Health care/Medicare

[Conundrum]

On the HSA question, what happens if you have an HSA with a strong balance and you switch plans/employer etc?

Looking at very high out of pocket costs coming up and thinking of pouring pretty much everything through year end into an HSA but not sure if overshooting would be a problem or not. Thanks for the discussion!

The HSA funds are alway there for future medical expenses regardless of the insurance plan you buy down the road. If you get another QHDHP (HSA compatible plan), you can continue to contribute to your HSA tax-free. If you get a incompatible plan, no more contributions and you can spend down your HSA. You can also remove the funds for non-medical purposes and pay taxes and a 20% fee prior to the age of 65.

Health Savings Accounts go with you.

Think of it as a 401k for health care expenses.

More of a traditional IRA. You'll pay normal taxes at 65 to remove the funds for retirement. Or see below...

I believe any money not used prior to going on medicare can still be used for medical expenses not covered by medicare like part D fees.

It can. And it can also pay your Medicare premiums tax free.

If you don't have any medical conditions, buy a QHDHP and put money in an HSA if you can. A few of years of max-contributions and no claims, you will be paying lower premium and have a high majority of any potential medical costs paid. I realize not everyone is in a position financially or medically to do it, but it's like retirement or anything else for your future. If you are depending on the government to take care of you, you might not be planning very well or are willing to downgrade your quality of life.

As for the problems with financing healthcare in America, the list is long and not too distinguished.

[GeezerSteve]

I think it would be really interesting if all employers stopped providing HC and instead gave the money to their employees.

But that would certainly result in many of them pocketing the money, going uninsured, ending up in ERs with acute problems that could have been snipped in the bud via preventative care and the rest of us paying higher premiums for the increased ER visits.

[Conundrum]

I think it would be really interesting if all employers stopped providing HC and instead gave the money to their employees. Those people would then have to buy insurance -- I think the mere act of having to write a monthly check would cause the paradigm to shift rapidly.

Why do you think the writers of ACA continued to give tax benefits to group plans and govern employer plans the way they did by requiring an offering? And why do you think participation requirements in employer medical plans are the way they are? If the government wrote into the law that employer insurance carrier had to accept lower participation requirements, we would start to see exactly what you're talking about. But they didn't.

Employers get a "good deal" on offering insurance through business expense write-offs, FICA tax reductions, work comp premium reductions (based on payroll, insurance premiums doesn't count as reported payroll), the insurance plans have looser regulations, can still be underwritten, etc.

The government doesn't want the population seeing the cost and won't let them. They'll keep all the incentives for an employer a normal individual doesn't see when buying a private plan and there's a pretty good reason-insurance companies are not hemoraghing on employer plans and lobby, employers like them for more perceived value for their compensation dollars, and private citizens don't have a lobby group representing their best interests.

[Tippster]

Oh I understand it would never happen (unless wee switch to single-payer or Medicare for all) but still think it would be interesting if all of a sudden everyone had to use "their money" to buy insurance.

[54-46]

...If you are depending on the government to take care of you, you might not be planning very well or are willing to downgrade your quality of life....

That's what smacked me between the eyes WRT health care. Been very healthy all these years and looked up and saw retirement looming...

[GeezerSteve]

Oh I understand it would never happen (unless wee switch to single-payer or Medicare for all) but still think it would be interesting if all of a sudden everyone had to use "their money" to buy insurance.

My guess is that you hang mostly with W-2 folk. I know lots of self-employed people who can well afford HC insurance but go uninsured.

[Conundrum]

Oh I understand it would never happen (unless wee switch to single-payer or Medicare for all) but still think it would be interesting if all of a sudden everyone had to use "their money" to buy insurance.

I thought you probably knew it. Merely pointing out some of the layers of the employer side for those who don't know that side of it. I've been on an employer HSA plan for about 10 years-my monthly share of the premium is very low and I've managed to fill up the HSA every year. Paying for healthcare is not on my list of things to worry about. But I'm not writing checks for $20k a year to insure my family before I ever even have a claim. I'm lucky in that regard but also have a boss so it comes back to looking at trade-offs. I could probably make more working for myself doing what I do but all of the hassles of self-employment and the hours and costs of dealing with the bullshit don't weigh out for the higher earnings for me. Yep, just your run of the mill bootlicker here...they got me.

[Tippster]

My guess is that you hang mostly with W-2 folk. I know lots of self-employed people who can well afford HC insurance but go uninsured.

I think you're missing my point, but I probably made it poorly.

FTR: My wife and I are (currently) self-employed. I used to get HC through an employer, then lost it when I was laid off. It was eye-opening to be offered continued coverage under COBRA at the rate my employer "paid" - which is really just what my salary was reduced vs. had I been covered in another way, say under my wife's insurance. I wouldn't have gotten all $1800/month, but close to 80% of it.

I think the majority of people who choose not to buy insurance, despite being able to, have no dependents.

[GeezerSteve]

Well, now you are introducing the new issue of dependents. We're a couple without children and well aware that we subsidize benefits for families with kids under my wife's ER's group plan. That's okay by me, although I would rather see a single payer system. I also don't mind paying taxes to fund public education for kids I don't have.

I agree that making people more aware of having skin in the game would lessen people going to the doc when they don't need to do so. (I have heard that the move to high deductible/high co-pay plans is starting to have the effect.) But I also think that your solution would result in a significant drop in the number of insured and would thus compound that problem. And that's a big problem.

IMV, all HC premiums paid by ERs should be deemed EE compensation and subject to being taxed as ordinary income.

[RootSkier]

Sounds good to me!

I seriously hope you die in a gutter. slowly.

[fastfred]

My guess is that you hang mostly with W-2 folk. I know lots of self-employed people who can well afford HC insurance but go uninsured.

yup

[fastfred]

I think it would be really interesting if all employers stopped providing HC and instead gave the money to their employees. Those people would then have to buy insurance -- I think the mere act of having to write a monthly check would cause the paradigm to shift rapidly.

that's the issue, when 2/3 of the population has the gov't pay for their insurance or their employer no one see's health insurance as a costly problem

[Tippster]

that's the issue, when 2/3 of the population has the gov't pay for their insurance or their employer no one see's health insurance as a costly problem

That's my point (reverse your order, btw - the majority of Americans are insured through their employer.) If you took the money the employer pays for your health insurance and add it to your check, it's not really a "raise" (unless, like Big Steve's friends you just stay uninsured.) What I think would happen is people would feel the pain a bit more regarding the actual cost of healthcare, despite there not being any $$$difference in the end (in my scenario.) I think in that scenario all of a sudden slightly higher taxes in lieu of not being covered or having to write a fat check every month like I do would look more attractive to many, if not most.

I think most workers forget that "benefits" like HC and vacation are something you have earned, not something your boss gives you out of good will. Employers use benefit packages as a means of luring workers to their company, but they are still considered part of your compensation for working there.

Steve - it wasn't a proposal, it was a mental exercise.

[4matic]

My guess is that you hang mostly with W-2 folk. I know lots of self-employed people who can well afford HC insurance but go uninsured.

Do they have assets to protect?

[GeezerSteve]

Do they have assets to protect?

Some of them do but they nonetheless go bare

[Dantheman]

IMV, all HC premiums paid by ERs should be deemed EE compensation and subject to being taxed as ordinary income.

Agreed. A lot of people would be shocked by how much higher their gross income actually is if their HC premiums showed up on their W2.

[54-46]

Agreed. A lot of people would be shocked by how much higher their gross income actually is if their HC premiums showed up on their W2.

Under that idea you might have to exclude lower income brackets and/or stagger the brackets to avoid taxing lower wage earners a greater % of their total income than higher wage earners. Can probably find a decent middle ground.

Ex:

$20K HC premium + $50K wage = 20/70 subject to additional tax

$20K HC premium + $100K wage = 20/120 subject to additional tax

[GeezerSteve]

Under that idea you might have to exclude lower income brackets and/or stagger the brackets to avoid taxing lower wage earners a greater % of their total income than higher wage earners. Can probably find a decent middle ground.

My view re HC benefits being taxed as ordinary income is part of a larger view that fed income tax marginal rates and deductions should be retooled to become more progressive, a la pre-Reagan.

[54-46]

My view re HC benefits being taxed as ordinary income is part of a larger view that fed income tax marginal rates and deductions should be retooled to become more progressive, a la pre-Reagan.

Yup - thought so. That would be my view, too. So, the higher end marginal rates would be like 38% and above

[Sirshredalot]

Agreed. A lot of people would be shocked by how much higher their gross income actually is if their HC premiums showed up on their W2.

It's actually listed now, both employer and employee portion. If you prepare your own 1040, or at least review the turbotax printout, you'll see it.

[WaistDeepGroomers]

So, new healthcare proposal from the Senate. Since you're still blocked from reading WSJ for free even when you're in Incognito mode, can someone please explain the sober sell for giving the rich tax breaks? No trickle down economics, please...

[Timberridge]

I'll try. People who want to read WSJ for free, also want free health care.

[Cono Este]

Old thread but

All you promoting Medicare Advantage need to understand you giving an insurance company, usually an HMO more control over your decision making than your doctor. As you get older or sick you could potentially spend more And currently MA costs medicare more per yr than people on original medicare.

Those plans also pay agents a lot more money, and now pay lifetime residuals.

I can get someone a supplement for 30 bucks a month when you retire. Don't trust an insurance company if you don't need too.

I never hear any complaints from people on medicare with good supplements. Medicare Advantage, when someone gets sick, they learn the difference.


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[DBdude]

My buds in the HC industry think the answer to soaring HC costs is to move from a fee-for-service model to a wellness model. But that aint gonna happen with the GOP controlling the WH and Congress.

dartmouth hitchcock left the Pioneer Accountable Care Organization that based reimbursements on quality of care because the reimbursements were not enough to cover care provided

if dartmouth hitchcock can't make it work, I wonder how many other orgs can

[DBdude]

So, new healthcare proposal from the Senate. Since you're still blocked from reading WSJ for free even when you're in Incognito mode, can someone please explain the sober sell for giving the rich tax breaks? No trickle down economics, please...

because the rich don't want to pay taxes silly boy