A guest post by Pioneer98
Many politicians are touting health savings accounts as a way to help with rising health care costs, including ones currently running for office in our area. As someone who will be switching to a one of these health plans in the near future, I wanted to share what I've learned about them.
The pitch: Consumers will get a pre-tax savings account they can save money in, similar to a 401K, to spend on health care. Their employer will also contribute some amount to it, also similar to a 401K. Politicians and businesses are saying these savings accounts will give consumers more power over how their health care insurance dollars are spent. The idea is that this will give consumers more choices and put more price pressure on providers to offer services at lower costs.
The fine print: They fail to mention that these type of savings accounts are only available with a "high deductible health plan". This is actually written into the tax code for these accounts. The deductible is going to be much, much higher than traditional plans (mine is going to be about 6 times higher). Another key difference between these plans and traditional plans is that there is no longer a co-pay. Instead of paying $15 for a doctor's visit or $5 for a prescription, you will pay full price out of your pre-tax savings account for all services (until your deductible is met, of course).
Some benefits: You will be allowed to deposit an amount up to your deductible into this account each year. If you do not spend all the money you save in a given year, whatever is left will roll over to the next year. This is an improvement over flexible spending accounts, which are normally "use it or lose it". Another benefit is that, generally, preventive doctor's visits will be covered 100%, although it's not entirely clear what happens if a preventive visit turns into a "treatment" visit.
The bottom line: Most insurance providers will still offer a sizeable discount if you keep your business "in network". This is actually the fatal flaw of these plans. It will be nearly impossible to find a service out-of-network that will beat the discounted in-network prices. This basically eliminates the chance for consumers to have "more choices", which was the whole purpose for these accounts in the first place. Someday these plans may eventually lead to true competition and "price pressure". But as long as insurance providers are in on both sides of the plan (offering the insurance as well as offering the services), health care costs are likely to continue to rise.
6 comments:
The accounts are not perfect, but it empowers the consumer more. More important, it puts more accountability on the consumer.
For the average folk, a trip to the emergency room is a rare occurence. But when your there, you see folks with goofy circumstances that don't warrant a visit.
Our problem, in my opinion, is health care is too open/accessible. Even to those without insurance or money.
Call me heartless, but a big solution to our health care challenge is a big dose of tough love.
I don't think emergency room visits are the problem. It's an aging population and availability of advanced (read: expensive) medical procedures. For example, it wasn't too long ago that things like bypass surgury were very rare, and now they are almost commonplace.
Let's not kid ourselves: These accounts were created as a way for employers to pass more costs to their employees. Period. It had nothing to do with corporations or politicians trying to create a better health care system. The jury is still out if they turn out to be better or worse than the crappy traditional systems, but, if you want to stay healthy, I wouldn't hold your breath.
So can't we just tell some of these old people, enough is enough. Move over, its time to die???
Check this out. UnitedHealth is one of the companies pushing these health savings accounts.
http://tinyurl.com/yyt5m6
I really hate the entire insurance system. I'm a college graducate and half the time I can't understand what I'm reading about it. It shouldn't take this much effort to fully understand your benefits.
My insurance has gotten slightly better over the last 2 years, but its still terrible. One of my problems with it is limited coverage on high expense things, IE, $50,000+ stuff. I mean, if I had to have some minor $5,000 surgery, it would be bad for my savings, but I could swing it. If I have to get an arm reattached or something, that's what I need insurance for.
I know that right now what I pay for premiums would more than pay for my doctor's visits in an average year, but what about the big stuff? Are there upper limits on these health savings plans?
No need to point it out to me WH... it just creates 2 spam posts instead of 1.
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