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From ObamaCare to TrumpCare: The “Fresh Hell” Of Health Savings Accounts

“What fresh hell is this?” –Dorothy Parker, on opening her door

By Lambert Strether of Corrente.

Speculating on what ObamaCare replacement bill the House Republican caucus will or should or might emit next week is a waste of time, despite the entertainment value of watching Republicans struggling to find ways to make a bad Republican plan — ObamaCare — even worse. [1] So I won’t join the fevered speculation. Instead, I’ll look briefly at a disgraceful piece of political theatre that took place yesterday, and then I’ll look at a really bad, neoliberal idea — sorrry for the reduncancy: Health Savings Accounts (HSAs). In his State of the Union Address, Trump said: “[W]e should help Americans purchase their own [health insurance] coverage through the use of tax credits and expanded health savings accounts.” I get griping in the guts when I think about tax credits — you can use ObamaCare’s tax credits in advance, which I doubt the Republicans will continue to do — so this post will be about HSAs. But first, the political theatre!

French Farce on Capitol Hill

The House Republican caucus says they have draft legislation for an ObamaCare replacement:

House Republicans were allowed to review the latest version of the overhaul measure Thursday — but only in a dedicated reading room, and they weren’t given copies to take with them, said one Republican lawmaker and a committee aide. The reason for the secrecy was to avoid leaks of the proposal.

The curtain rises to disclose Rand Paul, whinging:

Paul started the controversy Thursday morning when he tweeted that the House GOP’s ObamaCare bill was being kept under “lock & key” in a “secure location.”

“This is unacceptable. This is the biggest issue before Congress and the American people right now.”

Paul has serious objections to multiple key elements of the House GOP plan, and is threatening to oppose the measure if it includes them.

His objections include the use of a refundable tax credit, which he calls a new entitlement program.

Hilarity ensues as Paul rushes round Capitol Hill in search of the secure location:

What followed was a surreal scene on the first floor of the U.S. Capitol that quickly drifted toward farce. Trailed by a scrum of reporters and cameras, Paul sought—and was denied—entry into the Republican office where, he was told, the draft Obamacare bill was being kept.

“I think there’s a bill in there. It’s the secret office for the secret bill,” Paul told the reporters. As Paul was speaking, a House Democrat, Representative Paul Tonko of New York, slid past him to try to get into the office. But he, too, was denied. Tonko told reporters that staffers in the office had told him there was no bill inside.

The Democrats, having gotten into the act, proceed to steal the show. The normally sane and useful Sarah Kliff:

“There were comments that it was in room 157,” Hoyer said. “I’ve looked in the Ways and Means Committee Room, I’ve looked in the Ways and Means conference room, I’ve looked here, I’ve asked [Brady] if he knew where it was. And we cannot find the bill.”

Hoyer exited room H-157 trailed by a gaggle of reporters. He proceeded to walk to a very large bust of Abraham Lincoln nearby. He began to speak to it. “Mr. Lincoln, I can’t find the bill,” Hoyer said. “Mr. Lincoln, you said public sentiment is everything. But if the public can’t see the bill, they can’t give us their sentiment. That’s not regular order. That’s not democracy. That’s not good for our people. I know, Mr. Lincoln, you are as upset with your party as I am.”

So that’s where we are. That is where we are. Falling life expectancy in the United States, and that is where we are. And the “controversy” really is like a French farce, isn’t it? Something pre-revolutionary from Moliere or Beaumarchais. Bewigged, bewildered, and besotted protagonists in powdered wigs rush across the stage, trailed by obsequious underlings; doors slam closed, or suddenly open; there are many well-crafted speeches; the denouement in our case would presumably be seeming antagonists Trump and Clinton, he suitably flushed, she disheveled, emerging together from under the bed in what was a locked room, until it wasn’t, to a hearty round of applause. And on health care policy, that’s basically where we are, isn’t it?[2] So, on to this year’s bad idea whose time has come: Health Savings Accounts:

Policy Farce with HSAs

Consumer Reports (remember them?) explains what HSAs are and how they work:

A health savings account, or HSA, is a tax-exempt account available to people in certain high-deductible health plans to help pay for out-of-pocket medical expenses. To open an HSA today, your annual deductible must be at least $1,300 for an individual or $2,600 for a family—but deductibles in such plans can be, and often are, higher than that.

There are currently 20 million active HSA accounts in the U.S., but expansion plans could increase that number significantly.

About 24 percent of companies providing health benefits offer HSA-qualified high-deductible health plans. Some companies only offer high-deductible plans. However, some people with access to multiple employer-provided plans still choose these high-deductible plans because they prefer to pay lower premiums and assume they’ll stay healthy and save money this way. If your employer offers a high deductible health plan, it may also contract with a bank to host an HSA and will set up an account for you.

But you can also open up your own account. Hundreds of banks and credit unions offer HSAs, and because the interest rates they pay, fees they charge, and features they offer can vary, it can be worth it to shop around. And HSAs are portable…

You can direct your employer to contribute your pre-tax earnings into any HSA you designate, currently up to $3,400 a year for individuals and $6,750 for families.

“Whatever you contribute leads to immediate significant tax savings, and as long as you spend the money on qualified medical expenses, it’s tax-free when you use it,” says Greg Geisler, associate professor of accounting at the University of Missouri–St. Louis.

Such expenses include doctor visits, surgery, prescriptions, and physical therapy.

Keep in mind, also, that there’s no requirement to spend the money in an HSA in any given year…. That means that if you can afford your current health care expenses, investing in an HSA now can help fund your health care costs in retirement, when they are likely to be higher. If you don’t spend it all, your heirs will inherit the balance.

Sounds great, right? (I’ve helpfully underlined “out-of-pocket medical expenses” because I want to return to it.) My immediate thought on this — and I can’t find the answers in the few hours I had to do research — was that a maximum of $3,400/$6,750 (individuals/families) seems pretty low, considering the extremely high-deductible plans we see under ObamaCare, where the average deductible for an individual silver plan is $3,572 (and that’s before we get to the co-pays). It also occurred to me to question whether an HSA would be subject to asset seizure, and whether a college debt collector could put a lien on your HSA. Not that I’m paranoid. Readers?

But there are larger issues. First, as usual with these markets-first neoliberal schemes, the HSA manager may take a cut:

You’ll also need to take into consideration that some HSA providers charge a monthly fee or a transaction fee. These fees typically aren’t very high, but over the life of having a health savings account they can eat into the nest egg you’ve built up to protect yourself against unexpected medical expenses and for retirement.

The HSA scam, in other words, is the same scam the finance guys ran with 401k plans, at least qualitatively.

Second, the HSA presumes the ability to save; at this point we remember that most Americans have less than $1000 in savings, and 20% don’t even have a savings account. In other words, the benefits of HSAs skew toward the rich. Consumer Reports once more:

“The HSA-expansion proposals disproportionately benefit wealthy Americans by offering them tax breaks,” says Maura Calsyn[3], managing director of health policy at the Center for American Progress, a nonpartisan policy institute. “But they do nothing to increase coverage for poorer people who don’t have any extra money to put aside.”

Since HSAs require consumers to have extra income to store in the account, they provide little help to those already struggling to pay for their health insurance in the first place. Meanwhile, wealthier people who can stash money in an HSA could get a giant tax benefit.

Third, HSAs have not been shown to improve health care outcomes. Health Affairs:

In general, studies have found that HSAs combined with high-deductible plans can decrease overall use of services and costs, but there is little evidence yet that this results in improved health status. …. Studies have found that the impact of HSAs differs by income level, e.g., lower-income workers (and their dependents) were more likely than higher-income individuals to reduce their use of physician office visits and certain high-value services not subject to the deductible, such as influenza vaccinations and breast cancer screenings.

A second study confirms:

A recent study by the Employee Benefit Research Institute found a reduction in health care spending too – but not for good reasons. People reduced spending by not visiting the doctor or by not filling prescriptions, and this finding was more pronounced in lower-income earners. Low-income people with health-savings-account based plans had increased emergency department visits and higher rates of hospitalizations than those with traditional insurance plans.

For example, from USA Today, real estate broker Francisco Nieves-Taranto has an HSA:

Nieves-Taranto said he also has become a discerning shopper, favoring cheaper retail clinics over a doctor’s office for routine care. When he reinjured his knee playing basketball, the Windermere, Fla., resident avoided going back to the doctor because of the potential cost. Instead he stopped playing and used ice and stretching to give his knee time to heal. He’s now pain-free and figures he saved a few thousand dollars in medical bills.

And on his tombstone, the words: “He was a smart shopper.”

Fourth and finally — and here’s where we come to the “out-of-pocket expenses” part — HSAs assume a markets-first, neoliberal approach, where “savvy consumers” shop for health care, keeping costs down. There are at least two problems with this approach. To begin with, it hasn’t been shown, in any way other than anecdotally (as above), that “consumers” actually “shop” for health care. From the NBER, in “What Does a Deductible Do? The Impact of Cost-Sharing on Health Care Prices, Quantities, and Spending Dynamics” (Working Paper No. 21632):

We study consumer responsiveness to medical care prices, leveraging a natural experiment that occurred at a large self-insured firm which required all of its employees to switch from an insurance plan that provided free health care to a non-linear, high deductible plan. The switch caused a spending reduction between 11.79%-13.80% of total firm-wide health spending. We decompose this spending reduction into the components of (i) consumer price shopping (ii) quantity reductions and (iii) quantity substitutions, finding that spending reductions are entirely due to outright reductions in quantity. We find no evidence of consumers learning to price shop after two years in high-deductible coverage. Consumers reduce quantities across the spectrum of health care services, including potentially valuable care (e.g. preventive services) and potentially wasteful care (e.g. imaging services).

In other words, Nieves-Taranto was lucky, not smart. (And if want to see what you would have to do to really become a “smart shopper,” just read yesterday’s post on medical coding, because that’s what your receipts look like.)

Even worse, paying for your out-of-pcoket expenses with your HSA is an enormous tax on time (also a fundamental problem with ObamaCare itself). Forbes:

With health savings accounts, it is expected that patients will “shop” for care which will make doctors and pharmacies compete on price and service. Here are the holes in that theory:

  • Do you really want to spend your day calling around to doctor’s offices to find out who has the cheapest office visit? They will have to run your insurance card first to see the negotiated rates with your insurance company. So maybe you’ve saved a few dollars on the visit, but how much time have you wasted calling around and how much time has your doctor’s office wasted with people shopping for care? GOP, I have something to share with you, Plus, people want a doctor they trust. Are you really going to shop around when you’ve found a doctor you like?
  • How about shopping for your drugs? Doctors don’t have the time to call around to different pharmacies to find out the cheapest route for you. And once they call it in and you’ve arrived, do you want to go somewhere else? Between the nightmare of Pharmacy Benefit Managers, insurance companies calling the shots on where you can purchase prescriptions, and bogus “discount cards” – is the patient in the driver’s seat? The cards are stacked against you.
  • The majority of health care spending occurs when patients are very ill. When you are really sick or have a serious illness, are you going to shop for care? No, you will go to whomever you heard is the best doctor or wherever the ambulance takes you. So the only time you may be willing to shop is for minor health care expenses. Overall, this will dent spending very little and may actually increase spending in the long run because patients will avoid going to the doctor before an illness becomes a serious concern.
  • Face it –financial literacy and preparedness for retirement in this country is abysmal. What makes the GOP think their constituents will grasp health care spending with any more zeal? If your employer puts money in a health savings account and your car breaks down and you have no other savings, will you really save that money for health care or get your car fixed?

I recently had a very busy physician client complain about paying $1,000 for a month’s supply of insulin. I suggested he shop around and gave him some resources to try. He said, “I don’t have time for this and at this rate, I’ll hit my deductible pretty quickly anyway.” He has the resources to pay for his insulin – imagine if you are making minimum wage at two jobs and barely have the money to keep a roof over your head. Trying to control costs through consumer behavior is not practical.

Unless you want to make people, especially working class people, suffer, of course. So there’s that!

Conclusion

The part of Rand Paul will be played by Debbie Wasserman Schultz, en travesti. (The hair is the giveaway). The part of Steny Hoyer will be played by Ann Coulter, ditto. I don’t know if HSAs will do more than send a few million people to Pain City who might not be going to HappyVille with ObamaCare in any case, but they’re the sort of dumb idea that only a neoliberal — or a 10%er who can hire another professional to handle the paperwork — could love. It is what it is. We are where we are.

NOTES

[1] Has anybody raised the question of whether the Russia-linked Hermitage Foundation schemed to discredit the Democrats by laying the groundwork for ObamaCare, tampering with liberal progress toward a single payer system?

[2] “What do you call the act?” “The neoliberals!”

[3] I hate to quote anybody from CAP, including Calsyn, because they oppose Medicare for All, and so are just neoliberal Pepsi to the Republican’s neoliberal Coke.

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About Lambert Strether

Readers, I have had a correspondent characterize my views as realistic cynical. Let me briefly explain them. I believe in universal programs that provide concrete material benefits, especially to the working class. Medicare for All is the prime example, but tuition-free college and a Post Office Bank also fall under this heading. So do a Jobs Guarantee and a Debt Jubilee. Clearly, neither liberal Democrats nor conservative Republicans can deliver on such programs, because the two are different flavors of neoliberalism (“Because markets”). I don’t much care about the “ism” that delivers the benefits, although whichever one does have to put common humanity first, as opposed to markets. Could be a second FDR saving capitalism, democratic socialism leashing and collaring it, or communism razing it. I don’t much care, as long as the benefits are delivered. To me, the key issue — and this is why Medicare for All is always first with me — is the tens of thousands of excess “deaths from despair,” as described by the Case-Deaton study, and other recent studies. That enormous body count makes Medicare for All, at the very least, a moral and strategic imperative. And that level of suffering and organic damage makes the concerns of identity politics — even the worthy fight to help the refugees Bush, Obama, and Clinton’s wars created — bright shiny objects by comparison. Hence my frustration with the news flow — currently in my view the swirling intersection of two, separate Shock Doctrine campaigns, one by the Administration, and the other by out-of-power liberals and their allies in the State and in the press — a news flow that constantly forces me to focus on matters that I regard as of secondary importance to the excess deaths. What kind of political economy is it that halts or even reverses the increases in life expectancy that civilized societies have achieved? I am also very hopeful that the continuing destruction of both party establishments will open the space for voices supporting programs similar to those I have listed; let’s call such voices “the left.” Volatility creates opportunity, especially if the Democrat establishment, which puts markets first and opposes all such programs, isn’t allowed to get back into the saddle. Eyes on the prize! I love the tactical level, and secretly love even the horse race, since I’ve been blogging about it daily for fourteen years, but everything I write has this perspective at the back of it.

127 comments

    1. dianne shatin

      Enough is enough which is why Congressional ‘town halls’ are overflowing with crowds upon crowds of justifiably angry pissed off people… treated worse than sh*t by the tyrannical gatekeepers over our bodies and finances…. cut out the insurance cos. the damn pharmacy benefit managers and repeal those horrid regulations
      adopted by CMS!!!!!! Finito et a comedia! Every damn rep and senator will be sat on until they wake up to our reality and G*d spare those who continue along this path of tyranny and gate keeping… let them hassle with pharmacy benefit managers to finally be allowed a prescription necessary on a daily basis to stay ‘sane’ or ‘alive’. The grey panthers too rise and resist!

      1. Lambert Strether Post author

        > Enough is enough which is why Congressional ‘town halls’

        When this happens to Democrats, perhaps. I have yet to see evidence that the crowds have persuaded a single unpersuaded voter, which is unremarkable when “But Russia” is the only consistent message Democrats seem able to emit.

        1. Lord Koos

          It has happened to at least one Democrat. At any rate, the protests keep the pressure on and let our “leaders” know that people are paying attention.

          1. Code Name D

            But how long can voters keep it up? If they don’t have have time to shop, how much time do they have to attend town halls?

        2. watermelonpunch

          My rep is D and at the town hall several people shouted out “medicare for all” and “single payer” and he then had to address medicare for all and seemed a bit hesitant about what to say about it, but it was clear he realized he had to address it.

          I’m not saying this was tantamount to a bunch of picketers with signs & pitchforks holding the D’s feet to the fire. The press left before the Q&A session because they got bored. Everyone had sat patiently through the power point presentation about how his office can help people with Social Security and Veterans benefit issues and errors. And his dissertation on how the grants system works and how he has expert grant writing to bring projects home.

          I didn’t have my camera running at the time, and well, I was one of the people saying “medicare for all” at the time. But I did get part of his response on video & posted it on Youtube, where it’s pretty clear he was responding to a call for it.

          If you’re interested, you can find it on youtube ; search Matt Cartwright, Dickson City Pennsylvania Town Hall, Medicare for all

          He said he likes it. And blamed corporate sponsorship of tv ads against the public option as killing it.
          Seemed to me like he was sending the audience a clear message that anyone who wants this needs to work against tv ads and the people swayed by them, to be heard.

          People were also calling out about Part D drug price negotiations and the Canadian import issue.

          He made a few innuendos about the power of people making noise and contacting his office about issues.

          I don’t think it’s enough to sit back and hope reps do something of their own accord while somebody else is pestering them.
          It doesn’t work that way.
          I was once at my previous rep’s office (Lou Barletta) for help w/ a govt agency, and there was a guy who came in and was shouting about stuff. My spouse said he heard something or someone mentioned or whatnot, that this guy was in there weekly.

          Very concerned citizens contact their reps and pressure for something they want or don’t want. Then the rep has the responsibility for advocating for it and gaining more support for whatever that is.

          I imagine I’m not the only one who wrote an angry letter to Senator Bob Casey about him pooh-poohing no about that Canadian import bill because lo & behold, he’s now cosponsoring a new one with Bernie.

          I also found a great resource from Dean Baker on policies I can write to my state reps telling them that I want it. It’s full of stuff I’d like to see my state do. It’s called “Working Paper: Economic Policy in the Trump Era”… I was looking for just such a resource, and there Dean Baker fills the need. He’s great.

          1. watermelonpunch

            BTW, I don’t recall if anything about Russia was mentioned at the Town Hall. But I do recall people complaining about the Donald’s tax return I think.

            There were also people there expressing concerns for the plight of immigrants and worries about abuse of power. Enough so that Cartwright walked over to be framed by the flags in the room and made a clear statement about his belief in everyone’s rights to due process.

            There were also a few people shouting out concerns about the trans bathroom issue that was hitting the news that day. I don’t think this is a local issue, as I don’t think there is any bathroom legislation here in PA. However, there was enough noise made about it at the Town Hall that Cartwright made a statement he supported the gay marriage decision, and he admitted he wasn’t up on the bathroom issue.
            It was little funny because that’s when, and this was at the end of the town hall, he stared down at the podium and signed, and almost under his breath said something like, “Well I have my work cut out for me.”

            Again, I’m not saying this was some rally for progressive issues. But it also doesn’t sound like a complacent comment of a rep in a very safe gerrymandered district.
            Which, btw, our district map could be used as an encyclopedia visual aid explaining the origins of the word Gerrymander.

            And remember, this wasn’t in new england or some big city. This is northeastern pennsylvania.

  1. Disturbed Voter

    Nobody wants to pay the expenses of anyone else, except of course the Elite, who expect their expenses will be paid for, because they are deserving ;-(

    In a system where you pay for your own health care … you simply don’t show up at the doctor without a paper bag filled with $100 bills, or show up at the hospital without a suitcase filled with $100 bills. The alternative is to pay forward, for your own, or your family’s expenses. As an actuarial fact, health care insurance doesn’t work … because you can claim it more than once, and you are motivated to do so (not so with life insurance). Without massive constant government subsidy, health insurance is not a viable business. So either you have massive cronyism (ACA) or you have government provided care (cut out the middleman). Yes, health care in general, and drugs in the US in particular, could be cheaper. But they will never be free. Even with more reasonable per medical intervention costs, the model is still exponential.

    Expecting the other tax payer to pay for your medical care, or expecting your children to pay for your medical care … is immoral. Because if you are not responsible for your medical expenses, then you don’t get to live your life in freedom, you get a government diet, government exercise program, drug-free lifestyle whether you like it or not. Totalitarianism is the only option to a free market (not that the markets are free .. that is only an ideal).

    1. marym

      Every country that has universal healthcare by means of publicly funded not-for-profit insurance, employer-and/or-publicly funded not-for-profit insurance, or a publicly funded national healthcare system refutes your dire predictions. In the US despite privatization and profitization of some functions, Medicare and VA care refute them too.

      You may enjoy reading The Healing of America by T.R. Reid. It includes a survey and history of universal healthcare in several countries.

    2. marym

      Adding in reference to your mention of morality:

      In his book T.R. Reid quotes William Hsiao, Harvard economist and designer of health care systems around the world.

      “Before you can set up a health care system for any country,” Hsiao told me, “you have to know the country’s basic ethical values. The first question is: Do people in your country have a right to health care? If the people believe that medical care is a basic right, you design a system that means anybody who is sick can see a doctor. If a society considers medical care to be an economic commodity, then you set up a system that distributes health care based on the ability to pay….So the first question has to deal with a country’s ethics.”

      1. ScottW

        It’s all how you formulate the question. “Is heath care a basic right,” draws mixed responses. Why not ask, “Should people die because they don’t have enough money to pay for insurance and health care?”

          1. sierra7

            “Right” is not the right word…
            You (we) have to define what we mean by a progressive society.
            A “progressive” society cannot stand still; it is dynamic and must use all of the latest (in this case) medical knowledge to protect its citizens.
            Proper health care for a modern society is a national security effort.
            Nothing is “free”.
            We must name our priorities.
            To make universal health care from a for profit model in today’s world is obscene.
            (The same for public education)

        1. Disturbed Voter

          Rights have gone right out of sight … Lord Acton was right about people. So was Margaret Thatcher. I have a right to my trillion dollar platinum coin, and I demand that President Obama provide it!

          Does anyone see a toddler in this besides me?

          1. FluffytheObeseCat

            There are, apparently, many people who see freedom from want and freedom from fear as trivial non-rights. But it hasn’t always been that way and there isn’t a damn thing about it that’s admirable.

            1. Disturbed Voter

              You are speaking of the UN universal declaration of human rights. What army is going to enforce that. I don’t recognize the UN as a valid body (Saudi Arabia is the present chair on the human rights committee).

              But to be fair, I don’t accept the declaration of rights in the Declaration of Independence either.

              1. todde

                I think he’s talking about FDR and not the UN.

                And if you make it part of an ethical system, it doesn’t need an army.

          2. pebird

            You pay for your health care regardless, either with $ or with your health, sometimes with both.

            The motivation to avoid sickness is inherent and doesn’t require financial incentive (except apparently with the youth, who don’t want to pay for health insurance, and also think they are immortal, which is a bit odd, but a different discussion).

            Otherwise it is basically financial arbitrage on age and demographics, which is immoral IMHO.

    3. Adar

      Accepting that fellow citizens/human beings might just die because they have no money to pay for healthcare is also immoral. Is the freedom to die in misery the only kind? Jeez, has everyone forgotten what the concept of
      “shared risk pool”means? I’m glad some people feel good about being able to drag the sack of hard-earned $100 bills to the doc,but a system that doesn’t also take care of those without is no good at all.

    4. d

      i suspect that if we got rid of health insurance, and removed the government support for health care, prices might go down some, but its because very very few will be going to see the doctors. and we saw how that works exactly that way post 2008, because so many lost their jobs, along with their health insurance, they quit going all together for any reason short of dieing. now changing to a government supported health care system seems to work elsewhere why not in the US? is it because we Americans just cant control our selves? dont deserve health care? what is it that makes us unable to control the cost of care?

      could be cheaper? we pay $10-50 for saline or sea water? know what the most common thing on the planet? sea water. compare the price MRIs in other countries, to the US, we tend to be much much higher. then there is drugs, which cost more in the US, but are made on the production line.

      and oddly enough you can get the same structure from you employer/insurance company too. cause they could restrict whether your conditions get covered or not, based on what you do

      but that really depends on if employers actually continue to offer health insurance, as it, just barely more than 50% of employers still do. and that number can drop quickly with the next depression hits. soon

    5. Sandler

      Already the case in Manhattan. Try to find a good specialist. The “good” ones only accept cash, no insurance, for consultations as hedge funders don’t mind paying. Rest of us insured peasants are left to fight over the few good specialists who do take Insurance and so are always booked.

      1. Disturbed Voter

        That is where all medical care is heading … cash or nothing. The doctors and nurses won’t work for free. Expecting them to work for free, if you are not also willing to work for free, is immoral.

        1. Carla

          Uhm, I take it you don’t really mean CASH since the banks are getting rid of the fusty stuff.

          1. Disturbed Voter

            That is a different article somewhere else. Get rid of every currency but plastic cards, and you are a Cuban Libre! Welcome to totalitarianism. And management of that by politicians and banks will be very fair, just like trying to get your name off the no-fly list. There are still people who are trying to bust into the Soviet Union.

        2. katiebird

          Is this another way of saying, “Your money or your life” ?

          It honestly sounds like you believe extortion is an acceptable model for Health Care.

    6. human

      Who ever said, “free?”

      In a sane, caring system, everybody would receive a livable income out of which would be taxes for health, education and welfare. Sound familiar?

      I consider $20/hour (plus or minus) to be a livable income in most parts of this country. If this were to be taxed at 25%, take home pay would still be $15/hour and each individual would be contributing $10,000 per annum to the system at 2000 hours per year!

      Imagine the effect on Main St, not to mention the relief of a large amount of stress.

    7. Moneta

      I would argue that the most moral thing you can do is wish that everyone be healthy. Health is wealth. Health makes a stronger society.

      If you are sick, you can’t work, therefore can’t pay your medical bills.

      With the increasing wealth concentration one can argue that most deserve more than minimum wage while those in the top 15-20% are overpaid, stealing from the bottom. So what is wrong with having the overpaid paying for the healthcare of those who have been underpaid?

      Weird… it seems that the population has acknowledged that there is a 1% vs. 99% yet a large percentage still believes they earned/deserved their low or high wages/wealth…

      Very difficult logic to grasp for one living in a country with universal healthcare!

  2. katiebird

    As an experiment I’ve been asking for the cost of anything beyond the cost of a Doctor’s Office Visit. … Things like biopsies, scans, breath analysis — whatever. And whatever the test/issue — the answer is, we don’t know. For a scan that had to be done in the hospital, they couldn’t even tell me which doc would be analyzing the scan … and the cost would depend on what this unknown doc charged.

    So it turns my vision RED when I read that as a patient, I can’t be bothered to learn the cost of services and compare them. How can I do that when the cost is super-secret until the bill is generated a month or more after the procedure?

    1. Katniss Everdeen

      This, this and THIS.

      It all sounds so neat and simple to say, “Just comparison shop.” The only tiny thing is that no price tags will be provided, required or even generated until after you have made your non-refundable, possibly life-saving “purchase.”

      I don’t know who is crazier–the people who keep claiming that “shopping,” as we know it, is the solution, or the people who keep trying to figure out what “shopping” without a price tag even means.

      1. nycTerrierist

        x1000.

        I wish one of those nuts telling ‘folks’ to go medical-shopping were confronted with this reality in a public forum.

    2. marym

      Maybe we need to challenge the idea that what people want is choice. We want affordable access to the healthcare we need when we need it.

      No number of choices or price lists can get us there.

      As shown in country after country (many of them capitalist enough in other aspects of their economy), this can’t be done without elimination of for-profit insurance; and publicly accountable negotiation of prices for services, drugs, and devices.

      1. SpringTexan

        Yep, I want to cuss when I hear that either “choice” or “smart shopping” or “personal responsibility” are the answer.

      2. Back Office

        I work in healthcare – the bottom line is that the cost of healthcare is not affordable because it is expensive to provide healthcare. Your average doctor (if he is still in private practice because most are choosing to work in corporate run hospitals and managed care conglomerates) has costs associated with running their practice and those costs are high. With Medicare and insurances constantly slashing provider rates, it is a challenge to meet costs let alone make a profit. Short of the public option and expanding Medicare, there has to be strong analysis of what it actually costs to provide healthcare. From the price of a band aid to the cost of brain surgery, every procedure should have a fair cost associated with it and the insurance companies should reimburse with these costs in mind. Providers often times find themselves under the gun – expected to work miracles for people who refuse to lose weight, exorcise or control their otherwise controllable conditions. The sicker these problem patients get, the more they expect the doctors to do with relentless office visits, tests and invasive treatments. If healthcare is a right, then patients have an obligation to meet their doctors half way and take care of themselves to help keep healthcare costs down. If more would do this, then may be more care and resources could be devoted to the people who are actually ill.

        1. Moneta

          Whether you take care of yourself or not, your body will break down in the end. So it’s just a case of pay now or pay later…

          Making this argument about not wanting to pay for those who supposedly do not take care of themsleves wrong.

      3. tongorad

        We want affordable access to the healthcare we need when we need it.

        Yet “affordable access” sounds like Obama-talk.
        Is it too hard to say that we want healthcare, full stop?

        1. marym

          Maybe you’re right. I was trying to avoid the idea of ”free stuff” which seems to bother people, even though it’s not free, just paid for as a public function by and for all of us.

          1. Lord Koos

            People with some wealth usually fail to understand that everyone does better (including the rich) when everyone is doing better.

    3. Normal

      I once pushed the pricing problem to its logical conclusion. The only way to get a price on a medical procedure is to have the provider put through a “trial” claim. Then wait 2 weeks and see what comes back from the insurance company. Hopefully you haven’t died by then.

    4. Bryce

      This is why reasonable countries have an all-payer rate setting like France, Germany, and Japan. This just means that all third parties (government, businesses, individuals, and private insurance) pay the same price for services at a given hospital. It doesn’t mean that all hospitals across the US would have the same price, but it would mean that we would have transparent pricing in healthcare.

  3. craazyman

    I was self employed last decade and had an HSA, pretty much out of necessity since that was all you could get where I was and at the time.

    Without going into a long story, I was under a lot of personal stress and was having lots of chest symptoms, skipped beats, discomfort, etc. I was worried.

    I wanted to get and the had the go-ahead from my GP to get (i.e. rent for a few days, per the usual approach) a heart monitor — a simple device to record heart beats like an EKG. The places you’d get them from were unable to give me a price. They literally could not give me any idea of what these would cost. They were so used to billing via normal insurance plans that an “a la carte” price was non-existent. I was like “you gotta be kidding me.” I spent a few days on and off trying to find somebody willng to let me know how much it would cost to get a heart monitor — $100? $1000? $4000? — I had no idea! Nobody would or could or did, after hours of phone calls.

    I got one anyway, not having any idea what it would cost, and everything worked out fine & I was fine – physically. I can’t remember how much it did cost but it was a few hundred in the end. No problem in hindsight.

    HSA plans are great if you don’t need healthcare. If you do need healthcare and want to “shop around” like the free-market doctrine says, you may need a psychiatrist to help you cope with the shopping.

    HSA plans belong in a special place in hell. Someplace in a lower rung.

    1. ProNewerDeal

      How does paying for medical expenses out of your HSA work? Does some tedious version of a corporate expense report with receipts have to be filed for each medical related purchase? If so, is this “HSA expense report” filed with the annual taxes? It sounds as if the monthly insurance premium itself is not an acceptable cost the HSA can be used for. Wouldn’t some “pragmatic asset allocation” have to be done within the HSA to keep say at least $1000 in money market “cash” that can be “quicky” be transmitted via the 3-business day ACH, because any financial asset fund (stock, bond, etc) will require an additional 3 business days to sell & transact into cash?

      Sounds like the time cost will overwhelm whatever tax savings cost.

      It sounds as if HSA is another Exceptionally (Crappy) Murican idea, with no consideration from the 1% or HSA proponents that the HSA & the US “health system” in general is exceptionally costly (not even counting the time cost) & produces worse health outcomes than Actually Civilized Nations like Canada.

      1. d

        paying using HSA isnt all that painful or at least not what i experienced. mine actually had a debit card attached, but understand there is a limit to how big it can per year (today i think the most if can be about $6000). and you fund this your self. there is also the problem of if the providers requires payment and its the wrong amount, they have to refund back to the debit cad, they cant refund it to you (if they do and you take it, you will have a tax problem). today it requires a high deductible insurance policy to go with it( how high you ask? well for an individual it can over 6000 per year, which sounds good except the HSA limit about $6000, for a couple, over 50). in the end it really doesnt work, you cant even pay your deductible with it, never mind the premiums.

        we gave up after trying it for 2 years, as not worth the bother

        1. d

          in the end the cost to fund the HSA plus the high deductible insurance, was higher than the better insurance that covered more.

          1. Ohnoyoucantdothat

            Gets better than that. Had HSA at my very last employer (before I was forcefully retired). Had a few hundred in it (this was in 2005). Fortunately, I bought new pair of glasses a few weeks before being let go. Was informed by HR guy running my exit interview that any balance left in my HSA was the property of my ex-employer per the law. So be aware that you could lose all that money if you leave your job. Better to put that money under your mattress.

            1. nampa1

              I think that’s an FSA, which also is forefeit to the employer at the end of the year. It’s all a scam. I took out 750, no one telling me this fact, and then rushed to buy as much rxs and the FSA’s online shop just to spite the b….stards.

      2. Art Eclectic

        Correct. You cannot use the HSA for your monthly premiums. Mine issued me a debit card and a check book. I get a monthly statement of inflow – outflow. At the end of the year I get a tax form showing contributions and expenditures. I think there is some loose oversight of expenditures but not nitpicky.

        You can use the HSA $$ for your co-pay for physician visits.

      3. Anon

        The IRS can audit your HSA withdrawals, so you do have to keep receipts at least for the applicable audit statute of limitations. You don’t have to provide the receipts to the HSA custodian or include them with your tax return (as long as you aren’t audited). I’m not sure how common these kinds of audits are.

        It’s a crappy idea all around, but it serves the FIRE sector well.

        1. Art Eclectic

          There is a market for them, though. I’d much rather have a high deductible policy and an HSA, if I have to be stuck with an “insurance” model in the first place. My fondness for the HSA is that it gives me control over what my health care needs are. The best example is that almost no insurers cover massage as a health expense but I can choose to cover my once a month deep tissue massage out of my HSA. Not many plans cover chiropractic at 100%, either. Again, I can choose to cover my needs without a bean counter telling me what and what is not a legitimate health care expense.

          If I had high health care needs, I’d feel differently. An HSA is simply isn’t right for everyone, that’s all there is to it.

          1. Anon

            My concern is that these high-deductible plans cause people to forgo necessary medical care for cost concerns (and hoping that “[symptom/problem] is just nothing”), until it turns into an emergency situation. The emergency treatment is likely to cost more. I suspect this effect will significantly reduce or even eliminate any savings from high-deductible plans, not to mention the effect on quality of life from forgoing medical treatment.

      4. Phil in KC

        I have an HSA, I put away 100 dollars each pay period, it is all I can afford, because I’m also paying about $200 each pay period for health, eyecare, and dental (wife and me), and then another $400+ into the company 401 K. Right there is 700 dollars every two weeks, over $1400/month. And I don’t have a high-paying job. The health insurance is crap, Aetna silver (Missouri), a deductible of $4500. So you can see that the $2600 a year I put away still leaves me on the hook for $1900/more. I can’t put anymore away without cutting off the utilities to the house or getting a second job. What a treadmill!

        The mechanics of using the HSA are pretty simple: You get a debit card, and use it as such. Some things aren’t eligible for payment for HSA, so you have to check the list (online). Yes, there are fees, $2.00/month. The nickel-and-diming never ends.

        Here’s what really rankles: my insurance and HSA are $7800 a year. My company contributes nearly $10,000 a year to my health insurance–that comes to $17000/year for crap insurance for two relatively healthy people in their early 60’s! And I am still on the hook for $1900 before the insurer pays out 100 percent. Utterly crapulous.

        On the bright side, I used HSA funds to pay for a deluxe eye exam and new glasses. That was okay, I guess. On the down side, my wife had to raid the HSA to pay for a 15-minute procedure on a detached retina. No, we didn’t shop. Indeed, where are the price tags?

        1. Lord Koos

          No one has time to shop for repairing a detached retina, which AFAIK requires immediate attention. Other emergencies too, you are at their mercy (which seems to be in short supply) as far as pricing.

    2. CitizenSissy

      I consider HSAs the 401(k) of the health insurance system: as a supplement to a comprehensive plan, HSAs are great for covering copays and other incidentals, but are no basis for funding medical expenses, particularly given the US opaque pricing system.

      I’m beyond lucky RIGHT NOW to have a union health & welfare plan with a companion HSA, but know that sparkly unicorn will be riding off in the foreseeable future.

      1. jrs

        I’ve never seen a HSA plan with a comprehensive insurance plan, they are always only with super high deduct able plans. That’s a large part of why they aren’t very popular when employees have a choice. Most people will aim for moderate or low deductable HMOs and PPOs.

  4. grayslady

    Modest correction: Rand Paul, not Ron Paul.

    Otherwise, being a smart shopper also presumes that you have adequate offers from merchants. Ask people who live in low income neighborhoods how many grocery stores they have competing for their business. As with groceries, so it goes with medical facilities and practitioners.

    1. d

      yes!
      try being in a tiny city, of maybe 2000 people (or less). the nearest doctor might be 100 miles away. if that close, nearest hospital may be even further once the ACA is gone

  5. David Jacobs

    My family has been on a high deductible HSA plan for the past 14 years (no drug coverage). Our premiums went from $18K/yr to $6K/yr premium plus $6K HSA contribution. During that period we have had our share of medical issues that included hospitalization, long term medication, and almost every specialty.

    For this to work well for you, you absolutely have to have enough discretionary income to fully fund the HSA. As the article mentioned, you also have to have enough free time when filling new prescriptions. Simply asking “can you do better?” at the pharmacy counter and waiting 20 to 30 minutes while they try different discount plans will often save you 50% to 90% on your drug costs. Things have gotten a little better with sites like goodrx.com.

    You also have to educate and monitor your doctors. Right after we switched to the HSA, my daughter needed some medicine for her lungs, the doctor wrote a prescription and when I went to fill it, the cost almost $1K. I later learned there was an alternative drug that was just as good for $50. Unless you educate yourself and push your doctor, they often let themselves be influenced by the pharmaceutical industry in their prescribing practices. By investing an extra 30 minutes of MY time for every new prescription, our family has probably saved $50K in drug costs over those 14 years.

    So while ultimately, it has worked reasonably well for us. It would not work for someone without the extra time and resources it takes to make it so. HSAs are NOT the universal answer.

    1. Art Eclectic

      Me, too. I’ve been self-employed with an HSA and high deductible plan for 10 years. It works for me because I have the ability to put into the savings account monthly and build it up. Plus my health care needs are nominal. No way
      would I suggest one for someone with higher needs.

      What works for me is being able to control what I deem a covered expense, not what some bean counter at an insurer thinks should be covered

      1. Arizona Slim

        Count me as a former HSA user.

        In addition to having a high-deductible insurance plan, I had to use an oh-so-special bank account just for medical and dental expenses. And, guess what, there wasn’t a single financial institution in Arizona that offered such a thing.

        So, I had to deal with Mellon Bank in Pittsburgh. Talk about life in hell. That’s Mellon Bank.

        1. Carl

          I guess we’re lucky here in Texas that I have an HSA account with a local bank. No fees except for “excessive” withdrawals. It’s a tax break, primarily. One of the few left for self-employed. Not really useful for healthcare.

  6. allan

    “… because the interest rates they pay, fees they charge, and features they offer can vary, it can be worth it to shop around.”

    A magic incantation that accompanies all financialized schemes to separate you from your assets.

    Meanwhile, the Community Health Centers that were inserted into the ACA by some guy named Bernie Sanders* –
    I wonder whatever happened to him – and which don’t need a Rube Goldberg fee generating device like an HSA
    to deliver care to the working poor, are likely to be gutted by the GOP. Another solid for the back row kids.

    * Fun fact: After a Jan. 17, 2016, Democratic debate where Sanders said that he had helped write the ACA
    (because he had pushed for $11 billion in funding for the Community Health Centers),
    Politifact rated his claim as mostly false. If it’s not neoliberal, it didn’t happen.

    1. marym

      Nationally, 9,800 [community clinic] sites serve more than 24 million patients annually.

      The Community Health Center Fund [ACA provision] accounts for more than 70 percent of community clinics’ federal funding. It made up nearly a fifth of total health center revenue in both 2013 and 2015, according to the Kaiser Family Foundation. Medicaid makes up 44 percent of health centers’ $21 billion in total revenue in 2015.

      MPCA estimates that the state saves approximately $2,371 for every Medicaid patient who seeks care from a health center, saving the state more than $832 million annually.

      The MPCA also is concerned about talk in Congress and from President Donald Trump about block granting Medicaid dollars. Currently, each state receives a capitated amount based on a state revenue sharing formula.

      “Tying block grants to overall inflation (which could happen) presents long-term funding problems, largely because health care costs are rising far faster than inflation,” Anderson said.

      http://www.crainsdetroit.com/article/20170302/NEWS/170309957/facing-aca-repeal-community-clinics-look-down-double-barreled-gun

  7. sharonsj

    A HSA? Not when I can’t even afford health insurance. P.S. I also discovered that if you don’t have health insurance, you are charged more for everything.

    1. David Jacobs

      Yes, went in for a cat scan. The list price was $2K, but because I had insurance (even though I was still paying for it), I got the price of $200. This should be considered criminal abuse of the uninsured.

    2. d

      the main reason insurers can negotiate better that we can, is they represent more than just one person, with numbers in the 1000 or 10000 or more, they have a lot more chance getting prices down (since the provider might be put of business if they dont agree to the cuts, since they might few to no patients), course it also helps that they aent under the gun to get a condition resolved (really hard to bargain when you have a broken arm, or worse to get lower prices. a similar situation is having an Iphone, and needing a charger, Apple’s version cost a lot more than the generic cell phone does, and the non Apple products may have problems you dont want)

    3. Ohnoyoucantdothat

      Wife had mild stroke last fall and doctor wanted an MRI. Lucky we have trailer parked just down the road so scheduled appointment for next day (Siemens scanner). Don’t need doctor’s order to get any medical test done here … some people get whole body MRI as baseline and keep films at home. Anyway, and you are going to want to cry about this number … head scan cost $50 including doctor’s read. And this was at a private, for profit clinic. Neurologist visit after that cost 700 rubles, about $15. Imagine what the same process would cost stateside. $3k-4k or more easy.

  8. ScottW

    The bottom line is our healthcare and health insurance systems are completely unsustainable. Having purchased private health insurance for over 30 years, I can attest to the FACT it is now too expensive for the vast majority of people. My 20% premium increase is just the latest example. You can slice and dice the system all you want by creating new fangled ways of paying for insurance and healthcare, but at twice the cost of the rest of the industrialized world, for inferior outcomes, the current system will eventually perish, or we will. My children will be unable to afford insurance/healthcare unless they are part of the top 10% and even then, if current trends persist, it will bankrupt them.

    Take your pick, France, Canada, England, Germany, Switzerland, etc., all provide affordable, accessible healthcare to all of its citizens at about half the cost. The fact both parties reject single payer, conclusively establishes what a morally depraved country we live in. Politicians are bought and paid for by every medically related special interest. HSA’s are yet another example of their insatiable greed.

    1. katiebird

      Between health insurance and housing, soon we will have no money left for any other expenses. Housing is approaching 50% (for many) and health insurance is close to 20-25% (without subsidies) …. how does this work?

      I really don’t get why there is any fighting Medicare for Everyone.

      1. Disturbed Voter

        Medicare still involves paperwork, and you can pay a health insurer/advocate to file it. The intervention to avoid dealing directly with the government will cost you $100 to $200 per month on average.

        1. katiebird

          I’m sorry, what are you talking about? … I’m talking about Expanded and Improved Medicare for Everyone.

          1. Ohnoyoucantdothat

            DV reminds me of my John Birch Republican uncle. Bitched constantly about how “those people” were stealing his money with high taxes and someone should do something about it. Then my aunt came down with breast cancer and thus commenced the years long spiral into the grave. Uncle had no qualms about sucking huge chunks of money from government to pay for surgeries, chemo and long hospital stays. But to his last breath was still complaining about “those people”. DV … risk pools! Put lots of people into a shares pool so the healthy ones offset some of the costs for the sick ones. When you get older you’ll be grateful that there are those young, healthy ones helping you. It’s called shared destiny and compassion for those less fortunate.

            1. Disturbed Voter

              You are projecting, but based on someone you know. So anyone to the Right of Castro is a Nazi perhaps? I love people, and if I had infinite money, I would take care of all your expenses, Gratis. Not just because of empathy, but because of generosity. But I wouldn’t use the tax man to gather the simoleons. That is vote buying, it is evil.

  9. RUKidding

    Republicans had 7 long years to come up with a some sort of viable (??) alternative to ACA. I think they voted to repeal ACA something like 60 times (correct me if I’m wrong, but it was a lot of times)! Talk about a Kabuki Show of Epic Proportions.

    I kept asking my Republican friends what the Republican alternative to ACA was. I never, of course, got an answer except for a bunch of Fox/Rush gibberish about how they had “the best” plan EVAH all lined up and ready to go. Of course, that was FALSE.

    One of Trump’s premium promises was to repeal ACA ASAP. Did Republicans finally pull their thumbs outta their azzes and draft something, anything, to replace it? Shorter A: NO, Nope, Nyet, Forget it.

    And so, here we are with Republicans still whining about the perfidies of the Heritage Foundations’s Obamacare, but they really don’t have anything credible to replace it. Believe me, if/when they actually come up with something, it will be miles worse than Obamacare because Republicans.

    Long time commenters here know I’m no fan of the Democratic Party, but I’m totally sick of Republicans, too, and their lying weasle ways.

    I STILL see conservatives whiiiiiing about how hoooorible health care is in (take your pick) Canada, France, Australia, Sweden, Great Britain, Switzerland. It’s just so aaaawful, and we certainly don’t want that commie sh*t here in the land of “free” where our health care is, uh, among the suckiest on the planet.

    I’ll serve cheese with my whine the next time. This whole thing is super aggravating. And it’s one thing that really ticked me off about Trump because I knew d*mn well that he had abso-effen-lutely no clue what he was talking about and had no plans for how to replace ACA. It’s just that ACA was initiated by the horrid Democrats and the d*mn Kenyan Nazi Muslim.

    We are so screwed. My loathing of everyone in Wash DC knows no bounds.

    1. d

      yea. well we have that sell insurance cross state borders (which some state already allow. how did that work out? didnt help) then there is that lets limit malpractice suits. which some states did. how did it wok out? didnt really help lower the costs.

      1. Normal

        “Sell across state lines” really means “eliminate state insurance regulators”.

        Companies already sell across state lines, but they have to have their rates approved by the state insurance commissions. That reduces profits.

        Republicans claim to be in favor of states rights but in this case profits trump principles.

  10. TiggerMax

    Regarding the last line of the Forbes excerpt, “Trying to control costs through consumer behavior is not practical.”
    I would say that trying to control costs through consumer behavior is very challenging but can work in limited circumstances and could work better if were allowed to do so. Example – Medicare part D donut hole. People on Medicare have pharmacy coverage up to a certain point, say $3000 dollars where they just pay for copays on medication. Then from say $3000 to $6000 they pay full freight out of pocket, then they pay 20% after they get to $6000. Seniors got pretty good and asking for lower priced medication and generics and that was held up as an example of a successful modification of behavior. Of course the problem is that the donut hole became the most unpopular feature of Medicare part D (with senoirs/voters) and the ACA put in place a provision to phase it out over time.
    Pretty sure the republican plans to replace ACA are going to be awful – HSA’s and buying insurance across state lines are both lousy ideas for all the reasons mentioned above. Just wanted to acknowledge that occasionally consumer behavior can influence costs. I can give innumerable examples of consumer behavior increasing cost, by the way

  11. PQS

    We have an HSA at my job, in addition to an HMO. It is mostly used by our younger workforce (construction) without families. For guys in their 20s, going to the Dr. is a very low priority, so they opt for the less expensive option. And if they get hurt on the job, well, that’s what workman’s comp is for….

    I did see the townhall clip of people telling their Republican rep that poor people can’t afford to save money in HSAs….that was priceless.

    The “tax on time” for all this mess is a good angle, and one I never, ever hear brought up on either side. I would love to hear the Republican retort to THAT.

    1. d

      while they may think workman’s comp will take care of them, boy i got news for them, it wont. it used to. but its been broken in most states, so they it actually does so little, and business like it that way.

      1. Penny Peters

        Yes, workers comp is such a hassle that if you DO have an on-the-job injury and can dissemble that it happened elsewhere, I would totally do that, because your employer insurance will cover it if it happened elsewhere; but if it’s on the job you get sucked into the crappy workers’ comp schemes.

  12. cripes

    Not fully considered in most discussions of Obamacare, that will be as bad or worse under TrumpCare, is the position of low(er) income patients/consumers/shoppers with chronic health conditions.

    Given the incredible prices imposed on Americans for prescription medicines, the huge premiums and deductibles, co-insurance and co-pays, it’s likely the average diabetic, COPD, Cancer, HIV, Cirrhosis patients (make you own list here) will need to pay 6 or 12 or 18 thousand dollars every year before they get a dime paid by insurance companies.

    People will die, as before. In greater numbers..

    At least the Obamacare subsidies softened the blow, although it still incentivized not getting health care. With this new scam, it will do little more than provide tax shelters for the wealthy

    Bending the cost curve has always meant pricing patients out of health care.

    1. d

      its a sad statement, but probably true, as one wonders if this is the real solution the GOP wants it, as will lower the life expectancy, as more dont go to the doctor, instead of it going up, it starts retreating. which makes social security more viable (sort of), but might really do a number on Medicare, except that it might reduce the number of potential benefenciaries

  13. JohnnyGL

    Through experience, I’ve learned that HSAs are not designed to help you save for upcoming medical expenses that may happen in the future. They’re to allow you to continue servicing your existing medical debt at a slightly cheaper rate, which functions as a subsidy to providers.

    Paying $1 of unsecured credit card debt costs you a $1.

    Paying $1 of unsecured medical debt costs you maybe 80-90 cents with the tax break.

    It’s very similar to the mortgage interest deduction, which is a trojan horse to help the FIRE industry dressed up as an upper-middle class (those 10%ers) tax break.

  14. Dwight

    I’m not an economist (thank God), but aren’t health savings accounts very inefficient? Some will save too much which could have been better used to increase their individual welfare, as well as contribute to economic a invite. Others will save too little. None can know the optimal amount to save because none can know what will happen. Even if all people could afford them they would be a bad idea. They contradict the whole purpose of during risk with insurance.

    1. Disturbed Voter

      Spending it all is a risk, saving it all is a risk. There is no life without risk. People want to eliminate risk, without eliminating life … they will fail miserably ;-(

      I have a health savings plan, along with an ACA crippled corporate plan. It would have been better to the common good, if I had simply died. We all have a duty to die, sometime.

    2. Salamander

      Not really. Missing from this conversation is acknowledgment of the fact that after statutory retirement, funds in an HSA can be spent on anything, without penalty. They can also br transferred as inheritance.

      Think of an HSA as a traditional IRA that can also be used for current medical expenses. In fact… prioritize your retirement savings that way: fully fund the HSA before contributing to your IRA.

  15. RenoDino

    I know a multi-millionaire who is self insured (no insurance whatsoever) and shops for medical tests. He found a nationwide MRI clearing service that offer low rates for off peak hours for scanning. He got his done for $400 or about what Medicare would pay. He pays in cash at the Doctor and asks for a discount.
    This is the Republican plan, but first the less affluent consumer must pay a toll to the FIRE industry before they can enjoy the benefits of independence.

    1. d

      must have been a optional need for an MRI. and they can travel to where that low cost service was. which if you are a multimillionaire one can do. but if you make less than 50,000 a year, or have a family, and the household makes maybe 100,000, you cant do this, when Johnny breaks his leg, at football practice

      1. Karen

        I price shopped for MRIs in my small town and found a $3,000 price difference between two nearby providers. Got it for $259. You don’t have to be a millionaire to find cheaper care–though people in rural areas will surely face more challenges.

        1. RUKidding

          Yes. Depends on where you live. From what’s been told to us during the POTUS campaign, a lot of Trump voters live in more rural and less serviced areas. Could be very problematic for them, and they are portrayed – and probably are – as the citizens who are most financially on edge and have the most difficult time affording decent health care. So there’s the rub.

          I’m still working and have what’s nowadays viewed as a “good” health insurance plan. I can also shop around my city and find lower prices. Not the case, though, for citizens maybe just an hour or two away from here unless they’re able to travel here, etc.

  16. Jason Boxman

    It’s grating to hear CAP referred to as “nonpartisan”. These think tanks infiltrate and poison everything.

  17. DakotabornKansan

    Dorothy Parker: “If you want to know what God thinks of money, just look at the people he gave it to.”

    Most Americans simply don’t have the extra bucks to put into such an HSA account. Hell, nearly half of Americans say they would have difficulty paying an unexpected $500 medical bill.

    HSAs are great tax shelters for the rich.

    As the LA Times Michael Hiltzik says, “Remember that, the next time someone tries to tell you that the HSA is a “healthcare reform.” It’s not; it’s a tax cut for people who don’t need another one.”

    http://www.latimes.com/business/hiltzik/la-fi-hiltzik-hsa-20161118-story.html

    Their proposals make zero economic sense, and on the compassion scale, less than zero.

    “What I have called the trousered ape and the urban blockhead may be precisely the kind of man they really wish to produce. The differences between us may go all the way down. They may really hold that the ordinary human feelings about the past or animals or large waterfalls are contrary to reason and contemptible and ought to be eradicated. They may be intending to make a clean sweep of traditional values and start with a new set.” – C.S. Lewis, The Abolition of Man

  18. River

    I really have no idea how you Americans can put up with this. I try reading it, and I come away just baffled. HSAs, health insurance, its all absolute nonsense.

    1. Art Eclectic

      We Americans put up with this because we believe emphatically that the right to profit off of any and everything comes before all else.

  19. Karen

    There are many chicken-egg problems with our current situation, so evaluating HSAs in the context of dysfunctional insurance and pricing systems lays blame in the wrong place. HSAS are beneficial (though the limits certainly are too low) and pretty easy to use. People can shop for non-emergency care, and many would be willing to do so, if prices were posted. But it’s damn hard to get them, as others have attested. I’ve been determined to get prices before any procedure, as a matter of principle, because it’s infuriating to be charged $3,600 for an MRI at one clinic, and $250 at another one down the street. Poor people should get tax credits (which amount to direct payments for those with no taxable income) deposited directly to HSAs to address the saving shortage.

    Our current system is doomed because patients and doctors (esp doctors, who have a blatant conflict of interest) will order any number of tests, drugs and procedures if someone else is paying for it; the amount of fraud in our system is staggering. Prices would come down quickly if we had regular markets and competition for routine care; then we could create a large, possibly national risk poor to provide catastrophic care for everyone, keeping the costs low. Medicare is held out as a model for single payer, but it’s not a good model–it is grossly underfunded, suffers from all the incentive problems described above, drives good doctors mad, and is rife with abuse by bad ones. If you want a centralized provider model, consider the VA. Yikes. Community clinics and cooperatives strike me as a better service model.

    Ultimately no insurance system will work until we get costs down, and for that you need transparency, competition and consumer choice, none of which we have now. Our politicians are bought and paid for by the medical-industrial complex and will never change. They need to be kicked out, lock stock and barrel.

    1. marym

      Countries that have universal healthcare have lower costs and better outcomes than the US.. T.R. Reid’s findings in the countries he visited were that cost cutting didn’t precede implementing a universal system, but was a result.

      – A universal system with a single negotiator for prices can get better prices.

      – Medical costs are lower when people can get diagnostic, preventive, and early care.

      – US insurance companies spend 20% on “administration;” Medicare spends 2 to 3%, similar to other countries with universal care systems.

      1. Karen

        GWB had the power to negotiate lower drug prices when he introduced the Medicare drug benefit in 2004, but chose not to do so. He created an entitlement for the drug industry, as much as for seniors. And lied about the cost, just as the Obamacare proponents did. His GAO chief resigned in protest over the magnitude of the lie. The problem is corruption. Our single payer system would be worse than other countries because our system has been totally corrupted. Medicare is single payer and it only looks like it’s working because the bills haven’t been paid yet.

        1. marym

          Yes, a system based on prices being negotiated won’t work if prices aren’t negotiated.

          Yes, our public systems are corrupted, but the private, for-profit insurance and drug industry are too. Handing them all the money and power isn’t providing us affordable healthcare.

          The entire rest of the developed western world and some less developed countries have solved this, not perfectly but better. They did it exactly one way, despite other variances in system features – no for-profit insurance and government negotiation of prices. I can’t believe other countries don’t also have corruption, but with a system that’s Everybody In there’s a powerful incentive for it to operate effectively.

        2. toolate

          Medicare is NOT single payer and has not been for some time. So if you mean it isnt working because it has been crapified by the vested interests of insurers and big pharma, we concur

    2. Lambert Strether Post author

      No. HSAs are not “beneficial,” because the whole shopping model is wrong. People don’t do it, and they can’t do it. Consider reading the post.

  20. Karen

    A couple of striking, if not unique, case studies:

    Seattle Times: High Volume, Big Dollars, Rising Tensions

    Atlantic: When Evidence Says No, But Doctors Say “Yes”.

  21. Kalen

    Another excellent and needed piece. And most of all the characterization of this thole thing as a French farce of Moliere or even better a Ionesco Theater of Absurd i.e bunch of bureaucrats and corrupt politicians, all on an equivalent of single payer fully funded insurance, are trying to device a system that by design prevent delivery of any reasonable and affordable health care to the rest of the people. It is disgusting.

    It is the money in medicine paid by Obamacare sham of bailing out Wall Street Medical Insurance companies or other sham before that kills people and will continue if a profit motive is not eradicated from medical field. The money is the problem number one;

    An excerpt from: https://contrarianopinion.wordpress.com/random-thoughts/
    MEDICAL SLAUGHTERHOUSE part 1.

    All those issues of utter deterioration or collapse of medicine in the US are well known and what is shocking is suppose continuous opposition of medical profession to the universal healthcare in a form of “Medicare For All”, (as they historically opposed Medicare or FDR universal health insurance) which would be a lifeline for the decaying profession being killed for profit skimmed by medical field corporates and allowing for return of medical doctors to their appropriate role of servants, officers on duty of fundamental national interests of healthy population.

      1. susan the other

        I think ‘farce’ was the correct critique. So much idiotic drama. One omission was not including our goofy old prima donna Nancy Pelosi telling us we can’t have single payer because we are a “capitalist country.” Newsflash for Nancy: there are lots of capitalist countries that have single payer medical. Thank you for this review Lambert. It was almost fun. And comments are killer too.

    1. tongorad

      It is disgusting.

      Yes it is, by any rational and humane standard/measurement. The fact that so much suffering and looting of resources is going on, when it doesn’t have to be that way, must be viewed as a humanitarian crisis.

      My anger with those who support Obamacare only grows with time…

  22. VietnamVet

    The collapse of the public health service, the restart of the Cold War 2.0, and rising sea levels all have the same cause; greed. It will be the luck of the draw if war, drugs, plague or storm surge gets you or not. Boomers could be the last generation who mostly die of old age.

  23. conchscooter

    The reason we do not have universal health care is the same reason for every otherwise inexplicable social service shortcoming: racism. I know its weird when you first consider the idea (and I’m white) and people get angry when I say it in real life, but our Republican leaders pander to the idea that we white middle classes will be funding “their” out-of-control lifestyles if we institute Medicare for All. Ronald Reagan made it publicly acceptable to think it, with his “welfare queen” comments and Donald Trump is doubling down on it. Mexicans, blacks, browns, transgenders whoever you want to demonize will wreck us all if “we give them” free healthcare or unemployment benefits or whatever… It is such an easy lie to propagate and the masses lap it up.

    1. Lambert Strether Post author

      I deprecate “the masses” as a category. It’s also agency-denying and disempowering, since it implies a passive “mass” awaiting a vanguard to tell them what to do.

    2. Anonymous

      It’s not race, it’s class. There has always been cruelty towards the poor classes in capitalistic societies. It just happens that, in the specific case of the USA, the African-American community has been a permanent underclass for a number of historic reasons (slavery, Jim Crow etc.). So there is a congruence between race and class to a certain extend in the USA.

      The “they” you are refering to is the poor ghetto black, not the African-American professional in a suit pulling a middle-cass income. It’s class, not race. Racism is a useless explanation. Even worse, it is a misdiagnosis of the problem that makes the American left waste energy and political capital on socially divisive nonsense that leads nowhere.

      Japanese and Koreans have been seen and treated as subhuman gooks and soulless insect people until their respective countries managed to lift themselves up economically and now these attitudes have pretty much vanished. Racism is an expression of classism, it’s rarely the root cause.

      As long as the American left (or what passes for “left” in the US) keeps banging on about race and identity, they will continue to lose elections. And rightfully so. It’s time that you tell your gender warriors and race baiters to shut the fuck up and address the real underlying issues. Hillary Clinton tried to win the election on identitiy politics and see how that went.

    3. tongorad

      Has a nation with a such a wide range of racial/ethnic identities as the US ever passed a universal health care law?
      “Celebrate diversity” is an admirable ideal, but I wonder how much diversity divides rather than unites us.

      I reckon most people run in pretty tight circles when it comes to others they really care about and relate to.
      However, the vast majority of us are working class…hmmm.

  24. I Don't Know About That

    (Tax exempt vs. tax deductible?) So if you income situation don’t pay any federal taxes or have a very low rate of taxes, then you are getting no benefit (and a lot of nightmare regulations/tax on time)? Have I got that right?

    Where as if you are in the top income bracket(and probably have low deductible insurance from your employer) then you might get value? Does that sound right?

    And this is for Federal Taxes, would it or would it not exclude state taxes?

    1. Salamander

      Not quite… only with a High Deductible Health Plan (HDHP) can you qualify for the HSA. But yes… as it allows you to pay for healthcare with pre-tax dollars, the benefit mirrors precisely your tax bracket. So it benefits most the high earners.

      I’d advise my loved ones to do this for as long as they could, building up that HSA… then as they get old, and start to suffer inevitable health problems, switch to low deductible insurance. At that point they won’t be able to contribute more to the HSA… but it’s theirs to use as they see fit, and basically becomes an IRA at statutory retirement.

      That’s the best strategy from an individual’s perspective.

      As a matter of public policy, of course, it’s awful… reducing the amount that the young and healthy are paying into insurance pools, thus driving up premiums.

  25. McWatt

    In the old days thieves called the person they wanted to steal from the “mark”.

    In our modern cell-phone society we are the marks.

    “They can do anything we can’t stop them from doing.” Heller

  26. Karen

    There is one ethical company (but don’t call it “insurance”) : Liberty HealthShare. It’s a godsend in this evil sector.

  27. jawbone

    Editor: Please note —

    It is not Ron Paul, the father; it is Rand Paul, the son, now senator.

    Ron Paul is out of office and probably can’t go around the Capitol trying to find the secret room….

    Sorry if this has been brought up — I didn’t have time to read all the comments. But it was…well, confusing. As the Pauls have sometimes been….

  28. dbk

    Bewigged, bewildered, and besotted protagonists

    … reminded me of Bewitched, bothered, and bewildered (Pal Joey)

    Thanks to all for the excellent comments. The problem still seems to me to be financial: most Americans who could in theory benefit (somewhat, esp. later in life) from an HSA don’t have the money to put into them anyway.

    Which is why, as I’ve said before and will undoubtedly repeat, I think folks should just write to their Congressmen/women and cite H.R. 676 as “what they want”.

    The reference above to the person (quoted in T.R. Reid’s book) who had designed health care systems for a number of countries about the key question to ask before beginning the process, i.e. the country’s ethical stance towards health care, is key. If health is seen as a privilege, a consumer good for the well-off, then a private system is acceptable. If it’s seen as a moral imperative, then a public system is in order.

    (@mayam: many thanks for the ref to The Healing of America).

  29. todde

    HSA’S are retirement plans you can use for medical expenses.

    It’s another tax subsidy for the financial products wall street sells

Comments are closed.