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It is when you take into account the tax advantages of an HSA. If you're like me and can shake off a few grand medical expense out of pocket, suddenly it's the

It is when you take into account the tax advantages of an HSA. If you're like me and can shake off a few grand medical expense out of pocket, suddenly it's the best plan. I have a HDHP and paid less than $10k all year for my family's medical expenses and we had a freaking baby lol.

BobaFloutist 1y ago
Right, but it's also nuts that a lot of people are on a health insurance plan that encourages avoiding medical care because it offers tax-advantaged investing. You get how that's nuts, right?
- whateveracct 1y ago
  It doesn't seem nuts to me? I have a good emergency fund and a stable job and no big debts (cuz I'm good with money generally), so I can choose to use my health insurance to make a little more money. That's only fair given all the pre-work I did to set it up for myself.
  - BobaFloutist 1y ago
    Of course it's fair, my criticism isn't with your outcome but with designing an insurance plan to work this way. It's weird to tie your little extra money to your health insurance plan.
    - whateveracct 1y ago
      That's why it's not the only option. It's a benefit not a restriction. The powers that be saw an opportunity for insurers to cover less and insurees to leverage that into a different benefit. It's all just about shifting risk around and taking a little off the top. It's a nice incremental addition to the existing system. Way more feasible than changing the system.
      - BobaFloutist 1y ago
        But the additional benefit is a tax benefit, also known as "all the other taxpayers subsidize this behavior"
        whateveracct 1y ago
        They're (slightly) subsidizing the fact that I am covering more of my medical expenses out of pocket. Remember it's only tax free if I eventually spend it on health care. Feels like the equivalent of other things we give tax benefits for. Various things for your and your dependents' well being.
- kccqzy 1y ago
  Exactly. I also think conflating health insurance and investment is a terrible idea. It should just be a simple credit system for accumulating unused deductible.
ryandrake 1y ago
> tax advantages of an HSA The minuscule tax advantage here is that 1. you're paying for your health care costs with pre-tax dollars, but you can generally still deduct these even without an HSA, so +0 advantage there, and 2. you are allowed to invest the savings, and gains are not taxed at the federal level (but may be taxed at the state level), so the advantage here is your savings account size x your effective tax rate. The premiums for a HDHP also tend to be slightly less than PPO or other plans. For most of us that tax advantage is tiny. I would rather have an insurance plan that actually covered my costs minus a copay, even better one without a copay, even better Medicare For All where I don't even have to worry about an insurance company or pay insurance premiums. HDHP + HSA is pretty much the worst of the bunch.
- whateveracct 1y ago
  > for most of us yeah so for most of you, don't do it? I like that I can stuff away $7k+ I'd be stuffing away anyways tax free. And all I have to do is keep a responsible emergency fund.
  - ryandrake 1y ago
    So, in other words, the typical American "Hope and pray that my health costs don't outrun my savings/investment rate" philosophy. Different strokes for different folks, hope it works out for you.
    - whateveracct 1y ago
      My health care costs have a pretty clear soft upper bound given how HDHPs (and most plans) are structured. Deductible and out of pocket max makes it easy to be responsible and budget into an emergency fund. In terms of non-exceptional costs, I'd say I spend about as much on medical bills every year as I do keeping my cars in good shape. Less than my house and less than I spend on hobby stuff, my cats' vet, or jewelry haha.

BobaFloutist 1y ago

Right, but it's also nuts that a lot of people are on a health insurance plan that encourages avoiding medical care because it offers tax-advantaged investing. You get how that's nuts, right?

whateveracct 1y ago
It doesn't seem nuts to me? I have a good emergency fund and a stable job and no big debts (cuz I'm good with money generally), so I can choose to use my health insurance to make a little more money. That's only fair given all the pre-work I did to set it up for myself.
- BobaFloutist 1y ago
  Of course it's fair, my criticism isn't with your outcome but with designing an insurance plan to work this way. It's weird to tie your little extra money to your health insurance plan.
  - whateveracct 1y ago
    That's why it's not the only option. It's a benefit not a restriction. The powers that be saw an opportunity for insurers to cover less and insurees to leverage that into a different benefit. It's all just about shifting risk around and taking a little off the top. It's a nice incremental addition to the existing system. Way more feasible than changing the system.
    - BobaFloutist 1y ago
      But the additional benefit is a tax benefit, also known as "all the other taxpayers subsidize this behavior"
      - whateveracct 1y ago
        They're (slightly) subsidizing the fact that I am covering more of my medical expenses out of pocket. Remember it's only tax free if I eventually spend it on health care. Feels like the equivalent of other things we give tax benefits for. Various things for your and your dependents' well being.
kccqzy 1y ago
Exactly. I also think conflating health insurance and investment is a terrible idea. It should just be a simple credit system for accumulating unused deductible.

ryandrake 1y ago

> tax advantages of an HSA The minuscule tax advantage here is that 1. you're paying for your health care costs with pre-tax dollars, but you can generally still deduct these even without an HSA, so +0 advantage there, and 2. you are allowed to invest the savings, and gains are not taxed at the federal level (but may be taxed at the state level), so the advantage here is your savings account size x your effective tax rate. The premiums for a HDHP also tend to be slightly less than PPO or other plans. For most of us that tax advantage is tiny. I would rather have an insurance plan that actually covered my costs minus a copay, even better one without a copay, even better Medicare For All where I don't even have to worry about an insurance company or pay insurance premiums. HDHP + HSA is pretty much the worst of the bunch.

whateveracct 1y ago
> for most of us yeah so for most of you, don't do it? I like that I can stuff away $7k+ I'd be stuffing away anyways tax free. And all I have to do is keep a responsible emergency fund.
- ryandrake 1y ago
  So, in other words, the typical American "Hope and pray that my health costs don't outrun my savings/investment rate" philosophy. Different strokes for different folks, hope it works out for you.
  - whateveracct 1y ago
    My health care costs have a pretty clear soft upper bound given how HDHPs (and most plans) are structured. Deductible and out of pocket max makes it easy to be responsible and budget into an emergency fund. In terms of non-exceptional costs, I'd say I spend about as much on medical bills every year as I do keeping my cars in good shape. Less than my house and less than I spend on hobby stuff, my cats' vet, or jewelry haha.