Mad about HSAs
Posted on April 5th, 2008 – 7:39 PMBy Josephine Marcotty
Chen May Yee, who writes about health insurance and the business of health care for the Star Tribune, knows all about the ins and outs of Health Savings Accounts. In a story posted today on Startribune.com she explains why calling them “savings accounts” may be a misnomer. Here is her post:
A few weeks ago, I got a voice mail from someone named Josh Gruber. It was about health savings accounts and how they’re working out. Or not working out, at least for him.
Now we get a fair number of calls from people about their health situation. They’re often very interesting (okay, sometimes not) but they’re usually not really applicable to anyone else. Or the story changes during the telling. Or something.
Gruber was different. Sixty three and semi-retired, he was clear, concise and knew the value of his own story. In 2004, he said, he signed up for a low premium, high-deductible plan from Blue Cross with a health savings account. For three of the four years since, he said, premiums were up in the doubled-digits.
My ears perked up.
Now if you haven’t heard of these new-fangled plans, you must have been living in a cave.
They’re based on a fascinating concept: In exchange for a lower premium (and who doesn’t want that?), you get a higher deductible and pay for medical expenses with pre-tax dollars from a health savings account. The onus is on you, the consumer, to keep spending down.
They’ve been sold as the best new idea in American health care since, well, managed care. And if your employer hasn’t already offered you the option, they probably will within the next three years.
At the paper, we’ve been documenting the expansion of these plans with interest. But because they’re so new, we haven’t really got a sense of how well they’ve worked for people.
Gruber had a four-year experience with his plan and several complaints. In essence, he was mad because he was paying more out-of-pocket and not getting protection from premium increases.
The story - along with responses from Minnesota’s health plans - is in today’s paper.
Do you have a high-deductible plan with an HSA? How well is it working for you?
2 Responses to "Mad about HSAs"
Hi Josephine,
The company I work for switched from a traditional plan to a high deductible HSA (both with Medica) in February of this year. One of the first things I did when I found out we were switching was to perform a better evaluation of my wife’s employers health care benefits . She works for our local school district but in the past was typically covered under my health care plan, along with our son who’s a freshman in college. After evaluating all of our options, my wife and I decided that the best strategy would be to have her enroll in her employers health care plan (Health Partners traditional plan) and our son would remain with me on my employers new HSA plan. This made the most sense after reviewing our past expenses and determining that most of them were related to my wife’s healthcare (nothing major since we’re all in good health) and it would cost us less if she joined her employers plan as an individual. At this point my son and I have had no major health issues and my HSA is building nicely. I’ve used a small amount of the money for prescription copays but otherwise my plan is to let it continue to build so that hopefully when I need it, there will be little, if any, out of pocket expense to me. After having some time to reflect on the switch, I guess whether or not an HSA will be a benefit to someone, will depend on things like your personal health, the size of your family, etc. It seems like those that use it more will pay more and those that use it less will pay less. Not the best situation for a family just starting out but pretty good if your an empty nester…smile! One more thought that came to mind. I read the article in the paper this morning concerning Josh Gruber and everything he said made sense except I couldn’t help thinking, did he really believe that his personal premiums wouldn’t increase because he used less. To me that’s like thinking that the cost of a gallon of gas won’t increase if I use less. Ultimately, we ALL have to use less if we want costs to stabilize. Maybe that’s the point of HSA’s?
Fyi, there’s another collection of comments on this story at
http://ww2.startribune.com/user_comments/comments.php?d=asset_comments&asset_id=17324849
