Health Savings Accounts- a Bush Victory

[glockmail]

A Health Savings Account (HSA) is a tax-advantaged medical savings account available to taxpayers in the United States who are enrolled in a High Deductible Health Plan (HDHP). The funds contributed to the account are not subject to income tax, but can only be used to pay for qualified medical expenses. HSAs were established as part of the Medicare Prescription Drug, Improvement, and Modernization Act which was signed into law by President Bush on December 8, 2003. These accounts are a component of Consumer Driven Health Plans.

This is an improvement over the Medical Savings Account system, as the excess funds are allowed to roll over from previous fiscal years and remain the property of the employee. In fact, the excess funds can be used similar to an IRA account.

http://en.wikipedia.org/wiki/Medical_Savings_Account

Looks like the Bush Administration solved the Health Care Crisis with a system that lowers costs for consumers, helps the insurance industry to be more competitive, let's consumers control their funds and make their own choices, allows consumers to pay for medical expense tax free, and keeps the guv'mint out of the process. No wonder the MSM hasn't said a word about this.

 

[90K]

I don't mean to be such a stick in the mud, but this is a short teerm fix unless the future administrations don't get a hold of this idea. in other words this could run amuck if some private group doesn't oversee things and keep it in check. I mean it took what 16 years plus to get this answered with a actual plan?

 

[jasendorf]

All these things do is embolden insurance companies to foist more of the health-care burden on workers under the guise of pre-tax deductible expense. Employers love them because they can act as if the higher co-pays they slowly are accepting from insurers to keep their costs down are being offset by these accounts when in reality it all still boils down to lower compensation being quietly hidden in these new costs to workers.

 

[The ClayTaurus]

All these things do is embolden insurance companies to foist more of the health-care burden on workers under the guise of pre-tax deductible expense. Employers love them because they can act as if the higher co-pays they slowly are accepting from insurers to keep their costs down are being offset by these accounts when in reality it all still boils down to lower compensation being quietly hidden in these new costs to workers.

Got any proof, with say, like, some numbers? I have an HSA and would be interested in such a thing if it were actually true.

 

[glockmail]

All these things do is embolden insurance companies to foist more of the health-care burden on workers under the guise of pre-tax deductible expense. Employers love them because they can act as if the higher co-pays they slowly are accepting from insurers to keep their costs down are being offset by these accounts when in reality it all still boils down to lower compensation being quietly hidden in these new costs to workers.

Employers don't pay for health care: workers do. Just like the employer doesn't pay the 2nd half of Social Security/ Medicare. These are all employment costs that you, the emploee, have to earn in order for the employer to be able to afford these costs. In other words, if you "gross" $10, your employer has to pay benefits and taxes over that amont, and if he didn't have to pay them, you would "gross" $14 or $15.

 

[jasendorf]

I have an HSA as well... so don't think I'm oblivious to their draw.

And, glock is right, employees do pay for their health insurance as part of their total compensation. The thing that irks me is when employers change the levels without offsetting the difference with proper compensation.

If the employer gets a deal on its insurance rates, they keep the change. If they take a hit on their insurance rates, they pass along the cost. Good business? Perhaps. Really good business if workers are too stupid to realize when this happens that they are getting screwed? Definitely!

The rates employers incur is directly related to the plans they offer and the number of enrollees in those plans. If they change plans from one year to the next which save them significantly without foisting a greater burden of healthcare to their workers unless they increase other compensation to those workers... that's to be applauded. But, what is more often the case is that they save with little things... like a $5 increase in co-pay. If they do this without compensating the employee who will pay that co-pay they have effectively lowered that employee's compensation. This is sometimes pretty noticeable. Enter HSAs.

HSAs allow employers to directly withdraw pre-tax dollars from a paycheck and deposit them into an account for paying co-pays, medicines, etc. Medical expenses. Oftentimes the service which facilitates this (by companies such as WageWorks, the administrator of my company's HSA) issue a debit card of sorts to withdraw from that. And, as with taxes, money we don't see oftentimes becomes forgotten. It has often been argued that if everyone had to write a check for the taxes they pay once a year, there'd be a hell of a lot more angry people over taxes. I submit that the same is true of these HSAs.

As for information on where co-pays are heading... check out this report from the Kaiser Foundation:
http://www.kff.org/insurance/7527/index.cfm

Here's some numbers to look at:

Since the year 2000, health insurance premiums have grown by 87%, compared with cumulative inflation of 18% and cumulative wage growth of 20%. During this period, the percentage of employers offering health benefits has fallen from 69% to 61%, and the percentage of workers covered by their own employer also has fallen.

Despite these cost pressures, relatively few employers offering health benefits report that they are very likely or somewhat likely to drop coverage (6%) or limit eligibility (6%) in the next year, although larger percentages report that they are very or somewhat likely to increase what employees pay for coverage (49%), increase plan deductibles (39%), increase copayments or coinsurance for office visits (39%), or increase worker payments for prescription drugs (39%). (emphasis added by me)

http://www.kff.org/insurance/7527/upload/7528.pdf

If these companies increase these costs to workers without, in turn, compensating them in their paycheck (I think it's fairly safe to say that very few will), then the amount of total compensation has dropped... in a very sly way, one which is much harder to notice than "we're going to cut $1000 dollars out of your paycheck this year."