Health Savings Plans (HSAs) Start to Falter

[ziggy29]

That's a benevolent interpretation. The flip side is that by increasing out-of-pocket liability for subscribers, there may be decreased utilization overall, not all of which is cosmetic or frivolous care.

True. But this is also why HSA-eligible HDHP plans can (and often do) pay for regular preventative checkups 100% with no deductible. In fact, this exception was explicity written into the law authorizing HSAs, as I remember it, so regular annual exams were always covered with nothing out of pocket. Even Congress is occasionally smart enough to realize that you don't want to discourage preventative care.

Our employer doesn't have a pure HSA yet. They do have high-deductible plans with an HCA, which is a partial use-it-or-lose-it account and doesn;t follow you like an HSA if you terminate). Basically, we have a $1500 individual/$3000 family deductible, and the company funds up to $2000 a year into the HCA to cover what would otherwise be out-of-pocket costs. The account can never contain more than $3000 (the total family deductible). Our plan also pays for regular annual exams 100% regardless of whether the deductible has been met.

It's not an MSA, either, where you have to file claims to get reimbursed. It's all handled by BCBS -- they have the money in the HCA, and when a claim comes in, before the deductible is met they pay the provider from the balance of the HCA. So it's not as good as an HSA, but far, far better than an MSA.

I like the concept but I wish it would be converted into a true HSA. I'd like to see the $3000 cap eliminated, I'd like the account to come with me if I leave my job and I'd like to be able to pay the prescription co-pays with it. But all in all, it's a step in the right direction. But the main thing is that people need to be educated in being good health care consumers. They were shielded from pricing for so long that old habits die hard.

 

[teejayevans]

The biggest problem with HSAs is the low returns and high fees.
As an investment, they suck, so if you don't use the money in
the year you put the money away, the rising costs of medical
care easily out paces the growth of your HSA.
With interest rate of about 3% and monthly fees of about $4,
they barely keep up with the normal inflation rate, let alone
the inflation rate of medical costs.
TJ

 

[TromboneAl]

In New York State it is currently against the law for individuals to have a high deductible health plan with an HSA.

What is the rationale for that?

The biggest problem with HSAs is the low returns and high fees.
As an investment, they suck, so if you don't use the money in
the year you put the money away, the rising costs of medical
care easily out paces the growth of your HSA.
With interest rate of about 3% and monthly fees of about $4,
they barely keep up with the normal inflation rate, let alone
the inflation rate of medical costs.

TJ, you don't have to keep the money in a low-interest account. My HSA funds are in the Vanguard Total International Stock Market fund, and I only pay a small expense ratio "surcharge." Search for my posts on this.

 

[Gumby]

What is the rationale for that?

Possibly, the state doesn't believe that people will set enough money aside to pay the deductible and doesn't want to be burdened with a bunch of people who are, in effect, uninsured for amounts less than the deductible.

 

[mykidslovedogs]

If you are young and if you are healthy, and have the money to fund the account they can be very very good choices.

Another real world problem is that people who are opening HSAs often are not funding them unless the funding is coming from their employer.

I agree that an HSA may not be the best solution for people who have very low tax liability (new, innovative, products are now beginning to arise that offer similar benefits as an HSA, LOW premiums, 100% coverage for preventive care, AND a prescription drug card for people who can't benefit from the tax savings of an HSA - Humana's new Monogram plan is an example), but I like the fact that HSAs have become a CHOICE for many people.

HSAs DO have a positive effect on preventing over-utilization, and over the long run, this will help flatten inflation. I know you don't believe that Americans over-utilize, but it does happen, and consumerism, IMO, will make a difference in hindering the rising costs of coverage.

A lot of you have been making cracks about the colonoscopy analagy, but I've a funny story to tell you. Last week, I was talking to one of my clients, and do you know what he said to me? He said, "Since I'm going to meet my deductible this year, I think I'll go ahead and get a colonoscopy." (BTW - he's fairly young and has not been recommended to have one). It was all I could do not to crack up. I said, "Are you sure you really want to do that?", and he said "Hey, if I'm going to pay this much for my coverage, I'm going to get my money's worth". Believe it or not, I think there's more people out there who have this kind of mentality than you think there are. Many people think they have to use an equal dollar amount of services as they pay in premiums to get the full value out of their coverage. They don't realize that doing that only exacerbates inflation problems.

 

[Martha]

HSAs DO have a positive effect on preventing over-utilization, and over the long run, this will help flatten inflation. I know you don't believe that Americans over-utilize, but it does happen, and consumerism, IMO, will make a difference in hindering the rising costs of coverage.

I know that there are those who over utilize our health care system. I once had a staff member who would take her child to the doctor or emergency room for every little sniffle, begging for antibiotics. But, there clearly are those who under utilize health care. Those who don't fill their prescriptions because of the cost. That is, after all, part of the reason a prescription drug plan was added to Medicare. And there are those who don't go see the doctor as soon as they should when something is amiss.

HSA's may very well help with over-utilizers. However, they can be a negative for those with chronic illnesses. Those with chronic illnesses use a large portion of the health care dollar we spend in the US. There have even been some employers, in the interests of keeping employees healthy, that have reduced or even eliminated copays on drugs for chronic illnesses.

 

[TromboneAl]

"Since I'm going to meet my deductible this year, I think I'll go ahead and get a colonoscopy." (BTW - he's fairly young and has not been recommended to have one). It was all I could do not to crack up. I said, "Are you sure you really want to do that?", and he said "Hey, if I'm going to pay this much for my coverage, I'm going to get my money's worth".

This is exactly what I will be doing this year, but I guess the difference is that at age 53 a colonoscopy is recommended. If I have it next year, it will cost $1,000, but it's free if I have it this year. IOW, the insurance company is having a "Free colonoscopy with every hernia repair" sale, so I'll take advantage of it.

 

[mykidslovedogs]

HSA's may very well help with over-utilizers. However, they can be a negative for those with chronic illnesses. Those with chronic illnesses use a large portion of the health care dollar we spend in the US. There have even been some employers, in the interests of keeping employees healthy, that have reduced or even eliminated copays on drugs for chronic illnesses.

Martha, I guess my point is that if we can get at ONE of the major root causes of health insurance inflation, OVERUTILIZATION, then, health insurance inflation rates will eventually FLATTEN for EVERYONE, and we will all still have CHOICES.

On the other hand, if we force EVERYONE onto something like a Kaiser HMO, with little or no copays for everyday services, so that no-one has to go without care, we do nothing to hinder the run-away inflation.