top 10 problems with HSA's

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    Top 10 Problems with HSAs
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    1. HSAs do not control costs. They shift costs from the insurers to the patient. They also have no or minimal impact on the 10% of the population that account for 69% of healthcare spending.
    2. HSAs do nothing to increase access or reduce the number of uninsured.
    3. HSAs are combined with limited, high deductible health plans, exposing consumers to high out-of-pocket costs which leads to rationing based on ability to pay.
    4. HSAs encourage consumers to gamble with their health. Those experiencing an illness or injury may suddenly find their high deductible plan which may also include caps on payments for services subjects them to massive debt and financial ruin.
    5. HSAs discourage prevention. Patients are more likely to forego primary and preventive care, and to delay other needed care. That can lead to worsened health outcomes, as well as more expensive healthcare costs.
    6. HSAs increase administrative costs, such as the servicing fees paid to the financial institutions to manage the accounts-beyond the 30% share of administrative costs already consumed by private
    health care for billing, other paperwork, and profits.
    7. HSAs deplete funds from the insurance risk pool. While the poor and sick quickly deplete any HSA funds, the rich and healthy retain their unspent money which would have previously gone into the pool to help subsidize care for the sick. The dollars removed from the system will likely need to be replaced by increasing premiums, additional other fees or cutting benefits for those still in.
    8. Many consumers with HSAs are dissatisfied. A June, 2005 study by the pro-HSA McKinsey consulting
    firm found 56% of those with HSAs were less satisfied than with their previous health plans.
    9. HSA rules about what they can cover and what expenses apply to the deductible are so complicated
    that Bruce Bodaken, CEO of Blue Cross and Blue Shield of California, said he can't understand his own plan.
    10. HSAs amount to another tax break for the wealthy who have already been showered with tax breaks by the Bush Administration. The right to pay medical expenses with pre-tax income is worth a lot more to high-income individuals than to low income people who lack the ability to place the

    maximum permitted amount in their savings accounts.
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  2. Visit HM2VikingRN profile page

    About HM2VikingRN

    Joined: Apr '06; Posts: 11,159; Likes: 11,316

    13 Comments

  3. by   DarrenWright
    Quote from HM2Viking
    HSA's were invented by the democrats, and no-one is required to put their money in them.
  4. by   pickledpepperRN
    It doesn't matter which party they are not good policy. Many states and the Federal Government promote them. - http://www.ncsl.org/programs/health/hsa.htm

    The question is how do we prevent economic disaster due to illness and injury? - http://content.healthaffairs.org/cgi...lthaff.w5.63v1

    Nobody's safe. That's the warning from the first large-scale study of medical bankruptcy.
    Health insurance? That didn't protect 1 million Americans who were financially ruined by illness or medical bills last year. - http://www.washingtonpost.com/wp-dyn...-2005Feb8.html
  5. by   DarrenWright
    Quote from spacenurse
    It doesn't matter which party they are not good policy. Many states and the Federal Government promote them.

    The question is how do we prevent economic disaster due to illness and injury?

    Nobody's safe. That's the warning from the first large-scale study of medical bankruptcy.
    Health insurance? That didn't protect 1 million Americans who were financially ruined by illness or medical bills last year. - http://www.washingtonpost.com/wp-dyn...-2005Feb8.html
    It does matter who promoted them when criticism of them is paired with administration-specific criticism.

    It is not possible to create the utopia where economic disaster is eliminated.

    And this thread was specific to HSA's and criticizing them; if you don't like them, don't invest. It's an investment, it's OPTIONAL, and the tax-breaks are not specific to wealthy people. Everyone who chooses to ADD the HSA to their health benefits does so at NO LOSS of income, and receives the same tax break (according to their tax rate). It makes no sense to criticize them, and then suggest that someone else needs to identify an alternative. Truth is that HSA's are actually reasonable tools for folks who know how to use them.

    I work with a lot of nurses...none of whom are wealthy...and many of them use their HSA for things like laser eye surgery, cosmetic dentistry, and things like chiropractors...none of which would be paid for under a single-payor system.
  6. by   pickledpepperRN
    Both major parties promote HSA'a and pass laws regading them.
    I think it is important to educate people about them.
    The one promoted by my employer makes money for the bank that administers it. The worker has to choose in November how much to pay into it before taxes. Then if they don't get sick and spend it on co-pays, medications and such they lose it.

    HSA'a are part of the plan both parties in my state as well as others to insure more people with disaster only HIGH deductable policies supplemented by a HSA. The very people who cannot afford insurance now will have no choice but to buy one of those policies. They will be less likely to seek care early because they are already struggling to pay for necessities. SO they deplete what is in the HSA and have to go bankrupt.

    I know there will never be a utopia. I just hope for a discussion that includes trying to find a way to keep a cancer diagnosis, MI, or serious injury from forcing a family into bankrupcy.

    Needed care including chiropractic, vision, and dentistry will be provided if SB 840 is signed by the governor in California this year - http://www.guaranteedhealthcare.org/...eliability-act

    Health Savings Accounts (HSAs) were established in federal law in December 2003, when President Bush signed the Medicare Prescription Drug Improvement and Modernization Act of 2003 (P.L. 108-173). HSAs are tax-free financial accounts that are designed to help individuals save for future health care expenses. HSAs also are an expansion and evolution of Medical Savings Accounts (MSAs), which were launched in over 20 states and in a federal pilot program in the mid-1990s.
    State laws and regulations passed in 2004-06 now play a role in the use of health savings accounts, through insurance regulation, measures that encourage development or offering of HSAs and/or laws that provide state tax exemptions to parallel federal tax treatment. HSA laws and commercial marketing usually are closely tied to High-Deductible Health Plans and are referred to as "Consumer-Directed Health Plans."...
    http://www.ncsl.org/programs/health/hsa.htm
    ...President Bush Has Proposed Expanding Health Savings Accounts (HSAs). "HSAs allow people to save money for health care tax-free, and to take these accounts with them if they move from job to job." President George W. Bush, January 23, 2007 - http://www.whitehouse.gov/stateofthe...ealthcare.html
  7. by   DarrenWright
    Quote from spacenurse
    I think it is important to educate people about them.
    The one promoted by my employer makes money for the bank that administers it. The worker has to choose in November how much to pay into it before taxes. Then if they don't get sick and spend it on co-pays, medications and such they lose it.

    HSA'a are part of the plan both parties in my state as well as others to insure more people with disaster only HIGH deductable policies supplemented by a HSA. The very people who cannot afford insurance now will have no choice but to buy one of those policies.

    I know there will never be a utopia. I just hope for a discussion that includes trying to find a way to keep a cancer diagnosis, MI, or serious injury from forcing a family into bankrupcy.

    Needed care including chiropractic, vision, and dentistry will be provided if SB 840 is signed by the governor in California this year - http://www.guaranteedhealthcare.org/...eliability-act
    1. Of course these plans make money for the agencies that host them, otherwise you won't get anyone to host them. And while they are making money for the "bank," they are making money for the consumer, generally at a higher rate than the bank is making. Even putting this money in the safest, most conservative vehicle right now will make around 4% for the CONSUMER, while the bank or fund administrator will charge a less-than 2% fee. For example, a Vanguard HSA would cost about 0.7%...less than 1%.

    2. Pay close attention to this part; the plan being offered by your employer is flawed at the provider level (your employer), not at the legislative level. I actually find it hard to believe that they "lose it," because money left over in an HSA, as they were legislatively designed, is supposed to be held over to the next year...no maximum limit. In fact, any money contributed to an account, regardless of the depositor, immediately becomes the PROPERTY of the consumer and there is a violation of law if someone is taking it away. Additionally, if the consumer loses eligibility to contribute, the funds still remain available to the consumer.

    You do NOT BUY an HSA...you invest in it. And 100% of it belongs to the participant on day one. And one of the reasons these were designed was to accomodate people who didn't want to purchase private insurance and enrich insurance companies...you make it sound like it was an unintended side effect. BTW...this is very similar to the way the Singapore system functions; high individual/personal accountability.

    Kudo's to California; I imagine Chiropractors will choose to opt out of any single-payor plan because the reimbursements will be substandard. And I wasn't talking about standard dental or vision, I was talking about non-essential interventions like cosmetic dentistry and laser eye surgery; I seriously doubt the California single-payor system will cover these items...and I also suspect this will put California into a severe budget crisis in just a few years given the number of illegals.

    If you think you need to educate folks on HSA's, you really need to learn more about them.
  8. by   ZASHAGALKA
    HSA are a good PART of the solution.

    If you want to take them apart as not being able to solve all the problems of healthcare, in their own right, fine. You'd be technically correct, but you miss the point and that makes your analysis wrong.

    The POINT is that they can be a part of the solution. Not by themselves, but in conjunction with catastrophic insurance and a move away from the basically pre-paid care that so many of you are complaining is making insurance companies rich.

    A tax free means to pay for out of pocket care WILL dramatically lower prices as the price of routine healthcare can no longer be inflated by overdemand from consumers that don't bother and aren't required to consider the cost.

    HSAs serve as a very potent buffer to place the price of care directly in the hands of the consumer without directly overburdening that consumer.

    ~faith,
    Timothy.
    Last edit by ZASHAGALKA on May 22, '07
  9. by   pickledpepperRN
    Quote from DarrenWright
    1. Of course these plans make money for the agencies that host them, otherwise you won't get anyone to host them. And while they are making money for the "bank," they are making money for the consumer, generally at a higher rate than the bank is making. Even putting this money in the safest, most conservative vehicle right now will make around 4% for the CONSUMER, while the bank or fund administrator will charge a less-than 2% fee. For example, a Vanguard HSA would cost about 0.7%...less than 1%.

    2. Pay close attention to this part; the plan being offered by your employer is flawed at the provider level (your employer), not at the legislative level. I actually find it hard to believe that they "lose it," because money left over in an HSA, as they were legislatively designed, is supposed to be held over to the next year...no maximum limit. In fact, any money contributed to an account, regardless of the depositor, immediately becomes the PROPERTY of the consumer and there is a violation of law if someone is taking it away. Additionally, if the consumer loses eligibility to contribute, the funds still remain available to the consumer.

    You do NOT BUY an HSA...you invest in it. And 100% of it belongs to the participant on day one. And one of the reasons these were designed was to accomodate people who didn't want to purchase private insurance and enrich insurance companies...you make it sound like it was an unintended side effect. BTW...this is very similar to the way the Singapore system functions; high individual/personal accountability.

    Kudo's to California; I imagine Chiropractors will choose to opt out of any single-payor plan because the reimbursements will be substandard. And I wasn't talking about standard dental or vision, I was talking about non-essential interventions like cosmetic dentistry and laser eye surgery; I seriously doubt the California single-payor system will cover these items...and I also suspect this will put California into a severe budget crisis in just a few years given the number of illegals.

    If you think you need to educate folks on HSA's, you really need to learn more about them.

    I didn't explain clearly enough what I meant.
    Like other states my states is considering a mandate that all must purchase health insurance. It would be illegal not to.
    When I typed, "BUY" it referred to "High-Deductible Health Plans". Our governot believes they will offer affordable insurance on conjunction with a HSA. But the same people who can only afford the lowest cost high deductable plan for their family will not have a lot to put into a HSA.

    They could end up bankrupt due to a serious illness or injury. Especially if it happens to the working adult.
  10. by   ZASHAGALKA
    Quote from HM2Viking
    1. HSAs do not control costs. They shift costs from the insurers to the patient. They also have no or minimal impact on the 10% of the population that account for 69% of healthcare spending.

    2. HSAs do nothing to increase access or reduce the number of uninsured.

    3. HSAs are combined with limited, high deductible health plans, exposing consumers to high out-of-pocket costs which leads to rationing based on ability to pay.

    4. HSAs encourage consumers to gamble with their health. Those experiencing an illness or injury may suddenly find their high deductible plan which may also include caps on payments for services subjects them to massive debt and financial ruin.

    5. HSAs discourage prevention. Patients are more likely to forego primary and preventive care, and to delay other needed care. That can lead to worsened health outcomes, as well as more expensive healthcare costs.

    6. HSAs increase administrative costs, such as the servicing fees paid to the financial institutions to manage the accounts — beyond the 30% share of administrative costs already consumed by private health care for billing, other paperwork, and profits.

    7. HSAs deplete funds from the insurance risk pool. While the poor and sick quickly deplete any HSA funds, the rich and healthy retain their unspent money which would have previously gone into the pool to help subsidize care for the sick. The dollars removed from the system will likely need to be replaced by increasing premiums, additional other fees or cutting benefits for those still in.

    8. Many consumers with HSAs are dissatisfied. A June, 2005 study by the pro-HSA McKinsey consulting firm found 56% of those with HSAs were less satisfied than with their previous health plans.

    9. HSA rules about what they can cover and what expenses apply to the deductible are so complicated that Bruce Bodaken, CEO of Blue Cross and Blue Shield of California, said he can’t understand his own plan.

    10. HSAs amount to another tax break for the wealthy who have already been showered with tax breaks by the Bush Administration. The right to pay medical expenses with pre-tax income is worth a lot more to high-income individuals than to low income people who lack the ability to place the maximum permitted amount in their savings accounts.
    1. As part of a reform of healthcare, HSAs have great potential to reduce costs. The biggest problem with healthcare today is that it is 3rd party financed. If consumers don't care what a thing costs, because they don't directly pay the cost, then demand is skewed against supply. The result is inevitably dramatic rises in the cost of the 3rd party plan. Duh. But lets blame the 3rd party payors (Insurance companies) because the system is designed to disregard costs. Oh, and lets make SURE we don't devise a system that actually DOES take the cost of care into account.

    2. HSAs, as part of a plan that would lead to actual health insurance instead of today's prepaid healthcare, would indeed lead to more coverage as health insurance - real insurance that covers major care and not routine care - became affordable. It would lead to more people being able to choose care in their budgets, and it would CERTAINLY make it easier for States to assist in the provision of such coverage. To say otherwise misrepresents the case for HSAs.

    3. HSAs are designed themselves to BE the buffer for high out of pocket costs. the POINT of HSA is to provide a bridge to a catastrophic plan. As far as rationing care based on cost. Bingo! That's what healthcare needs. You either ration it based on cost or ration it based on availability. In this case, HSA acts as a buffer for that cost. This is as opposed to the current system, which rations by cost by making the cost of insurance too high. HSA are a better alternative than no insurance/coverage and a MUCH better alternative than gov't restricted healthcare with months long waiting lists.

    4/5. Read #4/#5 above. Do you understand with this says. It says: you cannot be trusted with your own care and so the gov't MUST make your decisions for you. WOW. What an incentive to NOT support the position of the linked website above. I don't trust the gov't anymore than I could personally pay off the national debt. I certainly don't want them to manage my care. AS IF they would have my best interests at heart.

    6. HSA would reduce administrative costs as consumers handled their own healthcare transactions instead of multiple insurance forms and other paperwork.

    7. HSAs, in combination with catastrophic plans, eliminates the current risk pool. It places EVERYBODY on equal footing as far as catastrophic insurance is concerned and maximum caps that kick the consumer over to the catastrophic plan helps to leverage the cost for high users across the entire insurance pool.
    It is a much better plan for those that need to use the system more and manages overall risk across the entire ocean of the nation instead of in limited 'pools'.

    8. It's a nice trick to say that current users of a limited system can provide realistic feedback of a proposed system. I have a HSA. I hate the administrators of that system. But, that account has nothing to do with the role that HSAs could play in comprehensive insurance reform.

    9. Complicated gov't rules as a reason not to embrace a healthcare proposal???????? AMEN. But, that rules out gov't restricted healthcare, altogether. Thank you very much as you have made my argument, for me.

    10. How is giving every citizen a tax free account a break for the rich only? This is just political hyperbole. If you want to get those on the left energized, blame it on the rich. Amen and pass the trust funds. . .

    ~faith,
    Timothy.
    Last edit by ZASHAGALKA on May 23, '07
  11. by   ZASHAGALKA
    Quote from spacenurse
    I didn't explain clearly enough what I meant.
    Like other states my states is considering a mandate that all must purchase health insurance. It would be illegal not to.
    When I typed, "BUY" it referred to "High-Deductible Health Plans". Our governot believes they will offer affordable insurance on conjunction with a HSA. But the same people who can only afford the lowest cost high deductable plan for their family will not have a lot to put into a HSA.

    They could end up bankrupt due to a serious illness or injury. Especially if it happens to the working adult.
    HSA is a bridge towards the catastrophic plan. It is obviously a better bridge for some than others. Here's the thing. This is where need can be directly addressed. It eliminates people that don't buy insurance because they don't WANT to spend the money because they are 20 something and healthy and allows the focus to be on those that need the help.

    ~faith,
    Timothy.
  12. by   pickledpepperRN
    Quote from ZASHAGALKA
    HSA is a bridge towards the catastrophic plan. It is obviously a better bridge for some than others. Here's the thing. This is where need can be directly addressed. It eliminates people that don't buy insurance because they don't WANT to spend the money because they are 20 something and healthy and allows the focus to be on those that need the help.

    ~faith,
    Timothy.
    Makes sense.
    Too many who make good money don't choose to buy insurance because they don't think they will need it.
    Do you approve of a mandate to have health insurance?

    I don't because the insurance companies will just continue to deny care.
  13. by   RN4MERCY
    Quote from DarrenWright
    ...and I also suspect this will put California into a severe budget crisis in just a few years given the number of illegals.


    Please, these are human beings, unique individuals who laugh and cry and have hopes and dreams just like you do. Immigration policy is a political issue; providing basic, medically necessary health care to people in need is a public health issue. Don't perpetuate the myth that our "budget" problems are due to having a large population of undocumented immigrants.

    From Miss Lillian Wald, the founder of Public Health Nursing: The House on Henry Street, I quote:

    "The industry of cloak and suit-making has been to a large extent developed by the immigrants themselves. When the stranger looks upon the loft buildings in other parts of the city, gigantic beehives with the swarms of workers going in and out, he seldom comprehends that great wealth has been created for the community by these humble workers."

    "The immigrant brings in a steady stream of new life and new blood to the nation. The un-skilled (sic) have made possible the construction of great engineering works, have helped to build bridges and roadways above and under ground."

    "Our experience has convinced us that in the interest of the state itself the future citizens should be made to feel that protection and fair treatment are accorded by the state." The greater number of immigrants who come to us are adults for whose upbringing this country has been at no expense."

    "What we are to the immigrant in our civic, social, and ethical relations is quite as important as what he is to us. We risk destruction of the spirit--that element of life that makes it human--when we disregard our neighbor's personality."

    And, from the peer reviewed, American Journal of Public Health
    Immigrants do not overwhelm healthcare - study

    Mon Jul 25, 2005 5:16 PM ET
    WASHINGTON (Reuters) - Immigrants are not swamping the U.S. health care system and use it far less than native-born Americans, according to a study released on Monday.

    The study, published in the American Journal of Public Health, found that immigrants accounted for 10.4 percent of the U.S. population but only 7.9 percent of total health spending and 8 percent of government health spending.

    Health spending by the government, insurers and patients themselves averaged $1,139 per immigrant compared to $2,564 for non-immigrants. Thirty percent of immigrants used no health care at all in the course of the year.

    Immigrant children spent or cost $270 that year, compared to $1,059 for native-born children.

    “Our study lays to rest the myth that expensive care for immigrants is responsible for our nation’s high health costs. The truth is, immigrants get far less care than other Americans,” Dr. Sarita Mohanty, who led the study while she was at Harvard University and who is now at the University of Southern California, said in a statement.

    “Further restricting their eligibility for care would save little money and place many immigrants — particularly children — at grave risk. Already, many immigrant children fail to get regular checkups and as a result more end up needing emergency care, or get no care at all.”

    The researchers used U.S. government data taken in a 1998 survey from U.S. residents, including natural-born citizens, immigrants who had become citizens, temporary residents and illegal aliens.

    “The only case in which immigrants’ costs for health care were higher than U.S.-born children was in emergency department visits ($45 vs. $18 per capita),” the researchers said in a statement.

    Most immigrants had health insurance, the survey found. It said 58 percent of immigrants had private insurance, compared to 74.9 percent of native-born U.S. citizens, and 17.3 percent of immigrants had some sort of public insurance such as Medicare or Medicaid, compared to 15 percent of natives.

    “Our data indicates that many immigrants are actually helping to subsidize care for the rest of us,” Dr. Steffie Woolhandler, a founder of Physicians for a National Health Program and one of the authors of the study, said in a statement.

    “Immigrant families are paying taxes — including Medicare payroll taxes — and most pay health insurance premiums, but they’re getting only half as much care as other families.”

    “We constantly hear anti-immigrant extremists, elected officials and media commentators making baseless claims about how immigrants are contributing to our nation’s high health care costs,” Rep. Luis Gutierrez, an Illinois Democrat and chair of the Congressional Hispanic Caucus Immigration Task Force, said in a statement.

    “This comprehensive new study shows just how unfounded these allegations are and I hope it will permanently put to rest these misinformed and misguided myths.”
    http://www.pnhp.org/news/2005/july/i..._do_not_ov.php

    SB 840 Kuehl (California), HR 676 Conyers/Kucinich (National)
    Sensible, affordable, portable; Guaranteed Healthcare for All
    Last edit by RN4MERCY on Jun 15, '07
  14. by   DarrenWright
    It's not a myth.

    And if you don't think it is, ask the leaders of any trade union in California. And they are usually on your side when it comes to employment issues.

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