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Comment by yardie | Hacker News Reader

I think it only delays the inevitable and ends up making things worse. If people don't have the money for surgery (and really how many of us can pull ou $5000, right no). They'll delay it. Delay it too long and that $4000 surgery becomes a $50000 intensive care, emergency operation.

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I keep a savings account around with a minimum balance of $5000. The only reason I have that money sitting there and I am not using it as a down payment for a car I so desperately need is because I need it for my high deductible plan. I also have an HSA (health savings account) that I am slowly adding money to every month, which at the moment is mainly used to pay for prescriptions and the like.

Now, one could suggest that I change my plan to a non-high deductible one so that I don't have to keep that money sitting around in savings, but then my costs per month would go up $300, whereas my high deductible plan is entirely paid for by the company I work for. I don't go to the doctors nearly enough to that the extra money I spend per month would counter-act the amount I am paying out of pocket now because I never reach my deductible.

This misses the point of high-deductable insurance. It's not simply the idea that you should share more of the cost. The idea is, rather:

* Low-deductable insurance is inherently more expensive.

* The difference in premiums between low- and high- deductible insurance gradually funds your HSA.

* When you're young and you start your HSA, you also happen to be actuarially less likely to need the money going into your HSA, so it grows to cover your deductible (or, the savings gradually displaces whatever you deposited to start your HSA; whatever).

In the presumed common case, your deductible is fully funded by your HSA which is itself fully funded by the difference in premiums over a few years. That's all money that would simply have been remitted to your insurer if you had a low-deductible plan. The high-deductible plan leaves you better off.

(There's also the more meta point that health insurance exists to keep you from being bankrupted by e.g. appendicitis, and not as a cost-saving plan for routine care.)

The RAND experiment disagrees with you. It shows that cost sharing induces people to use 30% less medicine with no significant effects on health.

http://www.rand.org/health/projects/hie.html

Unfortunately, we never repeated the rand experiment, so it's a bit dated. For some reason we never tried repeating it before pushing massive changes in the law.

"No significant effects on health" isn't entirely accurate; the "average" participant had no negative effects on health, but several of the subgroups did, mainly poor people with chronic conditions who had better compliance with treatment regimens, and better outcomes, in the free-care case. Here's the abstract: http://www.nejm.org/doi/full/10.1056/NEJM198312083092305

I'm familiar with this paper. Unfortunately it's deeply flawed.

The RAND health experiment studied 30 measures of health. Two of them were statistically significantly improved - vision (due to free eyeglasses, p=0.001) and blood pressure (p=0.03).

Simple math shows that 0.97 ^ 30 = 0.4. This means that the RAND experiment had a 60% chance of showing an effect in at least one particular submeasure even if there was no effect in any of them.

(The result on eyeglasses is strong enough to avoid this effect, however. So we can conclude that free glasses help people see better.)

Did they use 30% less surgery too?

Usually, you should always get an insurance deductible as high as you can afford to pay out of pocket. If you can't afford to pay the deductible out of pocket, you should look for a lower one. So a $5000 deductible isn't for everyone, but it would be good if the people who could afford it would start to use it and bring some price-sensitivity into the system.

Most young people would (a) be better served in the immediacy by the highest possible deductible and (b) once established in one, grow into middle-aged people who have set aside that deductible just by maintaining their HSA.

Converting to high-deductible is a problem if you're living at or above your means and are approaching middle age. But presumably regardless of your socioeconomic status, if you're just starting out in the market, given the choice between high- and low-, you're better served with high-.

What's this about the HSA? I thought HSAs expire every year.

No, that's an FSA. (Amusingly, someone voted this down; on HN, this is apparently a matter of opinion).

and really how many of us can pull out $5000, right now

If you don't have an emergency fund (~$1000) and a few months of living expenses saved up, please try and do so.

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