HSAs
A recent article in the ACP Observer speaks to the pros and cons of Health Savings Accounts (HSAs). [ACP Observer, May 2006 - Will HSAs lead to smarter spending or sicker patients?]
The article states “Consumer-directed health plans emerged in recent years win response to employers’ demands for premium relief.” Employers can no longer foot the bill completely for employees. It has just become too expensive. In addition, by doing so over the past 20-30 years, the actual value of what patients receive has been de-valued as mentioned in the article. "A major problem in the health system is that the actual value of what doctors do is incredibly devalued because people don't pay for it," said Dr. McLean, a member of ACP's Health and Public Policy Committee. "When a doctor's opinion is, to them, just a $10 co-pay, it loses value."
The downfalls listed in the article are:
Not funding accounts
Putting off diagnoses
Avoiding tests and treatments
Getting enough cost information
Using HSA money for non-medical expenses
All of the downfalls listed in the article result from personal choice and responsibility. If the HSAs are utilized as they are designed, I believe they can be the beginning of a revolutionary change in our Healthcare environment.
But then, I believe in personal choice and responsibility. I believe patients should choose how to spend their money and how they make healthcare decisions. We cannot afford everyone receiveing everything available without paying for it. This is where the major disagreements lie.
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posted by Anonymous at 6:27 AM
4 Comments:
The hospital must be against HSAs if Healthblogger is for them.
I cannot tell a lie. It is I, Iamhoosier. Thought Doc might need his heart and blood pressure kick started this morning.
As a retiree, I receive a set amount for purchasing health ins.
thru my company. As I am covered under my husband's insurance this money goes into a health spending account. Out of this I must select an amount, which will cover any misc. expense that my husband insurance does not cover. The catch is you must make this selection in November of the previous year. If you don't use the amount in the following year,you lose it, and it returns to the company. Once again its a win, win situation for someone other than the person that has earned the benefit. I don't know anyone that knows what their health needs are going to be 13 months down the road. The goverment changed the policy for HSA accounts, (according to my Company), as in past we were able to use the money for any eligble expense, without making a yearly determination. Unless something is changed HSA is not worth the paper it is written on.
Anonymous evidently has an HSA tied to an additional "Flex" plan. The money in the Flex plan will get lost. This is an option companies can choose.
A pure HSA plan does not include the Flex component.
A pure HSA has basically 2 components.
#1 A high deductible insurance policy that covers catastrophic things. Usually around $5000 deductible for a family
#2 A second personal bank account referred to as the health savings account.
The company and/or the individual pays the cost for the high deductible insurance policy and then they also have the option of putting money into the HSA account up to a max of around $400 a month.
The money in the HSA account is to be used to pay for medical costs up to the deductible amount. If you put the max in the account, after ~1 year you would have almost the entire $5000 for the deductible if something bad were to happen.
The money in the HSA is the individuals. They never lose this money. IF they do not spend it, it will continue to accumulate in the account and they can save it for nursing home bills etc when they are old.
Companies that choose flex accounts typically have rules stating that all the HSA money has to be spent for the year and then the flex money can be used. If it is not then the flex money is lost.
Hope this helps a little.
HB is correct on the flex account. It is true that if money put in by an individual is not used it reverts back to the company. The other side of this, the company has to front the money.
Example: An employee decides to put 200/month(2,400 for the year) in the flex HSA. If the employee has $2,400 of qualified expenses by March, the employee could get all $2,400 back at that time even though they had put in only $600 up to that time. If that employee would leave before the year is up, the company is out the uncollected money. There is some risk for both parties.
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