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Comment by tptacek | Hacker News Reader

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?

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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 the HSA. The premium savings from the low deductible plan (which isn't available any longer) really doesn't make up for the higher deductibles. All it takes is one small series of events (e.g. a complicated pregnancy) for $10K to go out the window. If these series of events happens from December - January, that's 2 years of deductibles out of your pocket.

I work for a huge company and I'm surprised the insurance is so expensive. For the first time in my life I think one of major criteria of my next job will be the healthcare benefits. Previously I was just happy to have insurance - no longer.

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 me to go to urgent care, say I dont have medical insurance, so I get a cheaper uninsured rate, then submit my medical care expense to my HSA for reimbursements, then if I hit the yearly deductible, claim I have insurance.

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.

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 tax savings for many middle class families is minimal due to an HSA due to the recent tax reforms providing a $2k per child tax credit.

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. Once we hit the deductible then insurance covers 80% of the cost of most things until we hit our max out of pocket and then they cover 100% of most things, in-network. The most I can put into my HSA is $7k per year.

For about $19k/year in the NY state run insurance marketplace I could buy a HDHP with a $2k deductible and $5k max out of pocket. For $24k/year I could buy a plan that has a $35 copay for pretty much everything. My employer's plan isn't any better than what I could buy on the open market but it IS better for me because I only have to pay a fraction of the premiums.

> 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.

Regarding price negotiation, my wife and I have asked multiple doctors, nurses, and billing departments to tell us how much a given service we have received will cost. Both before the service and after the service. We've even called the insurance company with the billing codes from the doctor's office to get quotes.

NO HUMANS CAN TELL US HOW MUCH ANYTHING COSTS!

We are continually told that we have to wait for the insurance company to come back with the pricing after the service has been rendered. This is the most infuriating part of it, there is no way for us to understand the costs of services which are recommended to us by our doctors. We are not able to shop around or to understand if we could/should delay any particular service because of cost/benefit ratio because we do not know the cost of anything ahead of time.

At least our preferred local pharmacy will usually call us prior to filling any expensive prescriptions to make sure that we understand the cost. I assume the pharmacy has enough people balk at the cost after they've already filled the prescription and then they have a bunch of headache dealing with putting the pills back so they've gotten proactive about it.

When I was shopping around I was told by hospital rep, that they can't tell me the price, because of a) they don't know until they talk to insurance company, b) EMTALA prohibits that.

I had to negotiate an emergency CAT scan for my daughter about 8 years ago, and they ultimately had to make up a price on the spot for me ($1000).

Lack of price transparency is an enormous problem with our current system. Of course, it's a problem on the provider side of the system, not the payer side, which is where everyone spends all their attention.

There's also a weird income range where in effect the government funds the HSA.

For example, in my state for someone of my age, someone making just enough to not qualify for expanded medicaid gets a subsidy of $1000/month. As income rises to 400% of the poverty level, the subsidy amount drops to $660/month. The subsidy drops to $0 if the income rises above that.

Since an HSA contribution, like a 401k or IRA contribution, comes before taxes, it lowers the income used for ACA subsidy calculations.

The result is that if your income, after 401k or IRA contributions, is such that you do not qualify for an ACA subsidy, but you missed qualification by less than the HSA contribution limit ($3500 in 2019, $4500 if you are 55+), then if you go with an HSA plan and contribute enough to get under the subsidy limit, the subsidy that will get may be more than your HSA costs. Whether or not it will be depends on your age, and how much over the cutoff you were.

It's a ridiculous situation.

Even more ridiculous, the way the subsidy goes from several hundred to nothing as you cross the cutoff means that there are people who are better off taking a pay cut to get into subsidy territory. I know someone who by putting the maximum into his retirement accounts and his HSA was able to just get into subsidy territory, but is now going to have to watch carefully near the end of the year to make sure dividend income from investments doesn't push him over. If there is any danger of that, he might have to go on unpaid leave for a while from work.

I'm self-employed, so I get insurance through the marketplace. The plans that qualify for use with an HSA are more expensive than plans that are not legally HDHPs, but just happen to have a $6000 deductible and $7900 max out of pocket. They are so much more expensive, in fact, that they completely negate the tax advantages (which are significant.) As a result, I contribute to a basic savings account instead of an HSA, but I could see many people hoping for the best and not saving at all.

This has been my experience, too. I've been self-employed since 2004 and had an HDHP w/ an HSA prior to the ACA. The premiums from 2004 to 2014 were lower than equivalent non-HDHP's, but post-ACA (we dumped our pre-ACA plan because I had a pre-existing condition that was not covered in our pre-ACA plan) we've seen equal or high premiums for HSA-capable HDHP's to non-HSA-capable plans.

Generally, but I think that's a bit of a "hey people without a lot of money who can't afford more... you should save money" there.

Not that they shouldn't do it, but a slight paradox there.

The point was that the premium was lower so you could save the difference and instead of that difference going to waste each year, it could compound over time.

HSA is spend it or lose it.

You’re thinking of FSAs

Nonono.

That's an FSA. You can hold on to your HSA indefinitely and withdraw for medical reimbursement at any time (decades later).

You're mistaken, but it's an easy mistake to make.

There's an alphabet soup of FSA/LPFSA/HSA/DCFSA options.

An HSA is truly your own savings account, owned by you (just like any other savings account), regardless of where contributions come from.

Actually, that would an FSA. You can hold onto HSAs.

From what I understand, even the HDHPs have such high premiums that the point is not being achieved, especially if you have to go through the marketplace rather than the employer.

Due to rising healthcare costs, and employers reducing the portion of health insurance premiums that they want to pay for their employee (aka a paycut), that's going to be true regardless of HDHP or not HDHP.

HSAs aren't use it or lose it. That's FSAs.

tathougies was referring to the difference in monthly health insurance premiums. I don't see what their comment has to do with Flexible Savings Accounts.

yup!

I think I may have responded to the wrong comment here. Someone else was saying that HSAs are use-it-or-lose-it.

I mean, if a HDHP plan costs 400 / mo and a regular plan costs 1000 / mo, you get to save the 600 and let that compound over many years (if you don't use it), rather than lose the 600 in insurance premiums.

Not all employers offer HSAs to go along with their HDHPs. Mine doesn’t and it’s very frustrating. I want to save pretax money in an HSA but I can’t.

I thought if you have a HDHP you can open a HSA account. It didn't have to be through your employer.

Can you just open your own HSA account and do it yourself?

Short answer: generally, yes

I don't understand that. Literally the only "benefit" of a HDHP is the HSA. Why do employers not offer one?

Because you can get your own HSA, it does not have to be employer supplied. I have an HSA with Fidelity, and an HDHP from my employer.

Can you get a private HSA?

That’s the insanity of employer health insurance. Things like this should never be a decision of the employer. It’s the same stupidity with 401k.

There is no requirement for your employer to provide the HSA. Frequently the employer can get better deals on the HSA than you can individually (like no waived maintenance fees and the like) but you can for sure open your own.

In fact once you have enough money in there that you are moving out of liquid investments then you definitely want to shop around for HSA much like you would for an investment account.

Can you actually fund a non-employer HSA with tax-deductible funds, or is that a benefit that only applies to payroll HSA contributions? If not, a lot of the benefit of an employer HSA disappears.

(FWIW, I have an HDHP, employer HSA, and an individual HSA that I roll my employer funds to annually for lower-fee investing.)

Yes, just submit a form 8889 when filing taxes.

Where do you have your individual HSA? I have an employer-provided one and I'm looking for a place to move it.

HSA Authority (part of Old National Bank). Last time I ran the numbers, the break-even point on annual expenses vs some other options was about $10k in HSA balance — where smaller balances would pay more at HSAA than some other provider(s). But they cost less than other providers for larger balances (again, last time I checked).

https://www.oldnational.com/thehsaauthority

And for comparison, https://thehsareportcard.com/hsa-authority / https://thehsareportcard.com/the-top-10-investor-hsas-1 . The landscape may have shifted since the last time I did my research.

Fidelity has a pretty compelling offering: https://www.fidelity.com/go/hsa/why-hsa

Yeah, that looks competitive. It doesn't have the one highly specific fund I wanted at HSA authority but it's got everything you really need.

Only partially. If you fund your HSA outside of your company's payroll system you can deduct your contribution amount from your MAGI for income tax purposes, but you still have to pay FICA taxes (social security and medicare) on that income.

If you have your HSA contributions made through your company's payroll department, then you don't have to pay FICA taxes on it.

Yes you can, go to Fidelity and sign up for one. Takes like 10 minutes. Transfer money, buy a fund, away you go. Just like an IRA, except never taxed at any point. Besides employer matching it's the best freaking retirement deal there is.

That's not true. You don't need your employer participation to open an HSA.

Example HDHP plan where you pay $30 every month Full price at doctors, deductible of 5k (80/20 after), max out of pocket 10k Setup HSA to contribute $200 every month (tax benefit) If you go to doctor 2-4 times a year for minor stuff it works out great for you. If you use if for 4-5 years, savings add up and have some security in the future towards medical related costs.

Does not seem to work great for families with kids or someone who frequently visit the doctors, for young singles with no health issues it can work out great.

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?

I'm not sure - since I have either option, I don't feel screwed over, but if an HDHP were the only option I would definitely expect to see an increase in take-home pay.

Are you buying a family plan, because I'll bet there is a significant difference in cost to you if you were buying coverage for kids or spouse too.

In a decade of employment I've not had an employer offer a plan that wasn't an HDHP. It seems to be somewhat regional, but in my part of the country the last plans that weren't HDHPs were phased out in the late 2000s and seem unlikely to ever return.

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.

I think yes that is an effective strategy, especially given the economic incentives to having a HSA and how it is possible the manage the money in the account. However, the economically “supposed to” decision for the monetary difference is now up to the insured who may not understand nor desire to put some of that difference towards the same health causes rather than change spending habits. Awareness is important here.

In my company the HSA premiums are not much lower.

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