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I bristle when I see health savings accounts presented as a solution to the health care crisis. The median household income in the U.S. is about $64,000 a year

I bristle when I see health savings accounts presented as a solution to the health care crisis. The median household income in the U.S. is about $64,000 a year (see https://www.census.gov/library/publications/2019/demo/p60-266.html https://www.census.gov/library/publications/2019/demo/p60-26...). When a single major medical procedure can result in a six-figure bill, there's just no way that the average person could ever save enough. You end up with people who are lucky enough to never need to tap their HSAs, and people who are unlucky enough to get sick, whose HSAs just present a speed bump on their slide into bankruptcy. There's only one thing HSAs are really good at, and that's creating a huge new tranche of money for Wall Street to suck fees out of.

nradov 7y ago
HSAs are part of high deductible insurance plans with out-of-pocket maximums. No one with such a plan would ever receive a six-figure bill. (With the possible exception of surprise billing from out-of-network providers, which we ought to ban.)
- irrational 7y ago
  To the best of my understanding, you are 100% correct. Why are you being downvoted? Do other people know something you and I don't know?
  - op00to 7y ago
    Yes. Look at the in/out network for your high deductible plan. None of the providers I use on a traditional plan are considered as in network for the same employers high deductible/hsa plan. Our high deductible plan does not cover out of network. Not at all. Fun!!!
    - irrational 7y ago
      That's not the case with my plan at all. We can use all the exact same providers as the traditional plan on our high deductible/hsa plan. We just switched to the high deductible plan a few years ago (after doing the math and realizing how much better of a deal it is), but we've kept all of our same doctors and specialists as we used before.
- francisofascii 7y ago
  Exactly. If you have insurance, you should never receive surprise bills that are higher than your out of pocket maximum. Bad insurance might mean a higher out of pocket maximum, but that should mean what is says...maximum.
- cneurotic 7y ago
  Oh, people on such plans incur massive bills all the time. Suppose you're in a bicycling accident, you're knocked unconscious, and an ambulance takes you to a hospital that isn't in your insurance network. Boom. Out-of-network charges. If your bicycling accident was so bad that you need surgery, a five figure bill is a certainty. A six figure one is rarer -- but absolutely possible. What's really messed up is that, even if you end up at an in-network HOSPITAL, you might get care from an out-of-network provider. In this bicycle surgery hypothetical, for instance, your hospital and your surgeon might be in your network - but the anesthesiologist isn't. Boom. Another out-of-network charge. (Thats called Surprise Billing, btw) At median income levels, there's no amount of HSA savings money that can insulate you from costs like that. The current US insurance system asks consumers to walk an insane tightrope of cost controls. It's no wonder a lot of us fall.
  - secabeen 7y ago
    > (Thats called Surprise Billing, btw) Yes, and in some states, it's starting to be illegal. https://www.nytimes.com/2019/09/26/upshot/california-surprise-medical-billing-law-effects.html https://www.nytimes.com/2019/09/26/upshot/california-surpris...
  - smileysteve 7y ago
    You're conflating in-network, out of network with HSA -- as these also apply for POS and HMO plans - only traditional plans don't get the plan cost savings, tax deduction, (or if they're lucky the employers savings into an HSA account) Your bicycling example isn't far off though (as someone who had an HSA and was in a bicycling accident). I had a ~$3600 deductible, and that was spent between an ambulance ride, ER visit, blood test, and MRI. So, at that point, all costs would be on my insurer and I would theoretically no longer care to price discriminate for follow up visits (to get stitches removed) I still have an HSA, though I make sure I get the lower deductible now.
- op00to 7y ago
  Wellll no one unless you somehow make it into an out of network situation. You know, like in an emergency. High deductible plans typically have much more constricted networks than the more traditional plans. Good luck figuring out what’s in and out of network while your appendix may be bursting!!!!
deleted 7y ago
[deleted]
dv_dt 7y ago
It's so odd that the claim of efficiency is based on HSA, when you look at Singapore, and say the UKs NHS have similar price performance at less than half per capita costs vs the US. As far as I understand, the NHS doesn't have any sort of HSA/deductible fees, nor price tag signals. What is in common between the low cost health systems of the UK and Singapore is significant government ownership of the service outlets as well as government negotiation of prices of input materials (drugs, etc..) for those services.
- mattmanser 7y ago
  Can confirm we don't have any sort of HSA/deductible fees. You just phone the doctor and make an appointment. Stuff happens. Pay for nothing. Ambulance turns up to help you? No payment. 5 days in hospital? No payment. Major surgery? No payment. 15 years ago, I went to the doctor with a back pain, turned out it was an pilonidal abscess, got told not to eat anything, sent directly to hospital, surgery next morning, next 2 days in hospital, then nurse came round to my house once a week for the next 8 weeks to change the dressings. I paid? Nothing. No-one even mentioned cost. I filled in no forms. It just happened. Only thing we have to pay for is prescriptions, a fixed fee regardless of the drug of £9 ($12). And only people who can afford it, people like pensioners and people on benefit get prescriptions free. Oh, and a fairly small charge for dental checkups (£40 every 6/12 months) and if you want non-standard dental work (you used to have to pay for white fillings, otherwise you got the cheaper amalgam ones, but now you can get either I believe). They'll usually tell you if it's a lot cheaper to buy for prescriptions yourself, i.e. if they reckon simple painkillers is the best thing, the doctor will tell you to go buy £0.40 paracetamol from the supermarket, instead of giving a prescription for the same drug at £9.
  - lotsofpulp 7y ago
    Doctors in the UK don’t regularly make $300k+ per year. https://www.medscape.com/slideshow/uk-doctors-salary-report-6009730 https://www.medscape.com/slideshow/uk-doctors-salary-report-... https://www.medscape.com/slideshow/2019-compensation-overview-6011286 https://www.medscape.com/slideshow/2019-compensation-overvie...
adventured 7y ago
> When a single major medical procedure can result in a six-figure bill, there's just no way that the average person could ever save enough. You end up with people who are lucky enough to never need to tap their HSAs, and people who are unlucky enough to get sick, whose HSAs just present a speed bump on their slide into bankruptcy. While I agree the HSA is an ineffective solution, what you're describing isn't accurate. The HSA savings segment is not for major medical expenses. The savings portion is for minor medical expenses. The HSA savings account is paired with a high-deductible insurance policy that covers major medical expenses.
smileysteve 7y ago
HSAs have limits, granted at $13,500 for a family when studies show most families have to take a loan for a $500 expenditure doesn't help that much. The minimum deductible for an individual is $1,350. So, yeah, one problem is that an ambulance + ER visit will blow through any person's deductible quite easily.
- lotsofpulp 7y ago
  The $500 loan statistic is false. https://mobile.twitter.com/p_millerd/status/1118071142311288838?lang=en https://mobile.twitter.com/p_millerd/status/1118071142311288...
  - deleted 7y ago
    [deleted]
  - notJim 7y ago
    That thread also misinterprets the study. The question asked is multiple-choice, so you can't just add up the numbers the way he does (what's weird is that he acknowledges this, and then adds up the numbers anyway…) Depending on how you imagine the percentages to overlap, you can kind of have it say whatever you want.
    - iudqnolq 7y ago
      No, he adds the numbers up to accurately provide a maximum value that's low enough that his point is proved regardless of how far below it the real value is. The survey design, reduced to a trivial example: Select all that apply - A: 100% select - B: 50% select - C: 12% select Suppose there were 100 people. There is no way to imagine overlap that leads to more than 12 people selecting C, as you claim.
lotsofpulp 7y ago
> There's only one thing HSAs are really good at, and that's creating a huge new tranche of money for Wall Street to suck fees out of. You can move HSA funds to an HSA at Fidelity and put it in FSKAX or FZROX at no fee.
mattrp 7y ago
Usually I see HSA’s combined with a high deductible plan so that the six figure medical bill is protected. We were on one when my daughter needed surgery (~$50k). We also had another child the same year ($20k), and all we paid was the $6k deductible which also came out of pre-tax money AND my employer contributed $3k to cover the premium. There were no bank fees involved. i am now self employed. Unfortunately I can not buy a high deductible or a HSA plan in my state post Obama care and my premiums in 2018 where $38k and this year have dropped to $32k. To be honest I kind of miss that $6k deductible.
- lotsofpulp 7y ago
  Which state? I’m very surprised an entire state would not have an HSA eligible option on healthcare.gov.
  - EvanAnderson 7y ago
    I bought marketplace insurance from 2013 to 2018 in Ohio. The number of HSA-eligible plans dropped in that time period. For 2019 there were no HSA-eligible plans available in my county.
  - mattrp 7y ago
    There is one but the premium is the same as the gold plan.
    - lotsofpulp 7y ago
      Gold means a “typical” population is expected to pay 20% while insurance company pays 80%. A plan can be gold and HSA eligible at the same time, it will just have lower out of pocket maximum and coinsurances. If you have enough cash to afford the deductible, you should always go for HSA as you can earn the tax free investment returns on the HSA funds. A gold non HSA and gold HSA both are designed for the insured to pay 20% and insurance company to pay 80%, but the HSA will let you invest $3,550/$7,100 single/family, and that can add up over the years. If you started it around 10 years ago, you could realistically have over $100k in the HSA for family plans.

nradov 7y ago

HSAs are part of high deductible insurance plans with out-of-pocket maximums. No one with such a plan would ever receive a six-figure bill. (With the possible exception of surprise billing from out-of-network providers, which we ought to ban.)

irrational 7y ago
To the best of my understanding, you are 100% correct. Why are you being downvoted? Do other people know something you and I don't know?
- op00to 7y ago
  Yes. Look at the in/out network for your high deductible plan. None of the providers I use on a traditional plan are considered as in network for the same employers high deductible/hsa plan. Our high deductible plan does not cover out of network. Not at all. Fun!!!
  - irrational 7y ago
    That's not the case with my plan at all. We can use all the exact same providers as the traditional plan on our high deductible/hsa plan. We just switched to the high deductible plan a few years ago (after doing the math and realizing how much better of a deal it is), but we've kept all of our same doctors and specialists as we used before.
francisofascii 7y ago
Exactly. If you have insurance, you should never receive surprise bills that are higher than your out of pocket maximum. Bad insurance might mean a higher out of pocket maximum, but that should mean what is says...maximum.
cneurotic 7y ago
Oh, people on such plans incur massive bills all the time. Suppose you're in a bicycling accident, you're knocked unconscious, and an ambulance takes you to a hospital that isn't in your insurance network. Boom. Out-of-network charges. If your bicycling accident was so bad that you need surgery, a five figure bill is a certainty. A six figure one is rarer -- but absolutely possible. What's really messed up is that, even if you end up at an in-network HOSPITAL, you might get care from an out-of-network provider. In this bicycle surgery hypothetical, for instance, your hospital and your surgeon might be in your network - but the anesthesiologist isn't. Boom. Another out-of-network charge. (Thats called Surprise Billing, btw) At median income levels, there's no amount of HSA savings money that can insulate you from costs like that. The current US insurance system asks consumers to walk an insane tightrope of cost controls. It's no wonder a lot of us fall.
- secabeen 7y ago
  > (Thats called Surprise Billing, btw) Yes, and in some states, it's starting to be illegal. https://www.nytimes.com/2019/09/26/upshot/california-surprise-medical-billing-law-effects.html https://www.nytimes.com/2019/09/26/upshot/california-surpris...
- smileysteve 7y ago
  You're conflating in-network, out of network with HSA -- as these also apply for POS and HMO plans - only traditional plans don't get the plan cost savings, tax deduction, (or if they're lucky the employers savings into an HSA account) Your bicycling example isn't far off though (as someone who had an HSA and was in a bicycling accident). I had a ~$3600 deductible, and that was spent between an ambulance ride, ER visit, blood test, and MRI. So, at that point, all costs would be on my insurer and I would theoretically no longer care to price discriminate for follow up visits (to get stitches removed) I still have an HSA, though I make sure I get the lower deductible now.
op00to 7y ago
Wellll no one unless you somehow make it into an out of network situation. You know, like in an emergency. High deductible plans typically have much more constricted networks than the more traditional plans. Good luck figuring out what’s in and out of network while your appendix may be bursting!!!!

deleted 7y ago

[deleted]

dv_dt 7y ago

It's so odd that the claim of efficiency is based on HSA, when you look at Singapore, and say the UKs NHS have similar price performance at less than half per capita costs vs the US. As far as I understand, the NHS doesn't have any sort of HSA/deductible fees, nor price tag signals. What is in common between the low cost health systems of the UK and Singapore is significant government ownership of the service outlets as well as government negotiation of prices of input materials (drugs, etc..) for those services.

mattmanser 7y ago
Can confirm we don't have any sort of HSA/deductible fees. You just phone the doctor and make an appointment. Stuff happens. Pay for nothing. Ambulance turns up to help you? No payment. 5 days in hospital? No payment. Major surgery? No payment. 15 years ago, I went to the doctor with a back pain, turned out it was an pilonidal abscess, got told not to eat anything, sent directly to hospital, surgery next morning, next 2 days in hospital, then nurse came round to my house once a week for the next 8 weeks to change the dressings. I paid? Nothing. No-one even mentioned cost. I filled in no forms. It just happened. Only thing we have to pay for is prescriptions, a fixed fee regardless of the drug of £9 ($12). And only people who can afford it, people like pensioners and people on benefit get prescriptions free. Oh, and a fairly small charge for dental checkups (£40 every 6/12 months) and if you want non-standard dental work (you used to have to pay for white fillings, otherwise you got the cheaper amalgam ones, but now you can get either I believe). They'll usually tell you if it's a lot cheaper to buy for prescriptions yourself, i.e. if they reckon simple painkillers is the best thing, the doctor will tell you to go buy £0.40 paracetamol from the supermarket, instead of giving a prescription for the same drug at £9.
- lotsofpulp 7y ago
  Doctors in the UK don’t regularly make $300k+ per year. https://www.medscape.com/slideshow/uk-doctors-salary-report-6009730 https://www.medscape.com/slideshow/uk-doctors-salary-report-... https://www.medscape.com/slideshow/2019-compensation-overview-6011286 https://www.medscape.com/slideshow/2019-compensation-overvie...

adventured 7y ago

> When a single major medical procedure can result in a six-figure bill, there's just no way that the average person could ever save enough. You end up with people who are lucky enough to never need to tap their HSAs, and people who are unlucky enough to get sick, whose HSAs just present a speed bump on their slide into bankruptcy. While I agree the HSA is an ineffective solution, what you're describing isn't accurate. The HSA savings segment is not for major medical expenses. The savings portion is for minor medical expenses. The HSA savings account is paired with a high-deductible insurance policy that covers major medical expenses.

smileysteve 7y ago

HSAs have limits, granted at $13,500 for a family when studies show most families have to take a loan for a $500 expenditure doesn't help that much. The minimum deductible for an individual is $1,350. So, yeah, one problem is that an ambulance + ER visit will blow through any person's deductible quite easily.

lotsofpulp 7y ago
The $500 loan statistic is false. https://mobile.twitter.com/p_millerd/status/1118071142311288838?lang=en https://mobile.twitter.com/p_millerd/status/1118071142311288...
- deleted 7y ago
  [deleted]
- notJim 7y ago
  That thread also misinterprets the study. The question asked is multiple-choice, so you can't just add up the numbers the way he does (what's weird is that he acknowledges this, and then adds up the numbers anyway…) Depending on how you imagine the percentages to overlap, you can kind of have it say whatever you want.
  - iudqnolq 7y ago
    No, he adds the numbers up to accurately provide a maximum value that's low enough that his point is proved regardless of how far below it the real value is. The survey design, reduced to a trivial example: Select all that apply - A: 100% select - B: 50% select - C: 12% select Suppose there were 100 people. There is no way to imagine overlap that leads to more than 12 people selecting C, as you claim.

lotsofpulp 7y ago

> There's only one thing HSAs are really good at, and that's creating a huge new tranche of money for Wall Street to suck fees out of. You can move HSA funds to an HSA at Fidelity and put it in FSKAX or FZROX at no fee.

mattrp 7y ago

Usually I see HSA’s combined with a high deductible plan so that the six figure medical bill is protected. We were on one when my daughter needed surgery (~$50k). We also had another child the same year ($20k), and all we paid was the $6k deductible which also came out of pre-tax money AND my employer contributed $3k to cover the premium. There were no bank fees involved. i am now self employed. Unfortunately I can not buy a high deductible or a HSA plan in my state post Obama care and my premiums in 2018 where $38k and this year have dropped to $32k. To be honest I kind of miss that $6k deductible.

lotsofpulp 7y ago
Which state? I’m very surprised an entire state would not have an HSA eligible option on healthcare.gov.
- EvanAnderson 7y ago
  I bought marketplace insurance from 2013 to 2018 in Ohio. The number of HSA-eligible plans dropped in that time period. For 2019 there were no HSA-eligible plans available in my county.
- mattrp 7y ago
  There is one but the premium is the same as the gold plan.
  - lotsofpulp 7y ago
    Gold means a “typical” population is expected to pay 20% while insurance company pays 80%. A plan can be gold and HSA eligible at the same time, it will just have lower out of pocket maximum and coinsurances. If you have enough cash to afford the deductible, you should always go for HSA as you can earn the tax free investment returns on the HSA funds. A gold non HSA and gold HSA both are designed for the insured to pay 20% and insurance company to pay 80%, but the HSA will let you invest $3,550/$7,100 single/family, and that can add up over the years. If you started it around 10 years ago, you could realistically have over $100k in the HSA for family plans.