouldn't you? Mea culpa. CRS setting in.

[kramer]

Another question: I may actually be a "resident" overseas for a couple years out of the next five years. But my policy will be for my stateside location in Southern California. I would only expect to get insured treatment in California. Will my temporary non-residency in Southern California present a problem for an ordinary insurance policy? I promise not to tell the insurance company I am gone and my mailing address would remain the same. Basically, I am hoping not to need a specialized policy so as to keep costs down.

While I am working overseas, I will typically be automatically enrolled in the local health insurance system for a nominal monthly premium. And I could use travel insurance for the gaps, if I want to remain fully insured overseas. And, of course, I assume that this does not violate the HSA rule against having separate insurance to cover your deductible, since my "other" insurances would be for overseas only and not apply toward my HSA-deductible.

Here was an anonymous internet quote from BCBS. I would prefer a carrier that is in a few states, especially Arizona, so that I might have the possibility of moving in the future without going through underwriting again:

Plan Features
Plan Type: HSA
Physician Choice: You choose specialist(s)
Monthly Premium: $106.00
Annual Out-of-Pocket Maximum (includes deductible): $5,000/single, $10,000/family
Annual Deductible: $3,500/single, $7,000/family
Office Visits: After deductible 0% of negotiated fee
Professional Services: After deductible 0% of negotiated fee
Hospital Inpatient/Outpatient: After deductible 0% of negotiated fee
Emergency Services: After deductible $100 copay plus 0% of negotiated fee. $100 copay for each visit - waived if admitted.
Maternity: Not covered
Preventive Care - General: After deductible 0% of negotiated fee
Drug Benefits: $10 copay generic formulary (each 30-day supply); $30 copay brand formulary name (each 30-day supply) after combined deductible. Self-administered injectable drugs, except insulin, 30% of the negotiated fee. 50% Co-Insurance for Non-Formulary drugs.
HSA Compatible: Yes
Optometrist Benefit: Optometrists network has been created for BC Life so insureds will have a participating provider network to choose from for medical services.
Preservice Review: Preservice review will be required for all inpatient hospital stays and certain diagnostic and radiological procedures.
Specialty Pharmacy Drug Benefit: Certain drugs will be obtainable only through Precision Rx Specialty Solutions.

If I can snag coverage this inexpensively from a major provider, I will be very, very happy.

Kramer (male, age 41)

[mykidslovedogs]

Blue Cross is excellent for people who travel a lot, because they have networks all over the USA and even a few worldwide providers.

However, they (BCBS) are not good if you move. In my experience they have the worst portability of coverage from State to State, and typically, you have to go through re-underwriting if you move. I think that is because the various Blue Cross Carriers operate as separate entities from state to state. For example Anthem Blue Cross and Blue Shild of Colorado operates independently of Blue Cross of Arizona, and a Colorado policy is not portable from Colorado to Arizona.

Policies that have good state to state portability include Golden Rule, Humana (however, I don't think Humana sells individual coverage in CA), and Celtic Insurance.

[kramer]

Originally Posted by mykidslovedogs

Blue Cross is excellent for people who travel a lot, because they have networks all over the USA and even a few worldwide providers.

However, they (BCBS) are not good if you move. In my experience they have the worst portability of coverage from State to State, and typically, you have to go through re-underwriting if you move. I think that is because the various Blue Cross Carriers operate as separate entities from state to state. For example Anthem Blue Cross and Blue Shild of Colorado operates independently of Blue Cross of Arizona, and a Colorado policy is not portable from Colorado to Arizona.

Policies that have good state to state portability include Golden Rule, Humana (however, I don't think Humana sells individual coverage in CA), and Celtic Insurance.

MKLD, Wow, that is great info, especially about BCBS. Thanks very much. That is a good example of how an insurance broker really helps.

Yes, I don't like this idea of being a potential prisoner of the state I am currently residing in -- maybe in five years, when I am more settled, this won't be a problem for me. I went to Golden Rule's web site and they do not appear to sell personal health insurance in California. Celtic does sell it, but they do not appear to sell any HSA-eligible policies here, which is all that I am considering. Interestingly, Celtic does not show up at ehealthinsurance.com for my Southern California zip code.

According to my ehealthinsurance.com searches, the companies that offer HSA plans where I will be residing: Aetna, Blue Cross of CA, Blue Shield of CA, Health Net, Assurant, PacificCare, and Kaiser.

I know that Kaiser (my current provider in Northern California) is very regional, so I have not been considering them, even though they are well established where I am moving to in Southern California. I might have to reconsider.

I ordered "The New Health Insurance Solution" book by Pilzer. So I hope that will help me learn more. I am sure I will have more questions after that I ordered my health records from Kaiser this week (takes 2 to 3 weeks, they charge 25 cents per page).

I plan to give notice in late March, so that is driving my timeline. I am still a bit nervous about this credit record thing, as I found out today that it may be another 60-90 days before the credit problem shows up as being paid in my record. Although it makes me feel better what you said about health insurance carriers not caring much about this, it still makes me nervous, perhaps because I am a perfectionist

Martha wrote:
I trust that Kramer, given his good health, will find a reasonably priced HSA policy. I am interested in how the process goes as well.

I actually have a couple of dings in the last couple of years. But they were minor things (at least that is how I perceive them) that were treated with a single visit to the doctor (1--elbow bursa inflamed (bursitis) due to leaning on it while at desk all the time, 2--minor surface skin lesion frozen off). No reoccurence of either minor problem for more than one year. But those issues, combined with the previously elevated blood pressure, might make me more borderline for premium pricing. I took a real gamble getting my physical but it really paid off with the lower BP readings and low cholestorol/blood-sugar.

Kramer

[mykidslovedogs]

Kramer,

Try Time Insurance/Assurant Health. www.assuranthealth.com. They have good portability too. Theyuse the PHCS network. With Assurant Health, they will probably exclude coverage for the skin lesions (future ones), especially if they were pre-cancerous, and if they were dysplastic nevi, they might even exclude malignant melanoma from coverage. Whenever Assurant Health puts an exclusion rider on a policy, they automatically disqualify you for preferred rates, so hopefully that won't be the case on this situation. I guess it all depends on what type of spots they were. The elbow is no big deal, and I doubt there will be any problem with underwriting on that.

MKLD

[kramer]

Originally Posted by mykidslovedogs

Kramer,

Try Time Insurance/Assurant Health. www.assuranthealth.com. They have good portability too. Theyuse the PHCS network. With Assurant Health, they will probably exclude coverage for the skin lesions (future ones), especially if they were pre-cancerous, and if they were dysplastic nevi, they might even exclude malignant melanoma from coverage. Whenever Assurant Health puts an exclusion rider on a policy, they automatically disqualify you for preferred rates, so hopefully that won't be the case on this situation. I guess it all depends on what type of spots they were. The elbow is no big deal, and I doubt there will be any problem with underwriting on that.

MKLD

Thanks, MKLD. I did a quick quote from their web site, and they were definitely competitive on (preferred) rates. I can see that the ehealthinsurance site just gives you a general idea, but one really needs to go to the individual sites to get a more detailed quote and information. I will probably end up going with a $5,000 deductible type HSA policy.

Supposedly, the skin lesion was nothing, no biopsy required, no follow up treatment, etc. It was tiny and strictly a cosmetic issue -- the main reason I went in was just to make sure it was nothing serious and the doctor confirmed that. But that is one reason that I ordered my medical records, so I can see exactly what they wrote down. I can see how important it is to manage how things get recorded!

I just saw a dermatologist because I have some freckles and I pointed out a few to my primary care and he said he didn't know much about them and so referred me to the dermatologist. The dermatologist looked at my chest for about four seconds with a magnifying glass and told me that I am fine with no more risk than anyone else and probably even less.

Kramer

[mykidslovedogs]

I had a client once who had a freckle removed from her nose and the doctor coded it as a basal cell skin cancer so that insurance would pay for it, even though it was benign. The doctor claims he had no other "rule out codes" to use. After that, it took almost 6 months to straighten out her medical records so we could get her covered. Part of the problem with the delay was, due to what was cited as HIPAA (or what I call the anti-customer service law), the insurance carrier could not tell us which doctor filed a cancer claim against the patient. It was kind of a guessing game, until we finally figured it out, and then the client went to her doctor and had him right a letter to correct the problem.