Stossel gets it right, again

An op-ed extolling the virtues of HSAs:

We’d each be better off if we paid all but the biggest medical bills out of pocket and saved insurance for catastrophic events. Truly needy people would rely on charity, not government, because once government gets involved, unintended bad consequences abound.

If people paid their own bills, they would likely buy high-deductible insurance (roughly $1,000 for individuals, $2,100 for families) because on average, the premium is $1,300 cheaper. But people are so conditioned to expect others to pay their medical bills that they hate high deductibles: They feel ripped off if they must pay a thousand dollars before the insurance company starts paying.

But high deductibles may be the key to lowering costs and putting you in charge of your health care.

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  • don wilhelm

    Another plus with HSA’s is they encourage thrift, to save for the deductible. Lack of savings is a major cause of chronic stress, which along with inactivity and processed food are the causes of chronic disease. Can someone tell me why the causes of 80% of health costs are not even on patient’s charts? Until inactivity, processed food, and chronic stress are checked and tracked, health plans will continue to fail to keep people healthy.

  • Ann

    I agree that people would be better off paying higher deductibles, but I’m not sure the deductibles are the only thing wrong with this health care picture. I’m getting hit with sky-high copays on everything but routine blood work – $175 per test or procedure. My docs don’t order unnecessary tests and right now I’m having to save up to have an MRI to determine if a lesion on my kidney is malignant or nothing to worry about. If we pay higher deductibles, the copays are going to have to come down. It’s not just about premiums and deductibles. Annie

  • Anonymous

    Stossel’s simplemindedness wears.

  • Anonymous

    How long does it take somebody with an honest to god health problem to run up a $1,000 bill?

    I find it hard to believe that out of control health care costs are the result of people wastefully spending that first $1,000 dollars.

    If anything they will skimp on small things that impact their lives -itchy rashes, small infections, routine shots and screenings. When the big disaster comes they’ll blow through their deductible and be thrown back into a system that is out of control.

  • Anonymous

    Right after I read this I saw a patient in the office with a small intracannalicular acoustic neuroma – about 5 mm in diameter. He has mild tinnitus and normal hearing. I told him about the three options – surgery, radiosurgery, or watchful waiting. At age 62, I recommended watchful waiting. His comment – “Naw, I want to have it treated (with radiosurgery) because I’ve already spent my deductible this year, so its free.”

    The cost of this treatment at this hospital is $65,000. (That is the facility fee. Medicare pays me, the neurosurgeon, about $650.00. But that’s another isuue.)

    Stossel is right. First, this treatment costs an outrageous amount because of insurance, not because of the uninsured. Second, the patient would not be even considering it if he had to pay for at least part of it himself.

    So what do I do. Argue about economics and best medical practices with him until he gets disgusted and goes to someone else? Or give up and give him what he wants, sticking the insurer with an enormous bill? BTW, the money I would be paid for this is not a factor. It takes me half a day to do the treatment, and that doesn’t cover my overhead.

  • Anonymous

    This system works great for a place like Whole Foods because most of their employees are already healthy and fairly young, a group that doesn’t use that much insurance anyway. The company also tends to attract workers who are interested in eating the types of foods they stock.

    What I want to know is how an HSA system would benefit those people with chronic conditions. Medicine for illnesses such as asthma and diabetes is astronomically expensive, not to mention the supplies, testing, and checkups. Even if someone with these problems follows doctor’s orders to the letter, sometimes things can go wrong. I can see how a high-deductible policy might work in these circumstances, but an HSA would leave these people bankrupt.

  • masaccio

    I’m 60, in excellent health, take no meds, work out regularly, low blood pressure, weigh less than I did in college. My family coverage, self and wife, with a 2,000 deductible is about $1,200 monthly. I’m out of pocket $16,500 plus copays before I’m covered. How is an HSA going to help me?

  • Evan

    HSA’s are great for all healthy people. They are great for rich sick people to whom the deductible is an inconvenience.

    They are useless for sick poor people.

  • Anonymous

    “John Stossel proves (for the umpteenth time) that he is America’s finest investigative reporter. He is a national treasure.”

    Your brother?

  • janemarieMD

    People with chronic illnesses would also have to learn to be thrifty and make choices. My diabetics want sleeping pills, allergy medicines and Viagra, and they don’t want to pay the full price for these.

    A diabetic who loses 20-30 pounds can often cut back on his/her medicines. More diabetics would challenge their doctors to use generic medicines for their treatment.

  • Maggie Rosethorn

    HSA’s are a pain in the a**; I had one and went back to my PPO after 1 year because it was a disaster. The doctors’s offices didn’t know how to handle the HSA; I didn’t know how it worked well enough to stand my ground. My “deductible savings” were spent in the first 3 months of the year, due to emergency health problems. And that is in a family where we all are fairly young and healthy. We had to scrimp and save the rest of the year to deal with the deductible (which isn’t calculated as easily as you think, either).

    And….I WORK for the ‘evil insurance’ company. I can’t imagine, without a LOT of education, that HSAs will work well for the general public.

    If you want to decrease unnessary spending, you need to look at ALL the factors. The MDs and public who defraud the companies, the people who think that they “deserve” treatment for everything (antibiotics for a cold, for example), the families who demand all treatment for the 95 year old who is dying (let’s put a pacemaker in him/her…no, let’s do a cardiac transplant! We can’t let him/her die!!)

    OK. Sorry, Kev. I’ll get off my soapbox. But, as a person frustrated with the high cost of medical care, too, I tend to rant. I think doctors are underpaid by insurance companies, but it’s not only because the companies want to make money. There are lots of factors that many people don’t consider.

  • matthew holt

    Kevin, you must have been out sick the day they had math class in med school. Or if you did attend, find me the high-deductible insurance plan that costs 20% of regular insurance that doesn’t underwrite its customers. Absent that arrangement no one would have HSAs, so they’re a scam.

  • Anonymous

    “A diabetic who loses 20-30 pounds can often cut back on his/her medicines.”
    What about type 1 diabetics?

    PPOs are much better alternatives. A co-insurance of 20% instead of copayments with a reasonable, but not high deductible, would spread out the expenses for all treatments, not just initial ones.

  • shadowfax

    Wrong, so terribly wrong. It burns!

    My take is here.

  • ConsumerAdvocate

    When people have financial “skin in the game”, they change their behavior and become better consumers. They are motivated to search for the best value and try to make the most out of their health care dollars. This does not happen unless consumers are required to pay out of pocket for their health care services. Our health care system needs to provide better tools to help drive competition and allow consumers to make better choices. I am in favor of high-deductibles plans. These type of plans make us all more educated consumers for health care services, and will drive competition, inprove services, and incourage innovation. Competition works as we have all seen with retail clinics, and cosmetic surgery centers.

    Mona Lori, Principal
    http://www.outofpocket.com

  • Anonymous

    “Skin in the game” I couldn’t have said it better.

    I don’t know what’s the big problem with HSA’s, it’s no different from wanting cheaper auto insurance with a high deductible, and using the savings to cover that high deductible.

    I found a PPO plan with a major insurance company, $250 deductible, for “X” dollars a year. I found a HDHP insurance compatible with a HSA from the same company. The deductible is the $5,650 allowed for family HSA’s. The cost is “X”, minus six thousand. So the price difference was a little bit better than the increased deductible.

    So for the same price, I get insurance, where a lot of the money spent, I get to keep.

    Some years I spend it all, some years I save.

    For someone with chronic illness who really does spend more than the deductible every single year…..it’s a wash financially.

    So fine, not everybody does better with HSA’s. Some people just break even.

    For my family, and for my employees, it was a net gain overall.

    Employees who leave, now have savings that can be used to pay premium. Surely you’ve run into patients between jobs, uninsured because they can’t afford the big premium hit for a regular PPO with no money coming in. Now the departing employee has savings to pay premium and keep at least catastrophic insurance between jobs, and some routine care along the way.

    I don’t know why it’s such a big deal for a practice to figure out what to do with a patient with a HSA. It’s no different from someone with regular PPO insurance and a deductible. Just a higher deductible.

    I’ve been using it for years, sometimes we hit deductible, sometimes we don’t. When we don’t hit deductible, we carry over the savings to next year.

    My only regret is we couldn’t open one twenty years ago. By now, we’d have saved enough to cover our deductible out of dividends.

    For a lot of people, I don’t think the fear is HSA’s won’t work. I think the fear is HSA’s WILL work.

  • Anonymous

    I don’t understand what’s the big outrage over HSA’s. It’s basically a PPO with a bigger deductible.

    My practice has patients with catastrophic insurance, they always put aside money for smaller medical expenses within the deductible. Now they get a tax break for doing the same thing.

    I looked at the price of a typical PPO policy, and one with the big $5600 deductible for a family. The savings was about $6000 annually. So I buy the high-deductible policy, use the savings to fund the HSA, and I actually come out a little bit ahead. It’s a no-brainer.

    We have health issues, but not always significant enough to hit the deductible limit. So some years we come out ahead, some years we break even compared to a typical PPO.

    If someone had ongoing major chronic health problems, a HSA would be a wash financially compared to traditional coverage.

    We’ve had HSA coverage for our family and our practice employees, it works just fine.

  • Anonymous

    >>I’m 60, in excellent health, take no meds, work out regularly, low blood pressure, weigh less than I did in college. My family coverage, self and wife, with a 2,000 deductible is about $1,200 monthly. I’m out of pocket $16,500 plus copays before I’m covered. How is an HSA going to help me?

    My numbers are similar. We were quoted a similar prce for a PPO with a similar deductible. We went to a high-deductible plan with a deductible of about $5600. The insurance cost a little over $500 a month. So monthly savings about $600 compared to the PPO. We put that savings into the HSA. Some years we spend the deductible, some years we don’t.

    It helped us, and out health picture sounds a little more complicated than what you described.