Friday, February 24, 2006

Why HSA's suck - for most people - Backup Brain:

From personal experience, I can attest that HSA's suck, even if you have a relatively high income, but are not absolutely healthy. In October 2004, we were forced into a high-deductible insurance policy, which is coupled with an HSA. We are financially able to save money to the HSA, but because we have ongoing health care costs, we've needed to draw down the saved funds. The health insurance has paid for exactly nothing in the time that we've had it, though of course we've been paying the premiums. All of our heath costs have come out of our pockets, sometimes (but not always) laundered through the HSA. There are only two "good" things about the insurance. One, we would have 80% coverage in the event of a hospital stay, after paying $4,000 out of pocket (that high deductible). Second, though we pay for virtually all of our health care costs, we pay at the rate that the insurer has negotiated with the providers, so at least we don't pay the full retail price. It's hard to call paying $90 instead of $150 for a routine doctor's visit a terrific deal, compared to the days when we had real health insurance.

Oh, and to get the most out of the policy, you have to be diligent about following all of the famously confusing paperwork and making sure that the insurer has credited all visits towards the deductible. If you want prescription costs to count towards the deductible, you have to keep all the pharmacy receipts, make copies, then submit each receipt as a separate claim. Mind you, you won't get any money back for doing that bookkeeping; it just counts towards the deductible, so if you do get catastrophically sick, it will cost you a bit less out of pocket.

In short, I've already seen the Bush future. It has cost me more money, and I've gotten less health care for that money. It incentivizes me to put off going to the doctor because of the cost, thereby increasing the chance that I'll put off getting early treatment for illness. It's more complicated and bureaucratic. It sucks.