stephenandrew
Recycles dryer sheets
- Joined
- May 5, 2007
- Messages
- 148
There was an article posted on the WSJ's editorial web page a day or so ago--it was titled "The End of HSAs". Someone referenced the editorial on another finanical fourm, and there was some rather heated arguments going on about HSAs--why they work, don't work, how the cost too much, how they are the best buys in insurance, etc. Some of the debate was sensible, reasonable---some not so much.
There were several arguments made that HDHPs/HSAs only made sense if you were young and/or healthy---and as I understand it, that is one of the arguments some folks in Congress make against them--they siphon off the low risk people, and leave higher risk people in a single pool, pushing their costs higher. My own thoughts are, if this were true, that this would be an issue---to me, part of what makes insurance work is that we pool our risk. But what I think is interesting is that in my limitted experience, my company's HDHP/HSA seems to be cheaper than the traditional BC/BS plan offered--regardless of how old, sick, or healthy you are.
In my case if you compare the annual cost of the BC/BS premiums to:
the annual cost of the HDHP premiums
+ the $3000 annual deductible for the HDHP
- the annual amount my employer contributes to the HSA
the HDHP costs less than the BC/BS plan. I would add that once the HDHP coverage kicks in, the copays are actually a bit lower than what we would pay under BC/BS.
Now I realize that all of these plans are a bit different form one another, so my numbers may not be typical, but I suspect they are not unusual. All this leads me to conclude that the reason many folks don't sign up for HDHPs has more to do with cash flow---a lot of folks just don't have the liquidity to be able to abosrb the first $3000 in medical expenses. In my view its is like buying a car over time vs. paying cash (lower payments but higher total cost). The HDHP is like paying cash (lower total cost), and the BC/BS plan is like financing--higher total costs but less cash needed upfront.
Thoughts? Thanks.
There were several arguments made that HDHPs/HSAs only made sense if you were young and/or healthy---and as I understand it, that is one of the arguments some folks in Congress make against them--they siphon off the low risk people, and leave higher risk people in a single pool, pushing their costs higher. My own thoughts are, if this were true, that this would be an issue---to me, part of what makes insurance work is that we pool our risk. But what I think is interesting is that in my limitted experience, my company's HDHP/HSA seems to be cheaper than the traditional BC/BS plan offered--regardless of how old, sick, or healthy you are.
In my case if you compare the annual cost of the BC/BS premiums to:
the annual cost of the HDHP premiums
+ the $3000 annual deductible for the HDHP
- the annual amount my employer contributes to the HSA
the HDHP costs less than the BC/BS plan. I would add that once the HDHP coverage kicks in, the copays are actually a bit lower than what we would pay under BC/BS.
Now I realize that all of these plans are a bit different form one another, so my numbers may not be typical, but I suspect they are not unusual. All this leads me to conclude that the reason many folks don't sign up for HDHPs has more to do with cash flow---a lot of folks just don't have the liquidity to be able to abosrb the first $3000 in medical expenses. In my view its is like buying a car over time vs. paying cash (lower payments but higher total cost). The HDHP is like paying cash (lower total cost), and the BC/BS plan is like financing--higher total costs but less cash needed upfront.
Thoughts? Thanks.