Employees Start to Feel the Squeeze of High-Deductible Health Plans • Hacker News Board

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

#101

Post by kxyvr » Fri, May 03, 2019, 5:41 PM UTC

lotsofpulp wrote: post #81

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 med…

This is not to say that you're wrong, but I don't completely understand your numbers. My understanding of the triple-tax advantage of HSAs are that

1. Money going into the HSA is pre-tax

2. Investment gains from the HSA are not taxed

3. Money used from the HSA for qualifying health expenses is not taxed

That said, there are many restrictions and two of these benefits seem to be included for self-employed individuals. For example, an HSA can not be used for over the counter drugs unless there's a prescription:

https://www.irs.gov/newsroom/affordable-care-act-questions-a...

However, prescriptions can already be deducted without an HSA if one is itemizing:

https://www.irs.gov/taxtopics/tc502

Alternatively, the above link also states that things like office visits to a physician can be deducted, which are things normally an HSA are used for.

Basically, the one benefit that seems unique to an HSA is that the investment gains from the money in the account are not taxed, which is great assuming that this money is used for medical expenses or you make it to 65.

Again, I'm not saying you're incorrect, but it looks like self-employed individuals automatically benefit from 1 and 3 above, assuming itemization. As such, it's seems like the trade off is whether the higher premium, which is less high due to the tax write-off, is worth lower the lower cost of a physician visit. Assuming, of course, we haven't gone catastrophic. What am I missing?

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

#102

Post by lotsofpulp » Fri, May 03, 2019, 5:42 PM UTC

maxxxxx wrote: post #26

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…

Totally agree. All “innovations” like HSA and 401k are designed to make life easier for employers but are sold as benefit for employees.

401k are tied to employers, but I don’t see what HSA has to do with employers since they’re just as easy to have without an employer. It’s just a savings account with tax advantages for people with HDHP.

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

#103

Post by trynewideas » Fri, May 03, 2019, 5:43 PM UTC

etchalon wrote: post #95

At Mess (my agency), we were sort of forced into going with a HDCP, but we found a way for it to be a win for everyone. Our absolutely-perfect no-deductible no-coinsurance plan was retired, and every year, for five years, the cost of our reasonable-deductible no-coinsurance plan kept going up. Eventually, our broker convinced us that HDCP was the only way. But I absolutely hated it. We have quite a few employees with…

Taxes. HRAs can be a huge headache for employees (never employers). SEHRAs also have a bad reputation for being the worst of both HSA and more traditional insurance plans: underfunded, high overhead for employees, all for severely limited provider choice.

ICHRAs (individual-coverage) are the real bridge between HSAs and traditional insurance—you can use them as an HRA-style account _or_ use the money to buy an insurance plan off a marketplace. While it still pushes the burden of choosing and managing health care onto the employee, they at least have flexibility in coverage as well as tax benefits for both employees and employers.

They, uh, also don't exist until 1 Jan 2020, and they give total control to the employer. If you're a good employer, that's great. If you're a shitty one, the employee is easily fucked over.

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

#104

Post by lotsofpulp » Fri, May 03, 2019, 5:44 PM UTC

dsfyu404ed wrote: post #23

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…

If you spend a lot on healthcare (i.e. have a family) then a HSA works fine since you hit your maximums really quick and then only pay some small % of the sticker price after that. For everyone who isn't gonna spend a few grand in healthcare every year it totally sucks and is a massive incentive not to have routine care done.

That doesn’t make sense. If you spend a lot on healthcare, then why would you want to spend it out of pocket from HSA instead of letting insurer pick it up with a non HDHP?

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

#105

Post by trynewideas » Fri, May 03, 2019, 5:44 PM UTC

rockinghigh wrote: post #65

goobynight wrote: post #29

While I am satisfied with my HDHP + HSA, I'd be a lot more worried if it were my only option (I'm only young for now) or if I didn't make/save as much. People are getting hit with HDHP only and no HSA? That's rough.

Anyone with an HDHP plan can get an HSA. Whether it's through your employer or through another plan provider like Fidelity or Vanguard.

An HSA with no employer contribution, or even administrative assistance, is like throwing money into a trash can, except at least if you throw money into a trash can, you can wheel it down to any hospital and they'll probably accept it.

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

#106

Post by apohn » Fri, May 03, 2019, 5:45 PM UTC

IronWolve wrote: post #52

apohn wrote: post #32

Earlier quoted context omitted.

I think the value of this really depends on the employer. At a previous role they started switching to an HDHP with an HSA and did a great job (initially) making that fairly attractive versus the low deductible plan with higher premiums. At my current employer, the deductible per person is close to $4000 and the family limit is ~$10K. The employer provides some money if you have an HRA, but very little if you take th…

Same, Work switched to HSA medical. Pre-ACA single employee had basically medical paid by work, Post-ACA, they moved to an HSA (almost mandatory I guess) that work kicks in money per paycheck. BUT, now I have to match the minimum and have a high 8k deductible. So everyone just took a pay cut post-ACA, and if we use the medical, we even pay more. No more co-pays, I have to pay full price doctors visits. Its easier for…

Something that really frustrates me about my current HDHP/HRA plan is that it feels like it only makes sense if somebody in the family has a minor issue(e.g. the flu) that is covered by the few hundred dollars the employer puts in the HRA, or if somebody has a major medical issue that would have destroyed our savings.

Between those two extremes, the value of having insurance is just all the mysterious insurance "adjustments" on every medical bill. As you pointed out, there are probably lots of situations where saying I have no insurance makes more sense from a financial standpoint.

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

#107

Post by maxxxxx » Fri, May 03, 2019, 5:45 PM UTC

lotsofpulp wrote: post #102

maxxxxx wrote: post #26

Earlier quoted context omitted.

Totally agree. All “innovations” like HSA and 401k are designed to make life easier for employers but are sold as benefit for employees.

401k are tied to employers, but I don’t see what HSA has to do with employers since they’re just as easy to have without an employer. It’s just a savings account with tax advantages for people with HDHP.

are you saying that if your employer offers a high deductible plan without HSA you can open one for yourself? I don’t think many people know that.

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

#108

Post by WrtCdEvrydy » Fri, May 03, 2019, 5:46 PM UTC

JMTQp8lwXL wrote: post #87

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 perspect…

My favorite one was pregnancy being a pre-existing condition so if your husband got fired (noone would ever fire a pregnant woman for no reason), you couldn't get insurance when you needed it the most.

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

#109

Post by LarryDarrell » Fri, May 03, 2019, 5:47 PM UTC

mieseratte wrote: post #72

tptacek wrote: post #38

Earlier quoted context omitted.

I'm not seeing the connection to the ACA in your argument. If your argument is that the ACA raised the price of health insurance, that's incorrect: health insurance premiums had been skyrocketing prior to the ACA (that crisis was what generated the political capital to pass the bill), and the ACA in fact reduced the rate of growth in health care costs.

I signed up for the ACA the year it came online. Over the years I went from a sub-$100 plan that actually covered things to paying $300+ per month for the "hit by a bus" plan that was so expensive, one year I said fuck it and paid the penalty instead. I understand well what could have been had something truly happened, but I ended up saving money paying the penalty while still having a few minor doc-in-a-box visits o…

It is corporate welfare, I remember lots of libertarian arguments to that very point. But to solve health care in the US you would eventually have to start questioning the for-profit underpinnings of the whole enterprise. That was far too much to expect from the generally pro-market Democrats in office at the time.

Even after Bernie Sanders, the "Very Serious Democrats" talk more of protecting the Health Insurance Industry than anything else. Best case, we'll see a timid proposal of a expensive Medicare Buy-In added to the ACA exchange that will never get past the Senate.

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

#110

Post by lotsofpulp » Fri, May 03, 2019, 5:47 PM UTC

tptacek wrote: post #34

defen wrote: post #25

Earlier quoted context omitted.

If it's an employer-provided plan, though, you don't generally see the premium savings. My employer provides the option (through one of the major payroll/HR providers) of a "regular" plan or a high-deductible plan, but neither choice affects my take-home pay. I still chose the HDHP though because I'm generally healthy and it lets you invest pre-tax money with no capital gains tax, which is nice.

Ok, so then, the nut of this story is that employers are adopting HDHPs as a way of reducing their own costs, but not passing the savings to employees, which defeats the purpose of HDHPs and just amounts to screwing employees over?

Or employers can reduce pay raises. Or cut pay. Or do any number of things to hit whatever net income targets. Ideally, we wouldn’t have employers involved in all this price obfuscation, and it would be easy for employees to compare compensation.