Prognosis not good for HSAs
Health Savings Accounts, or HSAs, have been so successful at reducing the cost of health care, the ObamaCare people are out to get them.
The HSA concept: Rather than buy a health insurance policy that has a low or no deductible, you purchase one that has a high deductible.
Since the insurance company doesn't have to pay anything until you exceed your high deductible, it's happy to give you a much lower premium. You save on the premium -- and by shopping around, since most of your initial health care costs are on your own dime.
Rather than use a name-brand medication, you choose the much cheaper generic. You ask doctors and other providers what particular services and treatments cost.
Of course, they hardly ever know.
When I blew out my Achilles tendon playing racquetball five years ago, I asked the doctor what the surgery to reattach it would cost. I asked the nurse what the crutches she gave me cost. I asked what the MRI to get a good look at my leg cost.
Each person I asked looked puzzled and said the same thing: "I don't know. Nobody ever asked that before."
That, in a nutshell, is what is wrong with our health insurance and health care systems: Consumers are completely divorced from costs. Massive inflation has been the result.
To help put consumers back in control, HSAs became law in 2003. They offer all kinds of flexibility to individuals and families.
Say your employer is paying $10,000 a year for your family's "Cadillac" health insurance that covers almost everything. Well, why not give that $10,000 credit directly to you, so you can buy a policy with a $5,000 deductible that costs, say, $5,000 a year? You take the $5,000 you save on your premium and invest it in an HSA tax-free.
If you have medical needs, you can use your HSA money to pay for them until your deductible is met and your insurer takes over. And by shopping around, you help drive down the cost of health care for everyone.
If you are lucky and stay healthy, you can grow a tidy little HSA nest egg. When you turn 65, you can use that money for anything you want.
But ObamaCare, says Forbes, is going to make HSAs more costly.
This is because HSAs are driven by consumers, whereas ObamaCare is driven by command-and-control bureaucrats.
See, the ObamaCare people have published guidelines that require all health insurance plans to have an actuarial value of 60 percent -- which means at least 60 percent of any care is paid for by the insurer and no more than 40 percent is paid for directly by the insured.
HSAs don't meet the 60-percent threshold.
This is because ObamaCare counts only the $5,000 paid for your family's insurance policy, not the $5,000 your family sinks into its HSA.
Under ObamaCare's confused bureaucratic standards, that means 50 percent of care your family receives is paid for by your insurer, 50 percent by you.
The only way for your HSA to meet the 60-percent threshold, then, is for you to purchase a more expensive policy, significantly limit the amount you put into your HSA or abandon it altogether.
Which is precisely what the ObamaCare folks want.
Your ability to choose goes down, your costs go up -- as happens every time government's powers expand and individual freedoms are taken away.