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Employees Start to Feel the Squeeze of High-Deductible Health Plans

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Re: Employees Start to Feel the Squeeze of High-Deductible Health Plans

#81

Post by lotsofpulp »

kxyvr wrote: post #70

For those of us who are self-employed, I'll mention that low or no deductible health plans may provide better value. When they sort of work, health deductible health plans are nice because: (1) monthly premiums are low and (2) they give access to a health savings account (HSA) where some amount of money can be stored pre-tax and then used for health related expenses. Of course, none of this saves someone that gets ha…

The tax savings on the difference in premium between high deductible health plans and low deductible health plans is probably $2k at most ($6k in extra premiums @30% tax rate). That’s for single coverage, but even for family total year tax savings can’t be more than $5k.

In either case, triple tax advantage of HSA is far more, especially due to compound growth.

If you have the cash to be able to deal with $10k of medical expenses in an emergency, HDHP + HSA is a no brainer

Re: Employees Start to Feel the Squeeze of High-Deductible Health Plans

#82

Post by bradstewart »

jandrewrogers wrote: post #54
duxup wrote: post #3

Earlier quoted context omitted.

How so? The choice of covering crappy plans is the employer's choice... and crappy plans are what have been pushed AFTER the ACA was passed. Largely by the GoP... Is that what the ACA was, or what someone(s) who want it to fail want? There's a weird narrative where any event is tied to the ACA while they ignore what the healthcare system is in the US overall.

The cost to employers of very good plans massively increased after ACA went into effect. When this changeover happened, I was running a company where we paid 100% for one of the best healthcare plans available in the state for both the employees and their families -- people really appreciated this benefit. This was the polar opposite of a "crappy plan", and it wasn't inexpensive to begin with. After the ACA, this pla…

This happened with my employer as well. And this is/was before the "Cadillac tax" came into effect (I believe it's been pushed back to 2020 now).

Re: Employees Start to Feel the Squeeze of High-Deductible Health Plans

#83

Post by mrosett »

rockinghigh wrote: post #56
mrosett wrote: post #2

You can argue that the ACA improved the healthcare system overall. But it's been tough for people who were already covered by employer insurance. I think people fail to appreciate that prior to the ACA, when the healthcare system worked, it actually worked really well. I got very sick at the age of 20 while I was still on my parents very modest insurance (pre-ACA). Within 48 hours I had an appointment at the best onc…

The increase in high-deductible health plans (HDHP) enrollment predates the ACA by many years. You can look at the trend here: https://www.cdc.gov/nchs/products/databriefs/db317.htm Their role is to protect against very high bill of $5,000 and up due to major surgeries, illness, pregnancy, and so on. They should definitely be completed by a health savings account (HSA) for day-to-day coverage.

That's interesting data. Thanks for sharing it. In the 2017 snapshot, I'm surprised to see that HDHP plans are slightly more common for high-income families. I didn't expect that.

There's a missing variable here: What are the premiums? HDHPs are attractive to insurers (and by extension employers) because they increase employee sensitivity to healthcare costs and may lead to less wasteful spending. Advocates emphasized that the savings on premiums could be passed on employees as HSA contributions [1]. But as that chart shows, a quarter of Americans have an HDHP without an HSA, and at every point most HDHPs haven't come with an HSA. Are employers just keeping the premium savings? Or have rising healthcare costs meant that the savings haven't materialized?

[1]: https://www.wsj.com/articles/SB10001424052970204251404574342...

Re: Employees Start to Feel the Squeeze of High-Deductible Health Plans

#84

Post by pnutjam »

kxyvr wrote: post #70

For those of us who are self-employed, I'll mention that low or no deductible health plans may provide better value. When they sort of work, health deductible health plans are nice because: (1) monthly premiums are low and (2) they give access to a health savings account (HSA) where some amount of money can be stored pre-tax and then used for health related expenses. Of course, none of this saves someone that gets ha…

my last employer had 3 plans, all high deductible. The one with the lowest deductible was significantly more if you hit the max out of pocket and included the higher premium. It was like $10k vs $6.5k, worst case.

Re: Employees Start to Feel the Squeeze of High-Deductible Health Plans

#85

Post by defen »

bradfa wrote: post #76
tptacek wrote: post #4

Isn't the point of an HDHP that you're supposed to set up an HSA to go with it? Premiums for HDHPs are significantly lower than for normal health plans; the idea is that you're supposed to use the premium savings to fund the HSA, which is then money that carries over year over year, right?

Yes, one of the benefits of a HDHP is that you can use an HSA which can help since pre-tax dollars can be put directly into an HSA by your employer either as a part of your compensation package or as deductions from your paycheck (you can also make deposits with post-tax dollars and deduct them at tax time but you don't get the FICA taxes back then). Many company provided HDHP don't have THAT low of premiums and the…

> For example, I enroll my family in my employer's HDHP. The total premiums from our plan is about $19k this year (employer pays about $14k, I pay about $5k). For this, we have $4k deductible and an $8k max out of pocket coverage.

Posts like this really emphasize to me how broken healthcare in America is. This is a fairly standard setup and yet you're paying $23,000 per year before you get anything from your insurance other than price negotiation. The median annual personal income in the USA is $31,000.

Re: Employees Start to Feel the Squeeze of High-Deductible Health Plans

#86

Post by WalterSear »

mrosett wrote: post #51
WalterSear wrote: post #37

Earlier quoted context omitted.

It's more extreme than your example. The parent is ignoring the fact his great healthcare experience is predicated on them being able to drop him the moment they could, when his illness became too expensive. Ending pre-existing conditions was the game changer in the AMA. Treating people is obviously more expensive than not treating them.

That's just not how it worked with employer insurance. Perhaps they could drop your whole company, but the insurer couldn't unilaterally cancel a single employee's plan.

https://www.chicagobusiness.com/article/20140918/NEWS03/1409...

Re: Employees Start to Feel the Squeeze of High-Deductible Health Plans

#87

Post by JMTQp8lwXL »

mrosett wrote: post #2

You can argue that the ACA improved the healthcare system overall. But it's been tough for people who were already covered by employer insurance. I think people fail to appreciate that prior to the ACA, when the healthcare system worked, it actually worked really well. I got very sick at the age of 20 while I was still on my parents very modest insurance (pre-ACA). Within 48 hours I had an appointment at the best onc…

Pre ACA, pre-existing conditions could disqualify you from insurance. People with pre-existing conditions are the people that need health care coverage the most. We can't under-weigh the moral obligation we have to this previously marginalized group, when considering service may be slightly worse for people who have employer coverage.

How I see it: if you were in the pre-ACA pre-existing condition pool, your perspective would be vastly biased in a different direction. And nobody wants to end up in that pool. Nobody chooses that. That's why it's a net win overall.

People died because they don't have coverage (unfortunately, still happens, but substantially decreased by ACA). If things are slightly worse for people who already had access, It's such a small price to pay.

Re: Employees Start to Feel the Squeeze of High-Deductible Health Plans

#88

Post by mrosett »

jandrewrogers wrote: post #54
duxup wrote: post #3

Earlier quoted context omitted.

How so? The choice of covering crappy plans is the employer's choice... and crappy plans are what have been pushed AFTER the ACA was passed. Largely by the GoP... Is that what the ACA was, or what someone(s) who want it to fail want? There's a weird narrative where any event is tied to the ACA while they ignore what the healthcare system is in the US overall.

The cost to employers of very good plans massively increased after ACA went into effect. When this changeover happened, I was running a company where we paid 100% for one of the best healthcare plans available in the state for both the employees and their families -- people really appreciated this benefit. This was the polar opposite of a "crappy plan", and it wasn't inexpensive to begin with. After the ACA, this pla…

This is exactly the point I was trying to make in my original comment. Really good healthcare plans (with minimal deductibles and great coverage) used to be a benefit that employers could reasonably provide. Employees/family members who got sick would get good coverage without going broke. Now the cost is of providing that kind of coverage is completely untenable.

Re: Employees Start to Feel the Squeeze of High-Deductible Health Plans

#89

Post by Someone1234 »

mrosett wrote: post #51
WalterSear wrote: post #37

Earlier quoted context omitted.

It's more extreme than your example. The parent is ignoring the fact his great healthcare experience is predicated on them being able to drop him the moment they could, when his illness became too expensive. Ending pre-existing conditions was the game changer in the AMA. Treating people is obviously more expensive than not treating them.

That's just not how it worked with employer insurance. Perhaps they could drop your whole company, but the insurer couldn't unilaterally cancel a single employee's plan.

I know someone who pre-ACA had employer insurance who was dropped by that insurance after they got skin cancer. The official reason was lying during the application process (10+ years earlier).

They forgot to list childhood Asthma on their application form ten years earlier.

Re: Employees Start to Feel the Squeeze of High-Deductible Health Plans

#90

Post by smacktoward »

rb808 wrote: post #36
paxys wrote: post #8

High-deductible health plans were always designed to benefit employers. My company switched us to one with a big PR campaign highlighting how everything would be better (contributions to HSA - free money!). The only "advantage" is that companies have to pay smaller premiums and employees are greatly discouraged from getting care due to high costs. Funny enough, employers are rethinking this now since employees not ge…

Obamacare also added an extra tax on the best health insurance. The problem when no one has to pay anything is that people don't care about price. > an annual 40% excise tax on plans with annual premiums exceeding $10,800 for individuals or $29,500 for a family starting in 2020 (delayed further) https://en.wikipedia.org/wiki/Cadillac_insurance_plan

> The problem when no one has to pay anything is that people don't care about price.

And yet somehow the U.S., where we expect people to pay for their health care, spends twice as much per capita on health care as the average industrialized country: https://www.pgpf.org/chart-archive/0006_health-care-oecd

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