Health Savings Accounts and the Current Debate - A Letter to NPR

I listen to NPR news on the way to and from work each day. Morning Edition this morning ran a story this morning about folks with the 'gold plated' health plans, the kind that some in congres want to tax. The story was more of a human interest piece than news as it looked at two families out of the mainstream, or at least I assume they are. There was no analysis of how far their plans are outside of the mainstream, just the telling of their story.

I've been disappointed in the reporting on health care in that in every news story, the talk goes to premium payments and copays. It seems the assumption is that this is how health care works and how we pay for it. Our Health Savings Account takes a different approach. We have no copays but pay full price up to a max adn then insurance pays beyond that. I'm disappointed to hear the reporting always framed in terms of the typical copay paradigm, which I believe contributes to higher costs. Our HSA is much more cost effective for us than the PPO also offered, saving us thousands each year for the same care. I wrote the following letter to Morning Edition to express my disappointment in the one sided reporting.

I've been listening to the health care stories both on NPR and elsewhere and wonder why I haven't heard stories of folks with plans other than standard plans with premium payments and co-pays. I have yet to hear of folks with HSA plans, which I have and has served my family and others in my company very well.

The lawyer today who pays $30K for his health care each year made me smile. The total cost of the premiums for my HSA are about $14,600 for my family of 5 (my employer pays about $11K of that). The terms of the HSA allow me to contribute pre-tax dollars to an account to pay for medical expenses, which I do each paycheck. I pay full price for everything out of that account until my deductible is met, after which everything is covered 100%. Our family deductible is $4K meaning that our max health care expense per year is $18,600, period.

Compare that with the PPO also offered by my employer. Premiums alone for my family are $18,500 (again, my employer pays about $11K) and every visit or prescription incurs a copay of some kind, easily adding thousands of dollars per year. As you can see, the difference between the PPO premiums and the HSA premiums is almost equal to my HSA deductible, meaning my out of pocket is the same either way BEFORE I go to the doctor even once. Even if I paid 100% out of my pocket, the HSA is a no brainer.

With the HSA, my health care expenses are capped, with the traditional PPO they are not. I could easily double my costs if I have several major events in a single year.

The downside is that a major event in the beginning of the year when the HSA account is low means coming up with the money from somewhere else until the funds area available. The shock of paying full price is a bit much at first, but it exposes you to the true cost of care which is good. Also, if we have a very healthy year, anything left in our HSA account is ours to keep. It functions as a retirement account, and withdrawals are subject to similar rules.

I'm concerned about what will happen to my HSA plan under these new government initiatives. Mr. Obama says I can keep my plan, however I'm not yet convinced that it will still be offered. I've heard nothing on the impact to HSAs under the plans currently proposed.

I wish more folks were aware of this option and understood it's benefits and I'd like to hear it reported on NPR.



We have an HSA as well and it's a no brainer here too. Best thing is that after the critters have moved out the amount in there should go up. When you retire then you get to keep that money for future medical expenses. I think it's tied into the stock market which is bad and maybe good but it's there. I agree that it makes you aware of what your spending for medical care and you don't go in for every little sniffle. That's why the insurance companies are ok with it too. Anyway, good letter.

Our plan 125 is not setup that way. You can use it to pay co-pays or uncovered part of insurance claim, but co-pays cannot count against your deductible. I can put in anywhere from $250 to $5000 per year pre-tax for unreimbursed expenses (co-pays, 20%, etc). Same options apply to a separate reimbursed expenses account.

So our model is, always pay co-pay. Pay 20% of expenses until we hit deductible, $1500 per person or $4000 per family. (this is last year's data, it went up this year (sept 09) and I cannot find details) After deductible is met, all expenses paid until $2 million dollar cap is met per family member.

This is for medical, not dental. Different formulas apply.

In my son's early years, this meant we were paying more than a thousand dollars in co-pays. Until this year, each child would have anywhere from 150 - 200 appointments a year. Each with a $25 co-pay. (co-pay is now $35)

So, get insured with someone else, right? The only other game in town has the same rules, but they will not insure my wife due to a pre-existing condition.

I wish I had your options here!

HSA's might be a state by state thing, I don't know. I bet we have a yearly max too, I just don't know what it is.

One guy at my office has a daughter with significant health care needs. She's on growth hormones which are real expensive and they meet their $4K in February or March. We usually meet ours around this time. This year it was about a month ago.

It must be. No HSA's here that I'm aware of. Point was that I completely understood that co-pays are how my healthcare works.

I made a mistake earlier, I average a thousand dollars in co-pays a year. When my son was born, it was significantly higher.

I wish I had a way to cap my expenses. The only way that I can is to not make appointments.

Something needs fixed with it for sure. I'm just not sure the government is capable of doing it or should be doing it.

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