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HSA's are another giveaway to the wealthy

I've been on an HSA for about six months now (only choice at current job). Ironically, the primary reason I had to leave the last job, which I liked a lot, was a benefits cut that hit our family very hard, with no accompanying increase in salary. They (previous company) left us with choosing between a "high" plan which was ALMOST as good as the previous-years' plan, except a couple hundred bucks more a month; a "medium" plan for a few bucks more in which all copays were nontrivially hiked and coinsurance cut; and a "low" plan which was basically a HSA, too.

The HSA works pretty much like an FSA (which we were already using), except a bigger pain in the butt, since the years' money isn't all available on day one, like in an FSA. (In fact, I 'bounced' payments-by-mail twice because I mailed in the bill response without double-checking to see how much had flowed in, each time with a delightful $20 charge tacked on). You also get to enjoy looking like a deadbeat to doctors' offices as you quite frequently fall into the "31-60 days overdue" bill categories since they first have to file with insurance, then insurance tells them what they're supposed to charge you, and then you get sent a bill. The tax savings are no greater than with an FSA, which is to say that they depend on your marginal tax rate, which for most of the people who were having trouble with health care before isn't likely to be high enough to be worth the difficulty of setting aside this money in the first place.

Now, for us, it still makes sense (even though unlike most people on HSA's, we actually hit our deductible last year; i.e., we actually use health care). And it makes a hell of a lot of sense for a high-earning person that doesn't use health care. But it doesn't do squat to help out people who are unable to afford insurance today - the benefits disproportionately accrue to those with the highest marginal tax rates, not the poor. The poor, sadly, probably remain better off going to the emergency room than using this thing.

Even libertarians who have been exposed to single-payer or socialized medicine seem to finally get it, as I got it a few years ago. Medicine is not a case where the market works like it does in computers or groceries or whatever else; nor will it ever be. It's more like providing a police force and firefighters.

And no, switching to an HSA has not given us any incentive to reduce our usage of medical care at all, because, like pretty much everybody who works for a living, I only go to the doctor when I need to because it's such a pain in the ass. The theory that we can save money on healthcare with this "ownership society" crap rests on the questionable premise that most money is being spent by people who can use HSAs, when, in fact, most money is spent on the elderly, the premature, and other heroic interventions.

This is really becoming an issue in which the center is ready to move, and only the far, far, far right balks. There's just no sensible reason not to pick the best socialized system (appears to be France or maybe Germany) and just get it over with.

This entry was posted in the following categories: Economics , Politics (Outside Austin)

Comments

Investing 5 grand for a wealthy person who also has to carry the HSA insurance in order to use the money is hardly a giveaway. The amounts are too small for truly wealthy people to be the ones that reap the benefits of an HSA.

But people like me - an actor,writer, and web designer - benefit immensely. And my income right now probably qualifies as lower class, not even middle, as I lost a couple of major clients last year. HSA's make health insurance affordable, and if I don't get sick, it allows me to use the money I would be throwing away as a retirement plan.

While I agree some poor persons who can't afford insurance won't be able to afford this, either, I don't think that means you do nothing for the people in between like me. A lot of people could benefit and would take advantage if they understood how an HSA worked.

And as far as the FSA, the huge difference is that you use it or lose it. An HSA stays your money.

"Investing 5 grand for a wealthy person who also has to carry the HSA insurance in order to use the money is hardly a giveaway. The amounts are too small for truly wealthy people to be the ones that reap the benefits of an HSA."

The idea is that this is a giveaway for the wealthy employed - it's essentially a way to either shelter an additional 5K of money per year, or to get a deduction for medical expenses that poor people either won't be able to get or will get far less benefit from.

Yes, if you were a wealthy uninsured person before, it wouldn't make as much sense to jump to an HSA. That's not what I was talking about.

As for the rest of it - I well understand the difference between an HSA and an FSA and why an HSA is good. Just because it helps ME (good personal economics) doesn't mean it's good POLICY.