I know this post is like a decade late and very boring, but I gotta post it anyway
Basically, with employer-sponsored health insurance the employer pays half and the employee (you) pays half. The cost of your insurance goes way down if you have a high deductible, and a deductible is basically what you’d have to pay before the insurance actually pays anything. So ‘high-deductible’ means you have to pay a lot before insurance pays anything, and it’s a lot cheaper to buy that insurance cause the insurers often just don’t pay anything ever. If it’s $5,000 before insurance pays a dime, often times you have to just pay as though you had no insurance. This is obviously bad, but it’s also cheap so like maybe you just luck out an never get sick or injured, right…?
Anyway, HSAs. Yeah, it’s called “Health Savings Account”. It’s marketed as a tax-advantaged, investor-y, bougie-“we’re comfortable” lifestyle way to really feel like a keen insider. Picture this: what if health insurance was individualized in the same way 401k and retirement stuff was, and you could “call your broker” at your “health savings account” to tell them to invest your tax-free “medical dollars” in the latest gizmo or whatever. Just deeply bad for solidarity and also very weird. And this is how basically everyone thinks about HSAs. A “tax-loophole” for the rich that I can also use because “I’m actually very financially savvy, just like the rich, who got where they are because of a weird hyper-individualized investment thing rather than any underlying systemic basis of societal organization”.
And you’re probably thinking: “But I already hate the suburban petite-bourgeois and their annoying mannerisms for reasons that are way less boring and meaningless.” Well you’re right, but also: high deductible plans are a requirement of HSAs so the employer’s half decreases significantly. Your employer doesn’t contribute to the HSA (they technically could, but if you’re reading this post they don’t [incredibly silly losing battle available there for libs]), so hopefully you do at least up to your deductible, but it’s pretty likely that’s not possible even if you had the money (no one does) because you literally aren’t allowed to due to contribution limits. (if people did have the money it would probably be better to get different / better / additional health insurance anyway.) But importantly and I guess obviously: nobody contributes to their HSA. It’s basically the chance for each person to individually manage an insurance fund for only themselves, which is almost exactly the same as paying out of pocket, the main difference being the additional bank account and a make-work program for MBAs. I’ve talked to almost a dozen office workers about this and they mostly have no idea what I am saying at all or say “yeah, I added money in onboarding, but I canceled it once I realized it came out of my pay.”
There’s no non-scam option btw if that wasn’t clear. And, yeah, obviously all health insurance is a scam, but this is a different scam run by a slightly different set of people (there’s def overlap though don’t get me wrong). The office job benefits world is basically a choice between varying levels of high-deductible plans + HSA (ie. $1.5k, $3k, $5k…) with maybe one ridiculously expensive low-deductible plan.
Anyway, thoughts? I needed to get this rant out, I guess. Maybe I just missed the discourse on this because I was a child at the time lol.
The HSA rhetoric was annoying because it was only useful to people who didn’t really need financial help, and even then the benefit was something like a tiny tax credit. I was offered one of these at an old job. I don’t remember if it was risk-free or not. I didn’t bother with it, one of my coworkers said you lose anything you don’t spend at the end of the year. No idea if that’s true.
FSAs are where you lose it all.
had one of those for 2 years. end of the year was like a spending spree on medical supplies to the point where i have a fully stocked store-like shelf in a closet like a prepper
of course they find ways for payments to not go through, etc so i always lost hundreds
HSA gets tossed into the stock market at the end of the year
HSAs are just tax breaks for wealthy people who are already paying cash for medical treatment
This tax break is too small potatoes for the wealthy to even bother with.
It’s the private HSA provider financial services companies that benefit.
Healthcare costs are significant and for the wealthy, paying for something with pre-tax money is like 40% savings. That’s significant to anyone, especially given the cost of receiving the benefit (next to nothing).
No one could explain was a deductible was to me until my late 20s. Probably because it makes no sense. I ALREADY paid you mfs, youre saying I still have to pay??
I guess a deductible is incentive to stop you from walking into the surgery place and saying:
It’s absolute nonsense. I recently just figured out what the difference between a deductible, out of pocket maximum, and coinsurance was. This shit is so horribly complicated for no fucking reason. Hells, even after learning all of that, I still have no idea if my insurance is good or not.
This shit is so horribly complicated for no fucking reason. Hells, even after learning all of that, I still have no idea if my insurance is good or not.
No for no reason. They have to get as much money from you as possible while trying to limit how much you’re willing to use it because its impossible to know what you are going to be charged. And doctors and dentists will tell you that insurance covers things and then a month later send you bills.
And doctors and dentists will tell you that insurance covers things and then a month later send you bills.
I went to the doctors and my insurance paid for the visit. Cool. Expected since it was in network. Then a month later I get a letter saying I owe the clinic like $100 + $30 late fees because ooh sorry silly me I should’ve expected this random ass bill despite DESPITE signing a “no surprise billing” contract and no one and no app or receptionist explained I was going to pay again??
???
Turns out that in addition to the clinic visit, I also have to pay the specific doctor for his service??? Like a fucking tip??
Fucking annoying
You will like this video https://m.youtube.com/watch?v=-wpHszfnJns
I found a YouTube link in your comment. Here are links to the same video on alternative frontends that protect your privacy:
Relatedly: Matt Bruenig: The Welfare System Stole $2k From Me
This is a long rant about Flexible Savings Accounts, which are these ridiculous schemes that allow you redirect some of your untaxed paycheck into accounts that can only be spent on certain health care or child care items. To use them, you have to guess how much you are going to spend on those items during the year, and if you wind up wrong, you the money you put into the account is forfeited to your employer. Nearly half the people who use the accounts forfeit money to their employer ever year!
I found a YouTube link in your comment. Here are links to the same video on alternative frontends that protect your privacy:
I am disabled so I think about it like a 15% deduction on the bajillion dollars a year I have to pay out of pocket. But it gives me the perverse thought that when I can get a coupon or discount on something, it makes me feel like I am “wasting” the money I put into the FSA.
But also I just spent two months rent to start laser hair removal and I might be able to reimburse some or all of that out of FSA funds.
Horrible horrible horrible fucking system.
ya i, cleverly or so i thought, squirrelled away enough money this year at the new job to cover me for a years of worth of (weekly? semi-weekly? i probably split the difference) psychotherapy appointments, which it appeared, despite what i think is pretty good health insurance, to require a non-deminimis copayment per appointment. free money, fuck the tax man, fund the the fsa. but, as it turns out, any telehealth behavioral apppointments are actually free on my plan, and i see my therapist by telehealth, so it’s all actually free, and so now ive earmarked thousands of dollars for the fsa which i now i have no plan for and only a small fraction will rollover at the end of the year.
so! will i get in a terrible car accident or be diagnosed with a terrible disease and be able to put that money to good use? or will i just buy the most expensive pair of oliver peoples glasses at the end of year, or buy a room full of diapers in a desperate attempt to prove to my ex i’m now reliable and responsible and good at money and planning (this being an unfortunate exception). time will tell!
HSAs + HDHPs can make sense in some circumstances, especially if your employer contributes to it and you are a high earner.
So in all health insurance plans, you’re working with pre-tax money. In all cases, your monthly premium is paid for in pre-tax money. With HSAs, additionally, any contributions you make are also pre-tax, and can be invested.
Whenever you’re dealing with pre-tax money, the more money you make, the more of an advantage this is. If you make very little money, you generally pay very little tax on it, so the discount from using pre-tax money is small. The reverse is true if you earn a lot of money.
The advantage of using the HSA is that you own the money and can keep it forever. You can always use it to pay for medical expenses without incurring taxes, and you can also start to draw from it after 65 as though it were a regular retirement account and pay the income taxes then. Because they roll over forever, you can amortize medical costs over a longer period of time. And because the money is invested, in theory it can increase without you doing anything.
The disadvantage of using an HSA is that it is invested. It’s entirely possible that the value of what you buy with your HSA money goes down, and then you have less money for medical expenses. Or if the arcane math of medical costs work out so that you’d have ended up paying less with a lower-deductible PPO or HMO.
tl;dr: If you make a lot of money, your company contributes to it, and you don’t get sick, an HSA is basically a free extra retirement account that can both always be used to purchase medical services and can lower your current year tax burden.
I’ll note that I’m super risk averse and so I have a traditional PPO, but one of my friends is a big money guy and he does an HSA (despite having lots of medical bills, he still swears by it).
