27 ms·

Employees Start to Feel the Squeeze of High-Deductible Health Plans

166 points by js2 8y ago

LarryDarrell 8y ago
If you were designing a society starting from scratch today and said, "I think we should make having health insurance largely dependent on having an employer.", you would be laughed out of the room. I think we are running along some tracks that were laid long ago, and rather than all jumping off, some people in comfy Pullman cars are content with letting the train run off a cliff.
- pnutjam 8y ago
  to be fair, they think there are wings on their pullman cars. There aren't, but still...
- delecti 8y ago
  I happen to agree that the system is broken and getting worse, but that's not necessarily a good metric for whether you should change any given system now.
- WrtCdEvrydy 8y ago
  Individualism in America is the main cause... if you just got taxed and didn't have to worry about healthcare, people wouldn't care, but they all think that it could never happen to them.
  - deleted 8y ago
    [deleted]
  - CarriersSuck 8y ago
    Americans think the poor are slackers and they don't deserve anything. Even poor Americans think the "other" poor are slackers and don't deserve anything. Nothing will change until you change this mindset.
    - weberc2 8y ago
      This is a pretty bold statement. How many Americans do you know?
      - CarriersSuck 8y ago
        I've lived in the US all my life, so quite a few.
- briffle 8y ago
  I find it odd that some executive gets to pick which 401k and health insurance plans you get, and that you must pick from their few choices that allow you to have. I can see why the providers love it, they can target all their advertising, marketing, etc, at a few key people at large employers, but not sure how that benefits the average worker..
  - SlowRobotAhead 8y ago
    You can get an individual 401K or IRA and make all your own choices. If you're talking about an employer matched 401K, I don't think it's unreasonable at all for them to select it.
    - jogjayr 8y ago
      > If you're talking about an employer matched 401K, I don't think it's unreasonable at all for them to select it. What's special about 401k matching that requires the employer to choose plans? My employer doesn't force me to have a checking account with a particular bank they chose if I want to receive my salary. They should be able to match contributions to any account anywhere.
      - SlowRobotAhead 8y ago
        I don’t know if you understand how 401K matching works on the backend. A lot of times the employers are capped on their own plans at a percentage rate that matches their employee’s participating. So matching is often in their best interest, esp at smaller companies. But, easier version is this is a perk, not your base salary. They are paying you with legal tender and there are freedoms associated to that. There is no such thing for perks. You aren’t entitled to make the administration choices for something they are gifting you.
        jogjayr 8y ago
        > I don’t know if you understand how 401K matching works on the backend. A lot of times the employers are capped on their own plans at a percentage rate that matches their employee’s participating. I actually do not understand this. Could you please explain more? What does an employer being "capped on their own plans" mean? > But, easier version is this is a perk, not your base salary When I make a decision on a job offer, the 401k match, health insurance premium, free lunch and snacks etc. all factor in and they're all worth a certain amount of money. Money is money and how it's labeled, "perk" or "base", is irrelevant. If my employer ends 401k matching, I'll treat it as a pay cut mentally. My ultimate "fantasy" is to eliminate 401k altogether and instead let everyone contribute whatever the 401k annual limit is to an IRA. The employer can simply add matching funds to your IRA and you're free to have your retirement accounts anywhere you please.
- justinmchase 8y ago
  If you're designing a society from scratch and you end up with employers, insurance or money at all, then you probably are doing it wrong, lol
- snowwrestler 8y ago
  If I was designing a society from scratch, I don't think I would create "insurance" that is expected to pay for almost every routine, non-emergency, completely predictable cost just because it's a medical cost. The employer-provided system--which arose out of WWII-era wage controls, for those who don't know--has not only created the "have/have not" dichotomy in U.S. healthcare, it has also warped expectations about what "insurance" is supposed to cover--and broken normal pricing mechanisms.
- clarkmoody 8y ago
  Employer-provided healthcare is an aberration created by government interference in the market. > Employer-provided health insurance has its origin in a tax policy passed in 1943, which made insurance provided by employers tax free. At the time the United States was engaged in World War II and had enacted wage and price controls, preventing employers from competing for scarce labor using the normal mechanism of offering a higher salary. Instead, businesses used the availability of newly tax-subsidized healthcare as a means of differentiating themselves. > The tax advantages were made even more attractive and fully codified in the 1954 Internal Revenue Code. Over the next few decades, the government's subsidization of employer-provided health insurance lead to the dominance of that model of healthcare delivery...[1] So steps that got us here: 1. Enter into WWII 2. Enact price & wage controls 3. Create tax loophole for employer-provided plans 4. Enshrine loophole into the tax code These are not market phenomena, since government intervention got us here. [1] https://mises.org/library/whats-really-wrong-healthcare-industry https://mises.org/library/whats-really-wrong-healthcare-indu...
  - heylook 8y ago
    Who cares? GP didn't say anything about "market" or "not-market". It's dumb that we're here. Full stop.
    - lordlimecat 8y ago
      It's dumb that we're here, but knowing the history suggests a possible solution. What if the government was able to pass legislation banning employer healthcare? I imagine the issue of healthcare coverage would resolve very shortly thereafter.
mrosett 8y ago
You can argue that the ACA improved the healthcare system overall. But it's been tough for people who were already covered by employer insurance. I think people fail to appreciate that prior to the ACA, when the healthcare system worked, it actually worked really well. I got very sick at the age of 20 while I was still on my parents very modest insurance (pre-ACA). Within 48 hours I had an appointment at the best oncology hospital within 500 miles, and I was able to get scans, tests, etc on a very short turnarounds. Ultimately I had two major surgeries in 4 months, and the whole thing probably cost the insurance company a couple hundred thousand dollars. Since my parents had already hit their out-of-pocket maximum, the marginal cost to us was 0. Now, the "when it worked" caveat is a big one. The story would be very different if my parents didn't have insurance at all or if I hadn't been eligible to be on it. But the same story today on my insurance would cost me a lot more money out of pocket due to a much higher deductible and a higher out-of-pocket maximum. My perspective is that the ACA made things significantly better for a small group and modestly worse for most people. I'm open to moral arguments that the tradeoff was worth it (although that's not what I believe.) But I dislike rhetoric that pretends there's no tradeoff at all. Edit: Added substance to a one-liner.
- duxup 8y ago
  How so? The choice of covering crappy plans is the employer's choice... and crappy plans are what have been pushed AFTER the ACA was passed. Largely by the GoP... Is that what the ACA was, or what someone(s) who want it to fail want? There's a weird narrative where any event is tied to the ACA while they ignore what the healthcare system is in the US overall.
  - mdorazio 8y ago
    The parent comment is exaggerated, but I think the point is that prior to ACA, employer-provided plans tended to be cheaper and have lower deductibles largely because insurance companies were able to drop or deny coverage whenever they felt like it for individual plans to keep their margins up. While logically true, this is roughly equivalent to hearing from an old coworker that South Africa was a great place to be white under apartheid... I think it's also worth exploring how much of the difference in financial cost of health insurance plans is due to time + annual overall increases in healthcare cost in the US. ACA was passed 9 years ago. Even under the previous 9 year annual percentage increase averages, you would expect healthcare costs to be at least 20% more expensive than they were in 2010, regardless of ACA.
tptacek 8y ago
Isn't the point of an HDHP that you're supposed to set up an HSA to go with it? Premiums for HDHPs are significantly lower than for normal health plans; the idea is that you're supposed to use the premium savings to fund the HSA, which is then money that carries over year over year, right?
- duxup 8y ago
  Generally, but I think that's a bit of a "hey people without a lot of money who can't afford more... you should save money" there. Not that they shouldn't do it, but a slight paradox there.
  - tathougies 8y ago
    The point was that the premium was lower so you could save the difference and instead of that difference going to waste each year, it could compound over time.
    - thekingofh 8y ago
      HSA is spend it or lose it.
      - hawaiianbrah 8y ago
        You’re thinking of FSAs
      - goobynight 8y ago
        Nonono. That's an FSA. You can hold on to your HSA indefinitely and withdraw for medical reimbursement at any time (decades later).
      - wyldfire 8y ago
        You're mistaken, but it's an easy mistake to make. There's an alphabet soup of FSA/LPFSA/HSA/DCFSA options. An HSA is truly your own savings account, owned by you (just like any other savings account), regardless of where contributions come from.
paxys 8y ago
High-deductible health plans were always designed to benefit employers. My company switched us to one with a big PR campaign highlighting how everything would be better (contributions to HSA - free money!). The only "advantage" is that companies have to pay smaller premiums and employees are greatly discouraged from getting care due to high costs. Funny enough, employers are rethinking this now since employees not getting basic preventive care is actually more expensive for them in the long run - https://www.insurancejournal.com/news/national/2018/06/26/493273.htm https://www.insurancejournal.com/news/national/2018/06/26/49....
- dsfyu404ed 8y ago
  If you spend a lot on healthcare (i.e. have a family) then a HSA works fine since you hit your maximums really quick and then only pay some small % of the sticker price after that. For everyone who isn't gonna spend a few grand in healthcare every year it totally sucks and is a massive incentive not to have routine care done.
  - lotsofpulp 8y ago
    That doesn’t make sense. If you spend a lot on healthcare, then why would you want to spend it out of pocket from HSA instead of letting insurer pick it up with a non HDHP?
    - dsfyu404ed 8y ago
      You only spend out of pocket until the various out of pocket limits kick in.
      - lotsofpulp 8y ago
        There is only one out of pocket limit: https://www.healthcare.gov/glossary/out-of-pocket-maximum-limit/ https://www.healthcare.gov/glossary/out-of-pocket-maximum-li... Healthcare costs whatever it costs, no matter what the premium / deductible is. The more of it that is used, the more someone has to pay, and you can be sure the insurance company is going to adjust the premiums or deductible or coinsurance/copay to make sure it's not them (in the long run). The HSA/HDHP option just lets you gamble that you won't need enough medical care in the year to offset the investment and tax gains of contributing to an HSA. And if you're lucky, you'll make it all the way to Medicare eligibility. Although I'm pretty sure we'll see Medicare start being means tested in the next decade.
goobynight 8y ago
While I am satisfied with my HDHP + HSA, I'd be a lot more worried if it were my only option (I'm only young for now) or if I didn't make/save as much. People are getting hit with HDHP only and no HSA? That's rough.
- rockinghigh 8y ago
  Anyone with an HDHP plan can get an HSA. Whether it's through your employer or through another plan provider like Fidelity or Vanguard.
  - trynewideas 8y ago
    An HSA with no employer contribution, or even administrative assistance, is like throwing money into a trash can, except at least if you throw money into a trash can, you can wheel it down to any hospital and they'll probably accept it.
    - lotsofpulp 8y ago
      What? It takes 5 minutes to open a free HSA account at Fidelity and transfer funds to it.
      - rb808 8y ago
        I didn't know they were available. I thought it could be open to everyone, but employer ones do have advantages. https://www.fidelity.com/go/hsa/why-hsa https://www.fidelity.com/go/hsa/why-hsa > You could also use it in place of an employer HSA. If you do this, you may miss out on opportunities like pre-tax payroll or employer contributions, so check with your employer to see what they offer.
        lotsofpulp 8y ago
        You can still deduct contributions from income taxes, and you can also transfer funds after contributing to your employer sponsored HSA to your individual one.
deleted 8y ago
[deleted]
rb808 8y ago
I really like the idea of high deductible plans. The idea for me is that insurance shouldn't cover regular costs that most people pay every year. Insurance should just be for unusual events, like car insurance is only used if you have an accident. So now I got a $2k bill from ER for something that wasn't really an emergency. It makes me think carefully about next time this happens where before the cost didn't really affect me. Changing people's behavior is important part of reducing costs of the health care industry. EDIT: Yes I'm not happy with how expensive prices are now. That is the problem that HD plans have.
- conorh 8y ago
  I like it too, except that my (bronze level in the marketplace) high deductible plan is ~$1300 a month for my family, that is not sustainable. A recent ER visit with 1 night stay cost us about 8k out of pocket, the family deductible for the plan is $13k a year.
  - symfoniq 8y ago
    Sounds like we are on the same plan.
  - FireBeyond 8y ago
    Be glad that "recent" wasn't in December, prior to the deductible reset. Fun fact - my company (who sells Health Benefits Management software) added functionality so an insurer could do a "rolling window" for deductible / out of pocket management, i.e. "In any given 12 month period, your costs will not exceed $x" (where given unfortunate timing, your out of pocket could actually be 2x). Except it was less profitable to the insurers, so no-one was interested. But spun as "will be too complicated for consumers".
- duxup 8y ago
  > It makes me think carefully about next time this happens where before the cost didn't really affect me. I don't think that necessarily leads to logical behavior as people are, not logical, not able to make these types of decisions knowledgeably. Also let's be clear the situations we hear about with large ER bills and large volumes of non emergencies there are people who can't pay anyway. I don't doubt the system works for you and you're a good participant, but i don't know if it works for a society as a whole.
anonKeepMyJob 8y ago
One of our company's primary products "helps employees make an informed decision when choosing their health insurance plan". Basically, during open enrollment they are presented with their choices of plans and the "expected total cost" of each plan over the course of the year as calculate based on either, if we have their consent, their historic data or, if we don't have their consent, the historic data of a representative cohort. The product wasn't getting traction based on employer's wanting to provide such a service to their employees, so the sales pitch was changed. The sales pitch became, "You can save your company money by moving your employees to High Deductible Health Plans. Our product presents data that encourages employees to choose HDHPs over other plans." I'm not sure if that is currently the sales pitch, but it was the primary one for two-ish years. Our customer base is now non-trivial. I've overheard some of the conversations as to how the "representative cohort" is determined and about our data sources. It wouldn't pass a peer review. Additionally, in the past we have re-worked the numbers because our customer didn't like the results. That is, feedback from the company, not the company's employees. They did, after all, hire us to get their employees to move to a HDHP. And to top it off, the product hasn't been a great revenue source. So we're effectively compromising real people's health care coverage, for our company's business interests, and it hasn't even been that profitable. Our health insurance plan at this company is a HDHP...
- anonKeepMyJob 8y ago
  I tell you all that my company works with employers to move their employees to HDHPs based on sketchy data, sketchy calculations, no transparency, and based on profit motive, and,,,, nothing. Interesting. Side note: The chances that some HN readers have used our software are, very good.
angel_j 8y ago
Insurance is not suited for health care. It's suited for emergencies. Sometimes health care is that, although preferably not often, and less often if proper care is given when due. But general health care—the practice of keeping people healthy, rather than fixing them when ill—is not suited to the insurance model, and the insurance industry is too powerful to let control who gets which treatment. A proper model pays the actual healthcare provider to keep you healthy on the regular, and then it costs you nothing in the event of sickness or emergency (like you need more stress at that moment). The very idea of mutual indemnity is out the window with modern insurance, it's all about squeezing stats for margins, at which point there is not real mutuality, only competing risk profiles. Of course, a group of people might want to pool for emergencies, or even general health, but is there any benefit to the current scale of insurers? It only makes them more powerful.
- rjohnk 8y ago
  I wholeheartedly agree. That and employer-based access to health insurance. Imagine if you had to change auto/life/home/rental insurance every time you changed jobs.
jdoliner 8y ago
I've been trying for a while to figure out what would be a good metric to judge the ACA by. Most of the time it's success is talked about in terms of number of people insured, but that doesn't really capture how well insured they are. Life expectancy seems to be the only well known (at least to me) stat that begins to capture the health of the nation. We've now had 3 straight years of declining life expectancy in the US [0], a single year is virtually unheard of in developed nations. Now there are lots of confounding variables, and it's certainly not possible to say the ACA is the cause. And 3 years of downward trend, isn't historically unprecedented. However, it certainly makes it hard to paint the ACA as a success, I'd want to see some compelling evidence that the ACA had made America healthier, which doesn't exist right now. The question to me is how long we can accept a downward life expectancy trend before we start looking at the ACA as a potential cause. [0] https://www.smithsonianmag.com/smart-news/us-life-expectancy-drops-third-year-row-reflecting-rising-drug-overdose-suicide-rates-180970942/ https://www.smithsonianmag.com/smart-news/us-life-expectancy...
- stronglikedan 8y ago
  A good metric is - did it do what it was designed to do? I think the answer is yes. It was designed to be an unsustainable failure, in order to trick people into thinking single-payer was the next best thing. In that regard, it has been a resounding success.
- LarryDarrell 8y ago
  I hate on the ACA as much as the next guy, but the article you linked blames drug overdoses and suicides. For that I would blame the for-profit health care system pushing opioids and the (Great Recession + inadequacy of our mental health care system). To blame that on a law that sought to eliminate preexisting conditions and to establish a baseline as to what a health insurance plan ought to provide seems like a stretch. Having a free yearly physical isn't going to help your crushing depression and economic anxieties.
  - jdoliner 8y ago
    I was just linking that as a reference for the declining life expectancy. I don't think they even come close to establishing opioid and suicide deaths as the cause, that's just journalistic conjecture. If you look at the number of opioid and suicide related deaths it's very small compared to the total population of the US, so the math just doesn't seem to work out for me. I remember an HN comment a while ago that worked out how many deaths you'd need from those causes to lower the life expectancy as much as we're seeing and it was a lot higher than what we're seeing now. Unfortunately I can't seem to unearth the comment.
kxyvr 8y ago
For those of us who are self-employed, I'll mention that low or no deductible health plans may provide better value. When they sort of work, health deductible health plans are nice because: (1) monthly premiums are low and (2) they give access to a health savings account (HSA) where some amount of money can be stored pre-tax and then used for health related expenses. Of course, none of this saves someone that gets hammered with a $5000 bill like those in the article. Anyway, the pre-tax HSA account seems to be an attractive to many, and it may be benefit some. However, if you're self-employed, you can deduct your premiums off your income through the self-employed health insurance deduction: https://www.irs.gov/taxtopics/tc502 https://www.irs.gov/taxtopics/tc502 This means that there may be higher tax benefit for a high-premium, but low or no-deductible plan. Personally, I find it much easier to handle than going through the trouble of an HSA. All that said, it's pretty much all the same in a catastrophic case. Just take the premiums x 12 + out-of-pocket max to figure out the "maximum" yearly liability. At least on the ACA exchanges, this number is typically $11-15k on what I've seen from either high or low-deductible plans. If you can't make this number, you're not fully covered for catastrophic. Alternatively, if the hospital sends a bill to an out-of-network operator, you're probably screwed as well. Anyway, this is not to detract from the article. This is a huge problem. Mostly, I wanted to pass on some information that I had to sort through when picking and choosing plans over the years.
- lotsofpulp 8y ago
  The tax savings on the difference in premium between high deductible health plans and low deductible health plans is probably $2k at most ($6k in extra premiums @30% tax rate). That’s for single coverage, but even for family total year tax savings can’t be more than $5k. In either case, triple tax advantage of HSA is far more, especially due to compound growth. If you have the cash to be able to deal with $10k of medical expenses in an emergency, HDHP + HSA is a no brainer
  - kxyvr 8y ago
    This is not to say that you're wrong, but I don't completely understand your numbers. My understanding of the triple-tax advantage of HSAs are that 1. Money going into the HSA is pre-tax 2. Investment gains from the HSA are not taxed 3. Money used from the HSA for qualifying health expenses is not taxed That said, there are many restrictions and two of these benefits seem to be included for self-employed individuals. For example, an HSA can not be used for over the counter drugs unless there's a prescription: https://www.irs.gov/newsroom/affordable-care-act-questions-and-answers-on-over-the-counter-medicines-and-drugs https://www.irs.gov/newsroom/affordable-care-act-questions-a... However, prescriptions can already be deducted without an HSA if one is itemizing: https://www.irs.gov/taxtopics/tc502 https://www.irs.gov/taxtopics/tc502 Alternatively, the above link also states that things like office visits to a physician can be deducted, which are things normally an HSA are used for. Basically, the one benefit that seems unique to an HSA is that the investment gains from the money in the account are not taxed, which is great assuming that this money is used for medical expenses or you make it to 65. Again, I'm not saying you're incorrect, but it looks like self-employed individuals automatically benefit from 1 and 3 above, assuming itemization. As such, it's seems like the trade off is whether the higher premium, which is less high due to the tax write-off, is worth lower the lower cost of a physician visit. Assuming, of course, we haven't gone catastrophic. What am I missing?
jkaljundi 8y ago
NET::ERR_CERT_DATE_INVALID - it's interesting as it's May 3rd and the cert seems valid until May 3rd as well?
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etchalon 8y ago
At Mess (my agency), we were sort of forced into going with a HDCP, but we found a way for it to be a win for everyone. Our absolutely-perfect no-deductible no-coinsurance plan was retired, and every year, for five years, the cost of our reasonable-deductible no-coinsurance plan kept going up. Eventually, our broker convinced us that HDCP was the only way. But I absolutely hated it. We have quite a few employees with chronic, expensive conditions. Moving a HDCP (in our case 2K/6K family), effectively meant we were cutting their salaries. They were absolutely going to be paying that deductible. We also employ a LOT of younger people, who just don't go to the doctor more than once a year, maybe. The HDCP wasn't that big a deal for them. We looked into HSAs – the thing our broker recommended. These are garbage. In theory, we'd put in some amount of money each month, and eventually, over time, the entire premium would be sitting in an account for the employee. For the young and healthy, this was free money. The move to HCDP+HSA was basically a raise for them. For the chronically-ill, the rate we'd contribute to their HSA was never going to be fast enough to keep pace with their expenses. And for most people, with most savings levels (near $0), a $1500 bill you'll "eventually get back" is just as unaffordable as one they'd never get bet. I hate HSAs. "Look, we know most of our folks are NEVER going to hit their deductible. We know a few folks will. Can't we just give everyone a credit card with a 2K limit that they can use to pay for stuff?" Meet HRAs. HRAs are like HSAs, but they're not incrementally funded. Instead, it's basically a credit card whose balance I, the employer, pay. It has an annual limit, which matches each employees annual deductible. These things are amazing. 1. The employee never has to worry about out of pocket cost. They go to the doctor, the doctor charges their HRA. 2. The company has MUCH lower premiums, because we're on an HCDP. I think we saved like 30% or something moving to it. 3. We have a maximum annual additional cost each employee can ring up in medical costs. Worst case scenario (every employee hitting their deductible) isn't fantastic, but we can plan for it. 4. The normal-case scenario is a that a handful of employees hit their deductible very quickly at the beginning of the year, and the rest barely use their HRA at all. I do not understand why more companies don't do HRAs given the above.
- trynewideas 8y ago
  Taxes. HRAs can be a huge headache for employees (never employers). SEHRAs also have a bad reputation for being the worst of both HSA and more traditional insurance plans: underfunded, high overhead for employees, all for severely limited provider choice. ICHRAs (individual-coverage) are the real bridge between HSAs and traditional insurance—you can use them as an HRA-style account _or_ use the money to buy an insurance plan off a marketplace. While it still pushes the burden of choosing and managing health care onto the employee, they at least have flexibility in coverage as well as tax benefits for both employees and employers. They, uh, also don't exist until 1 Jan 2020, and they give total control to the employer. If you're a good employer, that's great. If you're a shitty one, the employee is easily fucked over.
irrational 8y ago
I have a HDHP with an HSA. When my company first rolled it out I barely gave it a glance (why would anyone want a high deductible?) and stayed on the low deductible plan. However, the next year I looked at it closer. I ran the numbers and realized that I could have x dollars come out of my paycheck to the insurance company under the low deductible plan, or I could have y dollars go to the insurance company and z dollars go into my HSA. And y + z = x (within a $100 or so). So I could give all the money to the insurance company and that money would disappear at the end of the year, or I could give a portion of the money to my own HSA and I would get to keep any leftover at the end of the year. Well, now I had instant regret that I didn't sign up the first year. The first year was rather rough because we had to pay all health care expenses out of pocket until we met the deductible, but we couldn't reimburse ourselves out of the HSA until the money was in the HSA. But, we met the deductible by April and after that our health care costs were equivalent to what they would have been under the low deductible plan. By the end of the year we had $4000 left in the account which we then used to pay health care costs in the new year until the deductible was met. Now our HSA is growing year over year.
vosper 8y ago
There was an interesting EconTalk recently that covered some reasons for the rising costs "Robin Feldman on Drugs, Money, and Secret Handshakes" http://www.econtalk.org/robin-feldman-on-drugs-money-and-secret-handshakes/ http://www.econtalk.org/robin-feldman-on-drugs-money-and-sec...
bwb 8y ago
I believe that ACA was partially designed just to get everyone in the same sinking boat. That way one day you could actually fix fundamental structural problems when the real crisis hit.
sjb554 8y ago
The ACA hasn't been what it was supposed to be since 2015. Republicans in Congress gutted the market when they took away risk corridor payments. Small health plans priced with the payments in place, then when they didn't come through, everyone in a loss position went under. The big plans could weather the storm, market consolidates, prices rise.
datavirtue 8y ago
Just do what I do. Don't pay the medical bills. The banks got tired of medical bills posing a barrier to lending so they got with the credit reporting agencies and had them factor out the medical bills when calculating credit scores. I have tons of medical bills in collections and the best credit scores I have have ever had.
tfandango 8y ago
I have not seen mental health mentioned here yet as a factor in rising healthcare costs. My HSA/HD Plan has almost ZERO mental health doctors in network. Providers have been fleeing in droves (especially from UHC) because the insurance companies continue to lower payouts. I went from spending a co-pay for mental health care for 3 of my kids to paying out of pocket until I reach my out-of-network deductible, which I never do because it's 10K. I spend thousands of dollars per year on this and there is not much I can do about it. In some cases I've reduced frequencies of visits but the value of these types of doctors cannot be overstated in some cases. I credit my son's psychologist for his ability to function in society today. But she told me she can't take UHC because after costs she was making 10/hour. Lack of in-network mental health coverage is a huge travesty.
- brazzledazzle 8y ago
  By all accounts we have a good PPO available but this is exactly why I haven't even evaluated leaving Kaiser's HMO. Not that I don't like them. It does have positives and negatives but I've been happy so far. I just can't even consider it.
CptFribble 8y ago
Every discussion on healthcare payment structures in this country is completely asinine. Healthcare is best managed as a risk pool. The bigger the pool, the cheaper to be in it. The biggest risk pool is everyone. Therefore, we should put everyone in a single pool. How we manage this is a separate discussion. Private, public, maybe a federally chartered non-profit like the Fed. But as long as we keep ourselves fractured into thousands of different risk pools, all these discussions about deductibles and HSAs and whatnot are just chasing our own tails.
- cmuguythrow 8y ago
  To be fair, this perspective does assume that people care about the health of society as a whole. If you're willing to let others get substandard care or even die, it may be more optimal for you to have your own smaller, lower-risk pool with better benefits.
  - deleted 8y ago
    [deleted]
  - FireBeyond 8y ago
    Right. And therein lies the rub. The US is quite possibly one of the worst in the world for "Fuck you I got mine" (until you don't got yours). And then there's the cognitive dissonance of people who might have otherwise screamed about "socialized medicine" who find themselves on the unlucky end of a diagnosis and are singing a different tune (or sometimes still singing the same tune, even as they put up a GoFundMe...). How many other countries in the world consider medical bankruptcy a thing to be accepted and tolerated?
    - rayiner 8y ago
      By contrast, would the US be able to stomach denying cutting-edge treatment because it’s too expensive, like the UK? https://www.theguardian.com/science/2017/dec/20/drug-giants-hefty-prices-nhs-vital-medication-pharma-profits https://www.theguardian.com/science/2017/dec/20/drug-giants-... That’s what makes me nervous about socialized medicine in the US. I’m absolutely in favor of universal coverage—a healthcare system that maximizes the health of the average productive person. But I worry that Americans lack the cold realism of Brits, and won’t be able to effectively control costs by denying cost-ineffective treatments.
0xfeba 8y ago
Of my past 3 employers over the past 8 years (all family plans): $3000 deductible, no HSA $6000 deductible, HSA $9000 deductible, HSA I pay $370/month in premiums... $100 of that a fee because my spouse is eligible through her employer but the plans are even worse, so we declined it. So we pay $4,500/year in premiums. Which equates to roughly a 20% effective income tax instead of ~15% normally. This is ridiculous. Whomever seems best to get a single-payer plan in place is who I'll vote for. Absolutely no reason it should matter who my employer is for what doctor I can go see or how much I pay in private, personal medical bills. Retirement accounts I feel the same way, but that's a long way off for the US. Other countries have solved this fucking problem, I'm tired of elected congressmen firing back with "BUT VENEZUALA" quips every time someone mentions "Medicare for all". And the proper response to that is "So we should eliminate Medicare altogether then, right? Where's your bill for that?"
_bxg1 8y ago
Healthcare simply does not line up with the incentive structure of the free market. People can't opt-out if they're getting a bad deal. Risk outliers get turned down as bad business decisions, or the drugs they need to stay alive are impossible to afford because of "low" demand. It's left up to employers to choose the product that's best for their employees (and ensure that market competition functions), but that assumes they actually care about their employees' well-being, which most don't. Denying care to the unemployed is a strong force deepening the poverty cycle, preventing people from working their way back up to being productive members of society. Healthcare doesn't even really fit the model of insurance, because it isn't just a guard against unlikely catastrophe, it's an ongoing, chronic, inevitable cost of being a human being.
- iheartpotatoes 8y ago
  Yet here we are. Remember when Obama fought to have healthcare prices made transparent so that we could shop for the cheapest medical treatment, and that was beaten back severely by the lobby? The compromises the ACA made to bend over backward for for-profit insurance companies were an example of how much power the lobby has. I think if we've learned anything is that we need to go all in on single payer and completely remove for-profit insurance, IMHO, because of exactly what you're saying about the free market: it doesn't work for certain things (if anything, really): military, education, healthcare all the three classic failures of the freemarket. I think this is why all the dems are embracing Healthcare for All: everyone is getting screwed by healthcare except the 1%.
  - _bxg1 8y ago
    I think the free market does a good job of solving problems, just not of deciding which ones are worth solving. The military follows a hybrid model that (mostly) works, where a semi-free market is created and guided exclusively through governmental leverage, theoretically giving the best of both worlds. Utility companies work a similar way, as do (I think) some first-world government-run healthcare systems. I think the ACA was aiming for this type of thing, but was so hamstrung by compromises and by the sheer complexity of the system it was trying to reshape, that it ended up being a pretty mixed bag. Maybe in the case of American healthcare, the current state of things is just such a horrible rat's nest of problems that we really do need to burn it all down and start over.
drinane 8y ago
This is the point of high-deductable... to cast more spend on the average healthcare consumer. Also to make them price sensitive. Wellness programs are designed around making unhealthy people pay more and not trigger any of the non-discrimination issues as well. Single payer is best model proven at scale in modern countries, but it probably will take a couple decades of watching loved ones not get care before it escalates to action.
louwrentius 8y ago
I live in The Netherlands. Single person. I pay ~$2100 (converted) a year for healthcare. This includes insurance and the first $430 worth of medical cost you have to pay yourself. Any additional costs are covered by insurance.
greendestiny_re 8y ago
I was recently introduced to the idea of gluing and/or stitching one's own body parts or open wounds in case of a severe injury due to the costs associated with US healthcare. I found the nonchalant discussion of such horrible suffering absolutely incredible and would advise everyone to try some medical tourism. Here in Bosnia&Herzegovina, abdominal ultrasound is 20€, colonoscopy is 100€, one tooth filling 15€ and a tooth implant 600€. Nearly all my friends have settled outside B&H but I stayed simply because healthcare is so cheap compared to other, wealthier countries.
lordlimecat 8y ago
If you're taking a high deductible plan-- which you should be-- you should be contributing the (often substantial) savings on your premium to an HSA. In fact theres very little reason not to max out the HSA for the year. Once your HSA is at the IRS annual maximum, you have an enormous buffer between the often 20% rate post deductible and the Out of Pocket Maximum-- which the HSA will usually cover most of. You should also participate in an FSA, which being frontloaded can absorb early-year shocks. An HSA is among one of the most tax-advantaged programs you can participate in; I would argue that it is better to contribute just enough to your 401k to get the full employer match and stick all the rest into an HSA.
jason_slack 8y ago
I currently have a high deductible health care plan because it is all that is offered by my wife's employer. The deductible is $4,500 per year. If we just have normal well checkups, normal dental cleanings, normal eye glasses, and a few recurring prescriptions we would never hit the $4,500 deductible. It is insane going to the pharmacy and having them tell you that the cost is $180 per month and have no choice but to pay it. I went for a normal diabetes check and the lab work was over $600. No choice but to pay it. I needed new glasses and no choice but to pay the $150 eye exam and then many hundreds of dollars for new frames and lenses (and I had no choice to get new frames or be without my glasses completely for 1-2 weeks). To make it worse, we don't have any other choice of plan.

166 points by js2 8y ago

If you were designing a society starting from scratch today and said, "I think we should make having health insurance largely dependent on having an employer.", you would be laughed out of the room. I think we are running along some tracks that were laid long ago, and rather than all jumping off, some people in comfy Pullman cars are content with letting the train run off a cliff.

pnutjam 8y ago
to be fair, they think there are wings on their pullman cars. There aren't, but still...
delecti 8y ago
I happen to agree that the system is broken and getting worse, but that's not necessarily a good metric for whether you should change any given system now.
WrtCdEvrydy 8y ago
Individualism in America is the main cause... if you just got taxed and didn't have to worry about healthcare, people wouldn't care, but they all think that it could never happen to them.
- deleted 8y ago
  [deleted]
- CarriersSuck 8y ago
  Americans think the poor are slackers and they don't deserve anything. Even poor Americans think the "other" poor are slackers and don't deserve anything. Nothing will change until you change this mindset.
  - weberc2 8y ago
    This is a pretty bold statement. How many Americans do you know?
    - CarriersSuck 8y ago
      I've lived in the US all my life, so quite a few.
briffle 8y ago
I find it odd that some executive gets to pick which 401k and health insurance plans you get, and that you must pick from their few choices that allow you to have. I can see why the providers love it, they can target all their advertising, marketing, etc, at a few key people at large employers, but not sure how that benefits the average worker..
- SlowRobotAhead 8y ago
  You can get an individual 401K or IRA and make all your own choices. If you're talking about an employer matched 401K, I don't think it's unreasonable at all for them to select it.
  - jogjayr 8y ago
    > If you're talking about an employer matched 401K, I don't think it's unreasonable at all for them to select it. What's special about 401k matching that requires the employer to choose plans? My employer doesn't force me to have a checking account with a particular bank they chose if I want to receive my salary. They should be able to match contributions to any account anywhere.
    - SlowRobotAhead 8y ago
      I don’t know if you understand how 401K matching works on the backend. A lot of times the employers are capped on their own plans at a percentage rate that matches their employee’s participating. So matching is often in their best interest, esp at smaller companies. But, easier version is this is a perk, not your base salary. They are paying you with legal tender and there are freedoms associated to that. There is no such thing for perks. You aren’t entitled to make the administration choices for something they are gifting you.
      - jogjayr 8y ago
        > I don’t know if you understand how 401K matching works on the backend. A lot of times the employers are capped on their own plans at a percentage rate that matches their employee’s participating. I actually do not understand this. Could you please explain more? What does an employer being "capped on their own plans" mean? > But, easier version is this is a perk, not your base salary When I make a decision on a job offer, the 401k match, health insurance premium, free lunch and snacks etc. all factor in and they're all worth a certain amount of money. Money is money and how it's labeled, "perk" or "base", is irrelevant. If my employer ends 401k matching, I'll treat it as a pay cut mentally. My ultimate "fantasy" is to eliminate 401k altogether and instead let everyone contribute whatever the 401k annual limit is to an IRA. The employer can simply add matching funds to your IRA and you're free to have your retirement accounts anywhere you please.
justinmchase 8y ago
If you're designing a society from scratch and you end up with employers, insurance or money at all, then you probably are doing it wrong, lol
snowwrestler 8y ago
If I was designing a society from scratch, I don't think I would create "insurance" that is expected to pay for almost every routine, non-emergency, completely predictable cost just because it's a medical cost. The employer-provided system--which arose out of WWII-era wage controls, for those who don't know--has not only created the "have/have not" dichotomy in U.S. healthcare, it has also warped expectations about what "insurance" is supposed to cover--and broken normal pricing mechanisms.
clarkmoody 8y ago
Employer-provided healthcare is an aberration created by government interference in the market. > Employer-provided health insurance has its origin in a tax policy passed in 1943, which made insurance provided by employers tax free. At the time the United States was engaged in World War II and had enacted wage and price controls, preventing employers from competing for scarce labor using the normal mechanism of offering a higher salary. Instead, businesses used the availability of newly tax-subsidized healthcare as a means of differentiating themselves. > The tax advantages were made even more attractive and fully codified in the 1954 Internal Revenue Code. Over the next few decades, the government's subsidization of employer-provided health insurance lead to the dominance of that model of healthcare delivery...[1] So steps that got us here: 1. Enter into WWII 2. Enact price & wage controls 3. Create tax loophole for employer-provided plans 4. Enshrine loophole into the tax code These are not market phenomena, since government intervention got us here. [1] https://mises.org/library/whats-really-wrong-healthcare-industry https://mises.org/library/whats-really-wrong-healthcare-indu...
- heylook 8y ago
  Who cares? GP didn't say anything about "market" or "not-market". It's dumb that we're here. Full stop.
  - lordlimecat 8y ago
    It's dumb that we're here, but knowing the history suggests a possible solution. What if the government was able to pass legislation banning employer healthcare? I imagine the issue of healthcare coverage would resolve very shortly thereafter.

mrosett 8y ago

You can argue that the ACA improved the healthcare system overall. But it's been tough for people who were already covered by employer insurance. I think people fail to appreciate that prior to the ACA, when the healthcare system worked, it actually worked really well. I got very sick at the age of 20 while I was still on my parents very modest insurance (pre-ACA). Within 48 hours I had an appointment at the best oncology hospital within 500 miles, and I was able to get scans, tests, etc on a very short turnarounds. Ultimately I had two major surgeries in 4 months, and the whole thing probably cost the insurance company a couple hundred thousand dollars. Since my parents had already hit their out-of-pocket maximum, the marginal cost to us was 0. Now, the "when it worked" caveat is a big one. The story would be very different if my parents didn't have insurance at all or if I hadn't been eligible to be on it. But the same story today on my insurance would cost me a lot more money out of pocket due to a much higher deductible and a higher out-of-pocket maximum. My perspective is that the ACA made things significantly better for a small group and modestly worse for most people. I'm open to moral arguments that the tradeoff was worth it (although that's not what I believe.) But I dislike rhetoric that pretends there's no tradeoff at all. Edit: Added substance to a one-liner.

duxup 8y ago
How so? The choice of covering crappy plans is the employer's choice... and crappy plans are what have been pushed AFTER the ACA was passed. Largely by the GoP... Is that what the ACA was, or what someone(s) who want it to fail want? There's a weird narrative where any event is tied to the ACA while they ignore what the healthcare system is in the US overall.
- mdorazio 8y ago
  The parent comment is exaggerated, but I think the point is that prior to ACA, employer-provided plans tended to be cheaper and have lower deductibles largely because insurance companies were able to drop or deny coverage whenever they felt like it for individual plans to keep their margins up. While logically true, this is roughly equivalent to hearing from an old coworker that South Africa was a great place to be white under apartheid... I think it's also worth exploring how much of the difference in financial cost of health insurance plans is due to time + annual overall increases in healthcare cost in the US. ACA was passed 9 years ago. Even under the previous 9 year annual percentage increase averages, you would expect healthcare costs to be at least 20% more expensive than they were in 2010, regardless of ACA.

tptacek 8y ago

Isn't the point of an HDHP that you're supposed to set up an HSA to go with it? Premiums for HDHPs are significantly lower than for normal health plans; the idea is that you're supposed to use the premium savings to fund the HSA, which is then money that carries over year over year, right?

duxup 8y ago
Generally, but I think that's a bit of a "hey people without a lot of money who can't afford more... you should save money" there. Not that they shouldn't do it, but a slight paradox there.
- tathougies 8y ago
  The point was that the premium was lower so you could save the difference and instead of that difference going to waste each year, it could compound over time.
  - thekingofh 8y ago
    HSA is spend it or lose it.
    - hawaiianbrah 8y ago
      You’re thinking of FSAs
    - goobynight 8y ago
      Nonono. That's an FSA. You can hold on to your HSA indefinitely and withdraw for medical reimbursement at any time (decades later).
    - wyldfire 8y ago
      You're mistaken, but it's an easy mistake to make. There's an alphabet soup of FSA/LPFSA/HSA/DCFSA options. An HSA is truly your own savings account, owned by you (just like any other savings account), regardless of where contributions come from.

paxys 8y ago

High-deductible health plans were always designed to benefit employers. My company switched us to one with a big PR campaign highlighting how everything would be better (contributions to HSA - free money!). The only "advantage" is that companies have to pay smaller premiums and employees are greatly discouraged from getting care due to high costs. Funny enough, employers are rethinking this now since employees not getting basic preventive care is actually more expensive for them in the long run - https://www.insurancejournal.com/news/national/2018/06/26/493273.htm https://www.insurancejournal.com/news/national/2018/06/26/49....

dsfyu404ed 8y ago
If you spend a lot on healthcare (i.e. have a family) then a HSA works fine since you hit your maximums really quick and then only pay some small % of the sticker price after that. For everyone who isn't gonna spend a few grand in healthcare every year it totally sucks and is a massive incentive not to have routine care done.
- lotsofpulp 8y ago
  That doesn’t make sense. If you spend a lot on healthcare, then why would you want to spend it out of pocket from HSA instead of letting insurer pick it up with a non HDHP?
  - dsfyu404ed 8y ago
    You only spend out of pocket until the various out of pocket limits kick in.
    - lotsofpulp 8y ago
      There is only one out of pocket limit: https://www.healthcare.gov/glossary/out-of-pocket-maximum-limit/ https://www.healthcare.gov/glossary/out-of-pocket-maximum-li... Healthcare costs whatever it costs, no matter what the premium / deductible is. The more of it that is used, the more someone has to pay, and you can be sure the insurance company is going to adjust the premiums or deductible or coinsurance/copay to make sure it's not them (in the long run). The HSA/HDHP option just lets you gamble that you won't need enough medical care in the year to offset the investment and tax gains of contributing to an HSA. And if you're lucky, you'll make it all the way to Medicare eligibility. Although I'm pretty sure we'll see Medicare start being means tested in the next decade.

goobynight 8y ago

While I am satisfied with my HDHP + HSA, I'd be a lot more worried if it were my only option (I'm only young for now) or if I didn't make/save as much. People are getting hit with HDHP only and no HSA? That's rough.

rockinghigh 8y ago
Anyone with an HDHP plan can get an HSA. Whether it's through your employer or through another plan provider like Fidelity or Vanguard.
- trynewideas 8y ago
  An HSA with no employer contribution, or even administrative assistance, is like throwing money into a trash can, except at least if you throw money into a trash can, you can wheel it down to any hospital and they'll probably accept it.
  - lotsofpulp 8y ago
    What? It takes 5 minutes to open a free HSA account at Fidelity and transfer funds to it.
    - rb808 8y ago
      I didn't know they were available. I thought it could be open to everyone, but employer ones do have advantages. https://www.fidelity.com/go/hsa/why-hsa https://www.fidelity.com/go/hsa/why-hsa > You could also use it in place of an employer HSA. If you do this, you may miss out on opportunities like pre-tax payroll or employer contributions, so check with your employer to see what they offer.
      - lotsofpulp 8y ago
        You can still deduct contributions from income taxes, and you can also transfer funds after contributing to your employer sponsored HSA to your individual one.

deleted 8y ago

[deleted]

rb808 8y ago

I really like the idea of high deductible plans. The idea for me is that insurance shouldn't cover regular costs that most people pay every year. Insurance should just be for unusual events, like car insurance is only used if you have an accident. So now I got a $2k bill from ER for something that wasn't really an emergency. It makes me think carefully about next time this happens where before the cost didn't really affect me. Changing people's behavior is important part of reducing costs of the health care industry. EDIT: Yes I'm not happy with how expensive prices are now. That is the problem that HD plans have.

conorh 8y ago
I like it too, except that my (bronze level in the marketplace) high deductible plan is ~$1300 a month for my family, that is not sustainable. A recent ER visit with 1 night stay cost us about 8k out of pocket, the family deductible for the plan is $13k a year.
- symfoniq 8y ago
  Sounds like we are on the same plan.
- FireBeyond 8y ago
  Be glad that "recent" wasn't in December, prior to the deductible reset. Fun fact - my company (who sells Health Benefits Management software) added functionality so an insurer could do a "rolling window" for deductible / out of pocket management, i.e. "In any given 12 month period, your costs will not exceed $x" (where given unfortunate timing, your out of pocket could actually be 2x). Except it was less profitable to the insurers, so no-one was interested. But spun as "will be too complicated for consumers".
duxup 8y ago
> It makes me think carefully about next time this happens where before the cost didn't really affect me. I don't think that necessarily leads to logical behavior as people are, not logical, not able to make these types of decisions knowledgeably. Also let's be clear the situations we hear about with large ER bills and large volumes of non emergencies there are people who can't pay anyway. I don't doubt the system works for you and you're a good participant, but i don't know if it works for a society as a whole.

anonKeepMyJob 8y ago

One of our company's primary products "helps employees make an informed decision when choosing their health insurance plan". Basically, during open enrollment they are presented with their choices of plans and the "expected total cost" of each plan over the course of the year as calculate based on either, if we have their consent, their historic data or, if we don't have their consent, the historic data of a representative cohort. The product wasn't getting traction based on employer's wanting to provide such a service to their employees, so the sales pitch was changed. The sales pitch became, "You can save your company money by moving your employees to High Deductible Health Plans. Our product presents data that encourages employees to choose HDHPs over other plans." I'm not sure if that is currently the sales pitch, but it was the primary one for two-ish years. Our customer base is now non-trivial. I've overheard some of the conversations as to how the "representative cohort" is determined and about our data sources. It wouldn't pass a peer review. Additionally, in the past we have re-worked the numbers because our customer didn't like the results. That is, feedback from the company, not the company's employees. They did, after all, hire us to get their employees to move to a HDHP. And to top it off, the product hasn't been a great revenue source. So we're effectively compromising real people's health care coverage, for our company's business interests, and it hasn't even been that profitable. Our health insurance plan at this company is a HDHP...

anonKeepMyJob 8y ago
I tell you all that my company works with employers to move their employees to HDHPs based on sketchy data, sketchy calculations, no transparency, and based on profit motive, and,,,, nothing. Interesting. Side note: The chances that some HN readers have used our software are, very good.

angel_j 8y ago

Insurance is not suited for health care. It's suited for emergencies. Sometimes health care is that, although preferably not often, and less often if proper care is given when due. But general health care—the practice of keeping people healthy, rather than fixing them when ill—is not suited to the insurance model, and the insurance industry is too powerful to let control who gets which treatment. A proper model pays the actual healthcare provider to keep you healthy on the regular, and then it costs you nothing in the event of sickness or emergency (like you need more stress at that moment). The very idea of mutual indemnity is out the window with modern insurance, it's all about squeezing stats for margins, at which point there is not real mutuality, only competing risk profiles. Of course, a group of people might want to pool for emergencies, or even general health, but is there any benefit to the current scale of insurers? It only makes them more powerful.

rjohnk 8y ago
I wholeheartedly agree. That and employer-based access to health insurance. Imagine if you had to change auto/life/home/rental insurance every time you changed jobs.

jdoliner 8y ago

I've been trying for a while to figure out what would be a good metric to judge the ACA by. Most of the time it's success is talked about in terms of number of people insured, but that doesn't really capture how well insured they are. Life expectancy seems to be the only well known (at least to me) stat that begins to capture the health of the nation. We've now had 3 straight years of declining life expectancy in the US [0], a single year is virtually unheard of in developed nations. Now there are lots of confounding variables, and it's certainly not possible to say the ACA is the cause. And 3 years of downward trend, isn't historically unprecedented. However, it certainly makes it hard to paint the ACA as a success, I'd want to see some compelling evidence that the ACA had made America healthier, which doesn't exist right now. The question to me is how long we can accept a downward life expectancy trend before we start looking at the ACA as a potential cause. [0] https://www.smithsonianmag.com/smart-news/us-life-expectancy-drops-third-year-row-reflecting-rising-drug-overdose-suicide-rates-180970942/ https://www.smithsonianmag.com/smart-news/us-life-expectancy...

stronglikedan 8y ago
A good metric is - did it do what it was designed to do? I think the answer is yes. It was designed to be an unsustainable failure, in order to trick people into thinking single-payer was the next best thing. In that regard, it has been a resounding success.
LarryDarrell 8y ago
I hate on the ACA as much as the next guy, but the article you linked blames drug overdoses and suicides. For that I would blame the for-profit health care system pushing opioids and the (Great Recession + inadequacy of our mental health care system). To blame that on a law that sought to eliminate preexisting conditions and to establish a baseline as to what a health insurance plan ought to provide seems like a stretch. Having a free yearly physical isn't going to help your crushing depression and economic anxieties.
- jdoliner 8y ago
  I was just linking that as a reference for the declining life expectancy. I don't think they even come close to establishing opioid and suicide deaths as the cause, that's just journalistic conjecture. If you look at the number of opioid and suicide related deaths it's very small compared to the total population of the US, so the math just doesn't seem to work out for me. I remember an HN comment a while ago that worked out how many deaths you'd need from those causes to lower the life expectancy as much as we're seeing and it was a lot higher than what we're seeing now. Unfortunately I can't seem to unearth the comment.

kxyvr 8y ago

For those of us who are self-employed, I'll mention that low or no deductible health plans may provide better value. When they sort of work, health deductible health plans are nice because: (1) monthly premiums are low and (2) they give access to a health savings account (HSA) where some amount of money can be stored pre-tax and then used for health related expenses. Of course, none of this saves someone that gets hammered with a $5000 bill like those in the article. Anyway, the pre-tax HSA account seems to be an attractive to many, and it may be benefit some. However, if you're self-employed, you can deduct your premiums off your income through the self-employed health insurance deduction: https://www.irs.gov/taxtopics/tc502 https://www.irs.gov/taxtopics/tc502 This means that there may be higher tax benefit for a high-premium, but low or no-deductible plan. Personally, I find it much easier to handle than going through the trouble of an HSA. All that said, it's pretty much all the same in a catastrophic case. Just take the premiums x 12 + out-of-pocket max to figure out the "maximum" yearly liability. At least on the ACA exchanges, this number is typically $11-15k on what I've seen from either high or low-deductible plans. If you can't make this number, you're not fully covered for catastrophic. Alternatively, if the hospital sends a bill to an out-of-network operator, you're probably screwed as well. Anyway, this is not to detract from the article. This is a huge problem. Mostly, I wanted to pass on some information that I had to sort through when picking and choosing plans over the years.

lotsofpulp 8y ago
The tax savings on the difference in premium between high deductible health plans and low deductible health plans is probably $2k at most ($6k in extra premiums @30% tax rate). That’s for single coverage, but even for family total year tax savings can’t be more than $5k. In either case, triple tax advantage of HSA is far more, especially due to compound growth. If you have the cash to be able to deal with $10k of medical expenses in an emergency, HDHP + HSA is a no brainer
- kxyvr 8y ago
  This is not to say that you're wrong, but I don't completely understand your numbers. My understanding of the triple-tax advantage of HSAs are that 1. Money going into the HSA is pre-tax 2. Investment gains from the HSA are not taxed 3. Money used from the HSA for qualifying health expenses is not taxed That said, there are many restrictions and two of these benefits seem to be included for self-employed individuals. For example, an HSA can not be used for over the counter drugs unless there's a prescription: https://www.irs.gov/newsroom/affordable-care-act-questions-and-answers-on-over-the-counter-medicines-and-drugs https://www.irs.gov/newsroom/affordable-care-act-questions-a... However, prescriptions can already be deducted without an HSA if one is itemizing: https://www.irs.gov/taxtopics/tc502 https://www.irs.gov/taxtopics/tc502 Alternatively, the above link also states that things like office visits to a physician can be deducted, which are things normally an HSA are used for. Basically, the one benefit that seems unique to an HSA is that the investment gains from the money in the account are not taxed, which is great assuming that this money is used for medical expenses or you make it to 65. Again, I'm not saying you're incorrect, but it looks like self-employed individuals automatically benefit from 1 and 3 above, assuming itemization. As such, it's seems like the trade off is whether the higher premium, which is less high due to the tax write-off, is worth lower the lower cost of a physician visit. Assuming, of course, we haven't gone catastrophic. What am I missing?

jkaljundi 8y ago

NET::ERR_CERT_DATE_INVALID - it's interesting as it's May 3rd and the cert seems valid until May 3rd as well?

robertgale 8y ago
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etchalon 8y ago

At Mess (my agency), we were sort of forced into going with a HDCP, but we found a way for it to be a win for everyone. Our absolutely-perfect no-deductible no-coinsurance plan was retired, and every year, for five years, the cost of our reasonable-deductible no-coinsurance plan kept going up. Eventually, our broker convinced us that HDCP was the only way. But I absolutely hated it. We have quite a few employees with chronic, expensive conditions. Moving a HDCP (in our case 2K/6K family), effectively meant we were cutting their salaries. They were absolutely going to be paying that deductible. We also employ a LOT of younger people, who just don't go to the doctor more than once a year, maybe. The HDCP wasn't that big a deal for them. We looked into HSAs – the thing our broker recommended. These are garbage. In theory, we'd put in some amount of money each month, and eventually, over time, the entire premium would be sitting in an account for the employee. For the young and healthy, this was free money. The move to HCDP+HSA was basically a raise for them. For the chronically-ill, the rate we'd contribute to their HSA was never going to be fast enough to keep pace with their expenses. And for most people, with most savings levels (near $0), a $1500 bill you'll "eventually get back" is just as unaffordable as one they'd never get bet. I hate HSAs. "Look, we know most of our folks are NEVER going to hit their deductible. We know a few folks will. Can't we just give everyone a credit card with a 2K limit that they can use to pay for stuff?" Meet HRAs. HRAs are like HSAs, but they're not incrementally funded. Instead, it's basically a credit card whose balance I, the employer, pay. It has an annual limit, which matches each employees annual deductible. These things are amazing. 1. The employee never has to worry about out of pocket cost. They go to the doctor, the doctor charges their HRA. 2. The company has MUCH lower premiums, because we're on an HCDP. I think we saved like 30% or something moving to it. 3. We have a maximum annual additional cost each employee can ring up in medical costs. Worst case scenario (every employee hitting their deductible) isn't fantastic, but we can plan for it. 4. The normal-case scenario is a that a handful of employees hit their deductible very quickly at the beginning of the year, and the rest barely use their HRA at all. I do not understand why more companies don't do HRAs given the above.

trynewideas 8y ago
Taxes. HRAs can be a huge headache for employees (never employers). SEHRAs also have a bad reputation for being the worst of both HSA and more traditional insurance plans: underfunded, high overhead for employees, all for severely limited provider choice. ICHRAs (individual-coverage) are the real bridge between HSAs and traditional insurance—you can use them as an HRA-style account _or_ use the money to buy an insurance plan off a marketplace. While it still pushes the burden of choosing and managing health care onto the employee, they at least have flexibility in coverage as well as tax benefits for both employees and employers. They, uh, also don't exist until 1 Jan 2020, and they give total control to the employer. If you're a good employer, that's great. If you're a shitty one, the employee is easily fucked over.

irrational 8y ago

I have a HDHP with an HSA. When my company first rolled it out I barely gave it a glance (why would anyone want a high deductible?) and stayed on the low deductible plan. However, the next year I looked at it closer. I ran the numbers and realized that I could have x dollars come out of my paycheck to the insurance company under the low deductible plan, or I could have y dollars go to the insurance company and z dollars go into my HSA. And y + z = x (within a $100 or so). So I could give all the money to the insurance company and that money would disappear at the end of the year, or I could give a portion of the money to my own HSA and I would get to keep any leftover at the end of the year. Well, now I had instant regret that I didn't sign up the first year. The first year was rather rough because we had to pay all health care expenses out of pocket until we met the deductible, but we couldn't reimburse ourselves out of the HSA until the money was in the HSA. But, we met the deductible by April and after that our health care costs were equivalent to what they would have been under the low deductible plan. By the end of the year we had $4000 left in the account which we then used to pay health care costs in the new year until the deductible was met. Now our HSA is growing year over year.

vosper 8y ago

There was an interesting EconTalk recently that covered some reasons for the rising costs "Robin Feldman on Drugs, Money, and Secret Handshakes" http://www.econtalk.org/robin-feldman-on-drugs-money-and-secret-handshakes/ http://www.econtalk.org/robin-feldman-on-drugs-money-and-sec...

bwb 8y ago

I believe that ACA was partially designed just to get everyone in the same sinking boat. That way one day you could actually fix fundamental structural problems when the real crisis hit.

sjb554 8y ago

The ACA hasn't been what it was supposed to be since 2015. Republicans in Congress gutted the market when they took away risk corridor payments. Small health plans priced with the payments in place, then when they didn't come through, everyone in a loss position went under. The big plans could weather the storm, market consolidates, prices rise.

datavirtue 8y ago

Just do what I do. Don't pay the medical bills. The banks got tired of medical bills posing a barrier to lending so they got with the credit reporting agencies and had them factor out the medical bills when calculating credit scores. I have tons of medical bills in collections and the best credit scores I have have ever had.

tfandango 8y ago

I have not seen mental health mentioned here yet as a factor in rising healthcare costs. My HSA/HD Plan has almost ZERO mental health doctors in network. Providers have been fleeing in droves (especially from UHC) because the insurance companies continue to lower payouts. I went from spending a co-pay for mental health care for 3 of my kids to paying out of pocket until I reach my out-of-network deductible, which I never do because it's 10K. I spend thousands of dollars per year on this and there is not much I can do about it. In some cases I've reduced frequencies of visits but the value of these types of doctors cannot be overstated in some cases. I credit my son's psychologist for his ability to function in society today. But she told me she can't take UHC because after costs she was making 10/hour. Lack of in-network mental health coverage is a huge travesty.

brazzledazzle 8y ago
By all accounts we have a good PPO available but this is exactly why I haven't even evaluated leaving Kaiser's HMO. Not that I don't like them. It does have positives and negatives but I've been happy so far. I just can't even consider it.

CptFribble 8y ago

Every discussion on healthcare payment structures in this country is completely asinine. Healthcare is best managed as a risk pool. The bigger the pool, the cheaper to be in it. The biggest risk pool is everyone. Therefore, we should put everyone in a single pool. How we manage this is a separate discussion. Private, public, maybe a federally chartered non-profit like the Fed. But as long as we keep ourselves fractured into thousands of different risk pools, all these discussions about deductibles and HSAs and whatnot are just chasing our own tails.

cmuguythrow 8y ago
To be fair, this perspective does assume that people care about the health of society as a whole. If you're willing to let others get substandard care or even die, it may be more optimal for you to have your own smaller, lower-risk pool with better benefits.
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- FireBeyond 8y ago
  Right. And therein lies the rub. The US is quite possibly one of the worst in the world for "Fuck you I got mine" (until you don't got yours). And then there's the cognitive dissonance of people who might have otherwise screamed about "socialized medicine" who find themselves on the unlucky end of a diagnosis and are singing a different tune (or sometimes still singing the same tune, even as they put up a GoFundMe...). How many other countries in the world consider medical bankruptcy a thing to be accepted and tolerated?
  - rayiner 8y ago
    By contrast, would the US be able to stomach denying cutting-edge treatment because it’s too expensive, like the UK? https://www.theguardian.com/science/2017/dec/20/drug-giants-hefty-prices-nhs-vital-medication-pharma-profits https://www.theguardian.com/science/2017/dec/20/drug-giants-... That’s what makes me nervous about socialized medicine in the US. I’m absolutely in favor of universal coverage—a healthcare system that maximizes the health of the average productive person. But I worry that Americans lack the cold realism of Brits, and won’t be able to effectively control costs by denying cost-ineffective treatments.

0xfeba 8y ago

Of my past 3 employers over the past 8 years (all family plans): $3000 deductible, no HSA $6000 deductible, HSA $9000 deductible, HSA I pay $370/month in premiums... $100 of that a fee because my spouse is eligible through her employer but the plans are even worse, so we declined it. So we pay $4,500/year in premiums. Which equates to roughly a 20% effective income tax instead of ~15% normally. This is ridiculous. Whomever seems best to get a single-payer plan in place is who I'll vote for. Absolutely no reason it should matter who my employer is for what doctor I can go see or how much I pay in private, personal medical bills. Retirement accounts I feel the same way, but that's a long way off for the US. Other countries have solved this fucking problem, I'm tired of elected congressmen firing back with "BUT VENEZUALA" quips every time someone mentions "Medicare for all". And the proper response to that is "So we should eliminate Medicare altogether then, right? Where's your bill for that?"

_bxg1 8y ago

Healthcare simply does not line up with the incentive structure of the free market. People can't opt-out if they're getting a bad deal. Risk outliers get turned down as bad business decisions, or the drugs they need to stay alive are impossible to afford because of "low" demand. It's left up to employers to choose the product that's best for their employees (and ensure that market competition functions), but that assumes they actually care about their employees' well-being, which most don't. Denying care to the unemployed is a strong force deepening the poverty cycle, preventing people from working their way back up to being productive members of society. Healthcare doesn't even really fit the model of insurance, because it isn't just a guard against unlikely catastrophe, it's an ongoing, chronic, inevitable cost of being a human being.

iheartpotatoes 8y ago
Yet here we are. Remember when Obama fought to have healthcare prices made transparent so that we could shop for the cheapest medical treatment, and that was beaten back severely by the lobby? The compromises the ACA made to bend over backward for for-profit insurance companies were an example of how much power the lobby has. I think if we've learned anything is that we need to go all in on single payer and completely remove for-profit insurance, IMHO, because of exactly what you're saying about the free market: it doesn't work for certain things (if anything, really): military, education, healthcare all the three classic failures of the freemarket. I think this is why all the dems are embracing Healthcare for All: everyone is getting screwed by healthcare except the 1%.
- _bxg1 8y ago
  I think the free market does a good job of solving problems, just not of deciding which ones are worth solving. The military follows a hybrid model that (mostly) works, where a semi-free market is created and guided exclusively through governmental leverage, theoretically giving the best of both worlds. Utility companies work a similar way, as do (I think) some first-world government-run healthcare systems. I think the ACA was aiming for this type of thing, but was so hamstrung by compromises and by the sheer complexity of the system it was trying to reshape, that it ended up being a pretty mixed bag. Maybe in the case of American healthcare, the current state of things is just such a horrible rat's nest of problems that we really do need to burn it all down and start over.

drinane 8y ago

This is the point of high-deductable... to cast more spend on the average healthcare consumer. Also to make them price sensitive. Wellness programs are designed around making unhealthy people pay more and not trigger any of the non-discrimination issues as well. Single payer is best model proven at scale in modern countries, but it probably will take a couple decades of watching loved ones not get care before it escalates to action.

louwrentius 8y ago

I live in The Netherlands. Single person. I pay ~$2100 (converted) a year for healthcare. This includes insurance and the first $430 worth of medical cost you have to pay yourself. Any additional costs are covered by insurance.

greendestiny_re 8y ago

I was recently introduced to the idea of gluing and/or stitching one's own body parts or open wounds in case of a severe injury due to the costs associated with US healthcare. I found the nonchalant discussion of such horrible suffering absolutely incredible and would advise everyone to try some medical tourism. Here in Bosnia&Herzegovina, abdominal ultrasound is 20€, colonoscopy is 100€, one tooth filling 15€ and a tooth implant 600€. Nearly all my friends have settled outside B&H but I stayed simply because healthcare is so cheap compared to other, wealthier countries.

lordlimecat 8y ago

If you're taking a high deductible plan-- which you should be-- you should be contributing the (often substantial) savings on your premium to an HSA. In fact theres very little reason not to max out the HSA for the year. Once your HSA is at the IRS annual maximum, you have an enormous buffer between the often 20% rate post deductible and the Out of Pocket Maximum-- which the HSA will usually cover most of. You should also participate in an FSA, which being frontloaded can absorb early-year shocks. An HSA is among one of the most tax-advantaged programs you can participate in; I would argue that it is better to contribute just enough to your 401k to get the full employer match and stick all the rest into an HSA.

jason_slack 8y ago

I currently have a high deductible health care plan because it is all that is offered by my wife's employer. The deductible is $4,500 per year. If we just have normal well checkups, normal dental cleanings, normal eye glasses, and a few recurring prescriptions we would never hit the $4,500 deductible. It is insane going to the pharmacy and having them tell you that the cost is $180 per month and have no choice but to pay it. I went for a normal diabetes check and the lab work was over $600. No choice but to pay it. I needed new glasses and no choice but to pay the $150 eye exam and then many hundreds of dollars for new frames and lenses (and I had no choice to get new frames or be without my glasses completely for 1-2 weeks). To make it worse, we don't have any other choice of plan.