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Comment by supportengineer | Hacker News Reader

Here are the magic words in US Health Care: "What is the cash price?"

It's usually less than you think and often worth avoiding the insurance company hassle. Then you can just get reimbursed with your FSA or HSA anyway.

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FSAs are insane, conceptually.

"Guess how much money you're spending in a year on healthcare! But beee caaareful: if you guess too high, YOU LOSE IT"

I still used mine while I still had access to one, but it was grumpy-making and was usually almost more trouble than it was worth.

I don’t understand why any decision maker in any business in the USA chooses to offer their employees (and hence themselves) health FSAs at all, especially when the much superior in every way Fidelity HSA is available.

HSA requires a high deductible health plan, not everyone could afford that deductible.

"To contribute to an HSA, you'll need to be enrolled in an HSA-eligible health plan, also called a high-deductible health plan (HDHP)."

Yup, I agree HSA is superior but depending on your situation (and plans offered), the HDHP can be much more expensive out of pocket[1], even if you're paying with after tax dollars. Sweet spot I think is using a good low deductible plan when it makes sense but having a spouse with an HSA which both spouses can use for expenses.

[1]: or so it seems, I tried to figure this out earlier in the year and the data is just lacking in order to make a perfect decision.

HSAs are only available alongside high deductible plans (HDHP), which aren't necessarily ideal in all situations. FSAs are the only option like that if you don't have an HDHP.

What is the point of having a low deductible when you could put the premium difference in a HSA and use it on either the deductible or something uncovered?

The math on whether you are ahead with the HSA or not is non trivial, especially if you are married and neither employer offers any subsidy when you put your spouse in your plan. HSAs are often better, but it's a very unfortunate math problem, where you carry quite a bit of risk. The HSA contributions from your employer are often nowhere near enough to make it win all the time. If your employer's does, consider yourself lucky. On any given open enrollment, my household has at least 30 combinations of healthcare plans to consider, and that's ignoring dentals, visions and the like

There are some cases where an HSA is unavailable. I've had an employer not offer a high deductible plan. I've had an employer offer a high deductible plan, but the insurer not supply it in my home state.

There are cases where it doesn't make fiscal sense. One employer covered 1x premium/employee(spouses and kids were full rate).

Surely, that is offset by having to forfeit or waste any FSA money not needed by the end of the year. It really only makes sense if you have a minimum amount of guaranteed healthcare expenses every year.

All the FSA money in your account is available immediately at the beginning of the year. Ironically that would make it a better choice for anyone with a lot of medical expenses on an HDHP if it wasn’t for the fact that FSAs are capped by law.

As someone who does deal with enough medical stuff to clear the deductible (and sometimes the OOP max) on their normal health plan annually, it’s still much more convenient, again because the money is all there at the beginning of the year when the expenses are highest

My HSA money is also available in the first pay period of the calendar year. It’s up to the employer to decide when they want to contribute it.

That assumes your employer does any contributions to your HSA. And if your employer is sticking you with an HDHP, that’s not always a given. Your own payroll deductions are pay-as-you-go

I think he is saying that if you want your FSA to be $5000 then it’s funded immediately but it gets taken out of your paycheck every pay period.

HSA is funded as you go

FSAs are limited in scope if you have a HDHP by law. Only LPFSAs are allowed. HSAs don’t have that restriction other than you have to be on a HDHP to get it

I've never seen the point of HSAs, either. The only benefit is the tax difference. There are (usually unknown, unstated upfront) plan fees that eat into that, and coupled with the higher deductibles and worse plan coverage, you're going to pay more out of pocket. It's never been clear to me if (higher OOP + plan fees) < (tax savings) is true, like they want you to believe.

And it's a time suck.

An employer sponsored HSA is the single most tax advantaged account in the US, and Fidelity HSA have no fees. No FICA tax, no income tax going in, on investment returns, and coming out. Worth tens of thousands of dollars over 20, 30, 40+ years.

If your employer is shitty and doesn’t offer Fidelity HSA, you can also easily rollover the HSA funds to Fidelity every year to avoid the fees.

The coverage for HDHP plans is the same, since it’s the same insurer. The only change is deductible/copay/oop max, which is offset by lower premiums and higher cash flow for younger/healthier/higher earners shouldn’t matter.

HSAs are one of the best accounts and last until death.

I lost some money, or at least had a hard time using it, because I was quoted a price for something, set the FSA for the next year based on that, and then the billing ended up where only some of the price was eligible for FSA.

Combined with the PITA level, there's no way I'm doing it again. I can't see how it's worth my time. One of these three options is very likely:

a) my income level is low, so every dollar counts, but my marginal tax rate is also low, so spending a ton of extra time on this is not worth saving ~ 15% on taxes for health care

b) my income level is high, so my marginal tax rate is high, but saving 40% of taxes for health care is not worth the time, because health care is not a meaningful amount of income

c) my health care spending is high relative to income, and I can deduct health care costs on my tax return. Then I can deduct a lot more than the FSA will reimburse for, and the records don't need to satisfy a third party, unless I'm audited by the IRS.

There are a few caveats with the medical expense deduction.

* It's only a deduction for income tax. FSAs let you save on FICA as well.

* It's an itemized deduction. You only benefit after your total itemized deductions exceed the standard deduction. Fewer people are itemizing nowadays because the federal standard deduction is large.

* There's a 7.5% of AGI floor: you can only count medical expenses that exceed this fraction of your income.

FSA does have the concept of rollover of up to $600 but its up to the employer to decide. I imagine that full rollover is not allowed because otherwise people would use the FSA to defer some tax payments to end of year. But there are ways they could have handled it better.

It is a relatively easy fix tbh. You spend on medical bills through the account like you do right now, but the way you fund it is your post tax contributions. At the end of the year the account sends you a statement of what you used and you can use it to get the tax paid on the money back when you file the taxes.

And if you're wrong on your medical expense paperwork it could be a felony!

Why shouldn't the institutions that do this all day and claim it as their special expertise handle all of this? Why should I even be /capable/ of losing money due to my lack of experience with the system?

The money is forfeited back to the employer. There should be a law that money is now taxed and forwarded to the employee in their regular payroll.

This system is designed to screw over regular consumers.

Like I said, you don’t have to do anything. It’s would be like your W2 as long as you use your account.

What do you mean by 'use the account'? Spend the money? That's the problem. If you don't have enough expenses you just lose the money. That's why I've never used one of these.

It’s not great for everyone but if you have kids with braces, family members who need yearly glasses, consistent prescription costs, etc then it is pretty easy and worthwhile.

Please read the entire thread for the full context which you are missing.

If by "the entire thread", you mean all the ancestors of this comment, I already have.

I'm not sure which of these is supposed to be the context I'm missing. It may be the "It is a relatively easy fix tbh..." comment. I couldn't understand the wording of accounting procedure there.

> At the end of the year the account sends you a statement of what you used and you can use it to get the tax paid on the money back when you file the taxes.

If you underestimate the amount you spend by more than the rollover limit, you can't get that money back.

So on top of the broken employer-tied health insurance system, we have gamified the financing of out of pocket medical expenses.

On top of that, if you lose your job part way through the year, you lose the balance of any FSA funds remaining (they belong to your employer - I found that out the hard way).

The comment was about how to fix the current FSA. Instead of funding it with pre tax dollars and then losing it if you don’t use it, you fund it with post tax dollars and then get a reimbursement on your tax filing annually. That way, you can fund it as you need, spend it and then get back the tax because you spent it on medical expenses.

I misread that. Thanks for the clarification.

Cue that tuba/horn motif from "The Price is Right" (famous for "guess as close as you can without going over")

> FSAs are insane, conceptually.

Indeed. I don’t understand why they cant just make medical expenses tax-deductible up to a certain amount. The effect would be the same. Why do I need a separate account for it, and why do I have to guess how much I’ll need every year (as you pointed out)?

I guess at least part of the answer is that the companies administering FSAs make money out of this system. Sigh.

> I don’t understand why they cant just make medical expenses tax-deductible

We have that, although the deduction only starts after a certain amount which makes it useless to almost everyone.

The issue is that it only kicks in when you itemize your deductions and it has something like a $10k cap. The standard deduction is 15k for a single and 30k married.

Unless you have a bunch of other things to deduct, it's often the right choice to just use the standard deduction.

Unless your a homeowner with a mortgage, then it's almost always better to itemize

Not so much anymore. The standard deduction for a married couple is now above 30k. It would take a large mortgage to pay that kind of interest in a single year. (Principle is not deductible; only interest)

That's going to skew towards blue states and metros.

FSA makes no sense. The money should just go into an HSA and be available whenever needed. Nut just this year. It should just be abolished.

FSA exists in this strange no-mans land of many insurance plans where HSAs cannot go.

Yea, FSAs are dumb. Luckily nobody forces you to have one. Just get an HSA like a sane person.

I’ve only used HSAs. Can you reimburse prior year expenses from an FSA? If so, allocate the amount you sent last year, reimburse on Jan 1st.

HSAs are your money regardless once you have it (except management fees). So you can spend it until it is gone. FSAs are a very specific set aside for a single year of billing, you can neither spend it on a bill for say, December the year before, nor use it for medical care in January the year after.

lol totally agree. At my first job I had one, and totally misjudged. I ended up with an extra thousand dollars left and then had to read the fine print on what to spend it on - ended up buying a 10 pack of acupuncture sessions that I didn’t need but were very relaxing

Unless you have an approved gym membership for which it can be used for ! With 30% discount !!

where "approved" means approved by the FSA plan administrator, not by your doctor, even with prescription? Which gym was this? a large chain? IME very few gyms are approved. (which is bad health policy, considering how good they are at preventative medicine.)

Pharmtech: "With your current insurance we can't sell you this medicine at any price. We're under an agreement."

Me: "Okay, what if we don't go through insurance?"

Pharmtech: "$45 for the prescription."

Me: "That's a bit higher than last time."

Pharmtech: performs some sort of incantation "Okay, $12."

Me: "How did we go from not at any price to $12?"

for those of you keeping score at home, the medicine was generic colchicine which costs $.30/dose (https://pmc.ncbi.nlm.nih.gov/articles/PMC7851728/), and I was getting 12

Medicine not in formulary. Their clinical department decided it was not worth covering for $reasons. The Pharmacy, likely to be considered a preferred pharmacy, signed a contract to be bound by that company's clinical formulary for policyholders.

$45 was probably cash price, the they can let it go for if they do their ordering through a pharmacy supply group.

$12 may be a price with a discount program like GoodRx applied. Data changes hands behind the scenes to make the lower price at the till possible. Don't know how GoodRx works, but been around long enough to know you're probably the product.

You'll be amazed the complexity of the pharmacy benefits management complex.

t. Been there, seen it, tried to fix it best I could, left in abject horror.

Turns out there are rational commercial players in these markets if you just go all-cash. The price is abandoning the incantations and local pharmacies, hospitals, ignoring your insurance. Harder to do that with services, but it’s coming as well.

It’s deeply frustrating that the $12 doesn’t go towards the deductible. I just saved the insurer a bunch of money!

You did nothing from their point of view except waive having them cover the claim, thusly leaving more money on their hands to be managed longer. Your "price discovery" isn't something they aren't aware of. On the contrary, their surveillance/clinical team have been crunching the numbers and making unilateral decisions on how the population is best guided to drugs based on their bottom line benefit to the insurer.

You don't really factor into it except as an actuarial data point. But you might have kicked off an overpayment check back to the consumer in 12 months because golly gee, those pesky regulations! Don't worry though, you can hand it back because the premiums went up again!

I found another really interesting one when my wife needed $30k in dental surgery. We hurried up and got the American marriage so that they could use my dental insurance only to find out that my plan has a LIFETIME LIMIT OF $1200. But what came to our rescue was good old collective bargaining! They call it a discount plan and basically the way it works is that for a small fee an insurance company will essentially draw you up a plan that counts you as a member but where the insurance company is explicitly not liable to pay for anything at all under any circumstances. The practical upshot is that you as a new Crap-Tier member of this insurance plan get the same negotiated rates as everyone else on this insurance plan, including the ones who pay through the nose. You still have to pay everything out of pocket, but to use this as an example "everything" went from $30k to $18k with the stroke of a pen and $50 in signup fees. This is one of the few things that an insurance company is doing that I think is actually great. The rates are exceedingly reasonable, the upside is amazing and because it's not technically insurance there's no pesky BS about open enrollment or you have to be married or you can only use it if your costs are above x once you've paid y and only if you've spent more than z this year but less than alpha your entire lifetime etc. Purely and simply walking into the office and going "Hey, there's ten thousand of us. Give us a fair rate and gain ten thousand customers or don't and don't."

> Don't know how GoodRx works, but been around long enough to know you're probably the product.

- GoodRx was penalized $1.5m by the FTC 2/2023 [0] for sharing sensitive personal health information with third-party advertising companies (Facebook, Google, et al), without user consent. Then in 2024 it paid a $25m settlement arising from that action [1].

- GoodRx isn't subject to HIPAA, it can legally share "non-medical" information, i.e. your prescriptions, which often have a one-to-one (or one-to-few) correspondence to specific conditions. Hence, sidestepping HIPAA.

- its business model relies on collecting user data, which may be a concern for privacy-conscious individuals.

[0]: https://www.ftc.gov/news-events/news/press-releases/2023/02/...

[1]: https://www.hunton.com/privacy-and-information-security-law/...

There's an XKCD where the person who did the file download dialog for Windows visits some friends, https://xkcd.com/612/.

"I'm just outside town, so I should be there in fifteen minutes...actually, it's looking more like six days...No, wait, thirty seconds"

Sounds like that guy got a job setting prices for prescription medicine.

this is actually what it's like getting pants hemmed at men's wearhouse once the salespeople realize you won't be paying their rent today with the commission on a big purchase. I needed them in a week. Dude quoted me 3 weeks, then 10 days, then 8 days, then said he could get it done in 15 minutes. I get that under the hood capitalism is about charging the most you can get away with and offering the least the other guy will expect, and he's supposed to do the same and y'all strike a middle ground that makes nobody happy but is acceptable to everyone. But you're not supposed to flat out look at me and go "What's the worst you'll accept from me right now?"

I’ve found, as a fairly recent phenomenon, it’s often higher than the insurance price. The pessimist in me thinks that insurance companies have worked to close that loophole. They need to maintain the illusion of their utility, after all.

Sorta. The reason to go thru insurance is to count the money paid against your deductible. If you pay cash outside insurance, it doesn't.

And if you have an HSA, you have a high deductible plan.

This is the magic endgame for insurers. Make your product so hard to use that people give up and don't even use insurance.

"What is the cash price?" magically puts you back in the land of Classical Capitalism, where the service provider wants to keep you as a customer and knows their internal costs and you as a consumer of the service can evaluate their reputation for quality and cost vs other providers.

It's adding 3rd parties like "insurance" (which only works as insurance in very limited catastrophic circumstances) and government plans that create the nightmare of the Mystery Price Only Knowable After Service Has Been Rendered.

Are you calling it the magical land because it doesn't exist?

I doubt your doctors office can commit a cash price for the lab they sent you blood too.

And try doing that at a hospital and see where it gets you

The lab does the blood draw. You pick the lab and negotiate with them.

Put yourself in my shoes last year.

You go to your doctor, you have a suspected tick bite with a bullseye pattern around it and a red streak running away. Your doctor is concerned about tick born illnesses and the red streak suspecting the start of sepsis. They need to determine asap if they can treat you with docycline or if you need IV antibiotics. They need to assess your blood for a CBC to determine immediate risk factors like sepsis. They also need to asses for pathogens like Lyme disease, alpha-gal syndrome or that other tick disease I can't remember. This will determine what antibiotics will be effective, and if eating red meat will make you anaphylaxic, and you need to see an allergist if you ever want to eat red meat again

There's a place in town that can do the CBC, the test for alpha-gal is only done by two labs in the country, nearest one is in south Carolina two states away. There's more, but not many more that test for the other two diseases, the closest one is almost the whole country away in salt lake city.

You have to know ASAP to determine your next course of action.

In your proposal, do you call south Carolina and then fly there? Do you do the same to salt lake city? You've still got to find and negotiate with someone local for a CBC. Salt lake city doesn't have the same balance billing law your home state does, you could pay more than your cash price there if they involve another provider.

What do you do? Gotta act fast, or you could wind up with life long neurologically symptoms or even die.

I had a tick bite that was irritated (but not a bullseye rash that I could see) - phoned GP practise, doctor phoned me back a couple of hours later and discussed the situation, ruled out blood tests because they said they were inconclusive at best and arranged for a 3 week course of antibiotics. My wife picked them sup from a pharmacy later that afternoon as she was in town anyway. No direct costs, no mention of money, insurance or anything at the doctors or the pharmacy...

You are getting snagged on the surface level discussion about tick bites, rather than the real discussion about the complexity of medicine.

Note the last sentence of what I said.

Edit: Discussions of US healthcare all seem insanely complex to me - but it all seems to be about insurance and money - which are the last things I want to think about if I am ill or injured.

> And try doing that at a hospital and see where it gets you

I do believe it gets you gigabytes of text, copy protected PDFs, unsearchable PDFs, and other horseshit due to https://www.cms.gov/priorities/key-initiatives/hospital-pric...

> I doubt your doctors office can commit a cash price for the lab they sent you blood too.

Why the hell not?

This is not a difficult problem to solve under the "Classical Capitalism" model.

Because they don’t own the lab? It’s an entirely separate business?

Why wouldn't the lab have a price list for their services?

I'm not sure how much I want healthcare accessibility determined by "Classical Capitalism". The vast majority of things I buy are fundamentally optional, so the supply/demand can be negotiated. Some reasonable part of healthcare is largely non-optional.

I suppose you could make an argument that my sky-high demand should encourage new market entrants thereby balancing the supply to the market demands. However, in many healthcare cases, there are too many impediments for that to be realistic (patent exclusivity, manufacturing complexity, etc.).

not magic words. sometimes cash price is non-insurance price and is 3x the insurance price. since insurance and providers have a negotiated rates. so paying cash means paying 3-5x

>Here are the magic words in US Health Care: "What is the cash price?"

I'm not so sure about that. Especially in a hospital setting.

Many years ago, I was admitted to the hospital for several days as it was suspected (wrongly, but that's another issue with the perverse incentives in US "healthcare") that I had MRSA and the doctor wanted me on IV antibiotics while testing proceeded.

I spent three days in the hospital, getting discharged when the tests came back negative for MRSA.

Shortly thereafter, I received a detailed "explanation of benefits" (EOB) from my insurer, which put the cost of my hospital stay at ~USD$12,000 which included stays in two hospital rooms simultaneously as well as a pap smear (despite the fact that I do not have a cervix). When I complained about this, the insurer tried to make it seem unimportant, but I pressed the issue as both the hospital and the insurer seemed to be involved in some sort of fraud WRT billing.

I was told I shouldn't care because I wasn't actually paying, but I persisted as I was concerned that there was something hinky going on. That culminated in a conference call with my insurance company, the hospital's accounts receivable group and me.

The two other parties talked in insurance billing jargon for a while, but when pressed, they stated that the charges on the "explanation of benefits" was a fiction and that the insurance company and hospital group's contract set a USD$1,500/day flat rate for patients admitted to the hospital's facilities -- roughly 1/3 of the "costs" cited in the EOB.

The made up stuff (which they didn't even try to hide that it was made up) was there as "protection" for the hospital group as the "cash price" of such services, even though I couldn't have received such services (two rooms at the same time? A pap smear[0] despite the fact that I don't have a female reproductive system, nor do/did I present as anything other than a cis male?).

I imagine that there may be some cases where a "cash price" actually does reflect costs and might even be less than insurance costs (although that seems unlikely given my experience), but insurers and healthcare providers do and have for decades gamed the "cash price" to justify the insane overcharging of healthcare services. YMMV.

[0] https://www.mayoclinic.org/tests-procedures/pap-smear/about/...

Right, that's the part that most consumers don't understand about inpatient bills and insurance claims. They hear stories about a "$100 Tylenol" or whatever but those line items often don't actually impact the amount charged to the patient's health plan. Many of the numbers are completely artificial and essentially only serve as placeholders for the accounting and ERP systems. I'm not trying to defend that system but for complex path dependency reasons it's difficult for anyone to reform.

Good luck a) actually getting a price named and b) having that price be honored.

Outside of certain procedures which are used to cash payers (dentists, lasik, plastic surgeons, imaging) this is nearly impossible in my experience.

…. So you pay many thousands a year for insurance, but it’s easier not to use it?

Ummm

It is cheaper not to use it.

Yep. It’s a very lovely system.

This is absolutely unacceptable when per employee healthcare employer costs are basically now something like, I don't know, 20,000-25,000 USD?

I’m not precisely sure but I think my health coverage paid by my employer is like 15-20% of my salary

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