The HSA Healthcare Blog

If people truly want to know the scoop on health plan proposals made both by Obama and McCain, all they need to do is read “the Journal.”

Once again, the WSJ has nailed it.

This time, the tag line to the story reads (correctly):  Obama supports huge tax subsidies for the wealthy.

What’s funny is, he doesn’t even seem to realize it.

At the core of McCain’s plan is the idea that a 40 year old concept is outdated.  By inticing employers to buy health insurance through the use of tax breaks, the government is providing a huge disincentive — the opposite of responsibility.

It’s the McCain plan, not Obama’s, that actually is progressive.

As the article states:

For reasons of historical accident and lobbying clout, individuals who buy policies get no tax benefits and pay with after-tax dollars. Mr. McCain is proposing to make the tax benefits available to everyone, regardless of how they purchase their insurance.

In contrast, Obama doesn’t want workers to have a choice in their health care.  He claims that McCain’s plan

would amount to “taxing your health-care benefits for the first time in history,” which is a wild distortion. His point seems to be that because companies wouldn’t have to pay for health care, they could raise wages and thus taxes would also increase for workers on those higher incomes. But doesn’t Mr. Obama want higher wages?

Why this discussion is not getting more air underneath its wings is beyond me.  Unfortunately, the candidates are happy to discuss their plans at a highly superficial level, which leaves the rest of us out in the dark.

So do yourself a favor — read the article from the Times and pass it on to others.

Here is the link to the WSJ article.

In their second debate held on Tuesday, Oct. 7, Senators Obama and McCain went back and forth on health care.

When asked how he would characterize health care coverage, McCain responded that it is a responsibility.  In other words, individuals have a responsibility to provide their own health care coverage.

In contrast, Obama chose to characterize health care as a right.

In isolation, that assertion is not so remarkable.  Many people characterize access to health care as a right, sometimes in line with an inalienable right. Others characterize it as an entitlement, such as with Medicare or Medicaid.

Regardless of whether one agrees with Obama’s characterization of health care as a right, surely all reasonable minded people can understand that he flatly contradicted himself by admitting that he wants to fine people who do not obtain health care coverage, especially for children (although he never specified the amount of the fine).

Obama’s system is basically a pay or pay option.  Pay the health plan or pay the government.  And given that choice, their theory is that most people will go ahead and pay for coverage under a health plan.

But what many people are missing is that Obama is effectively supporting a plan that will penalize people, by fining them, for opting not to exercise their “right” — using the term he chose to use to characterize health care.

Let’s look at some other traditional rights.  Saluting the flag, for example — that’s something we all have the right to do — or not do.  But what if the government were to fine people for choosing not to salute the flag?

What about the right to practice one’s religion?  What if the government were to impose fines against people who opted not to exercise that right?

Hopefully you can see where I am going with this.  Health care is not a right.  Perhaps it should be, but it isn’t.

McCain is the more correct of the two — health care is a responsibility.  People have a responsibility to provide for their own health care, but should they choose not to do so, they should not be fined by the government.

THAT is their right — the right to choose not to provide their own health care.

Which leads us full circle to the bigger question — should health care become a right?  Because if it truly is a right, then no one would have the option to opt out.  It would be provided to all, paid for by the populace.

C. Dean Richard, JD, MSBA
“the HSA king”
Health savings account info and HSA insurance plan quotes
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As a member of the baby boom generation, I was particuarly intrigued by this article from the Philly Daily News discussing the ever-changing eating habits of fellow boomers.

Mickey D’s?  We still eat there, but we’ll have the yogurt and salad with low-fat dressing, thanks.

We’re not searching for the fountain of youth — we’re searching for the fountain of vitality.

A major champion of this movement is Dr. Michael Roizen, creator of the RealAge program and co-author of a new book, “You Staying Young: The Owner’s Manual for Extending Your Warranty.” (Free Press, $26).

His approach is based on research suggesting that your food and lifestyle choices can add years to your life. For instance, one recent study found that people who eat five servings of fruits and vegetables a day, drink moderately, exercise and quit smoking live on average 14 years longer than people who adopt none of these behaviors.

Link: Boomers taking charge of their eating habits

COMMENT:
Unfortunately, IRS regs do not allow tax-free withdrawals from health savings accounts for healthy food - at least, not yet.

Perhaps they should?

At the very least, the healthier you are, the lower your health insurance premiums should be. Several leading insurers offer “good health” discounts for qualifying applicants. Ask us for details!

Surprise!

A new survey has shown that American workers can expect to see a rise in their health care costs in the year 2009, as premiums are expected to go up.

The new survey was conducted by the non-partisan Kaiser Family Foundation, which focuses on studying health policy.

They carried out the survey by talking with a total of 1,927 employees in the U.S.

The overall rise this year was to $12,680 for families, and $4,704 for individuals.

This year, they predict that the overall cost of health insurance premiums will rise by 5%.

The average for a workers across the U.S. is to spend $3,354 this year for family premiums, up 2.2%.

On top of that, deductibles jumped by 29% on average, all the way up to $1,334 according to the survey.

This will be the smallest increase since 1999, but it is still an increase that willl have to be dealt with.

Read article from Springfield (MO) Business Journal

The numbers keep growing.  Over 7 million people now covered under HSA plans, either individually or through work.

Our independent insurance agency can help you establish your own health savings account plan. It is a 2-step process:
1. Purchase a qualifying high deductible health plan (our agency represents numerous top-rated insurers offering these plans in about 30 states).
2. Once you are insured with a qualifying high deductible health plan, open and start funding your actual health savings account at any financial institution offering account administration services.

You can click here to get quotes for high deductible health plans.

Nobody wants to be a Doc anymore.

More specifically, med students have low ambitions of becoming general practitioners.

In this report filed by Reuters, only TWO PERCENT of med students said they hoped to become GP’s.  That indeed could precipitate a crisis in healthcare that would drive up the cost of going to the Doc beyond limits for most ordinary folks.

COMMENTS:
You think your $40 co-pay is high now?  Wait ’til it reaches $400.

Surely, Hillary is secretly working on a solution to this frothing problem.

More and more Americans are opting for “bare bones” coverage to insure their health.  Sometimes they know what they’re buying, but often times they don’t.

In an article published by the Wall Street Journal, the paper makes the case that many consumers buying low end coverage are duped into buying those limited benefit plans by salespeople whose smooth talking goes a long way to convincing people to do something that is not in their best interest.  The article focuses specifically on sales tactics from MEGA Life and NASE (national association for the self employed), two companies marketing health plans under the umbrella of “HealthMarkets” based out of Oklahoma City.

According to the article, consumers “thought they were buying full insurance for their families but in reality they were buying far from that.” Indeed, in some instances, hospital benefits were limited to $300 a day.

Click here for a link to the story from the WSJ

COMMENTS:
Nothing new here folks–same old warnings that professional insurance brokers (such as myself) have been giving to people for years. In fact, the article’s author (a journalist) actually states the correct solution to the problem of high premiums:

Rather than opting for a limited-benefit plan, some families should consider a comprehensive plan with a high deductible, which may not be much more expensive, or a “catastrophic” medical plan.

Bingo!!

There ya go folks. If you’re not inclined to believe someone such as myself (with almost 30 years experience brokering health plans to small business owners and individuals) perhaps you’ll believe a journalist. (dripping sarcasm here, of course)

Ahhh, you knew it would come sooner or later. Reality. It’s setting in on the much maligned Commonwealth health care plan, enacted during Mitt Romney’s tenure.

This opinion piece from the Wall Street Journal hits on just a few points and counterpoints as it points out the irony–and inherent untruthfulness–of the plan’s mantra: If everyone is covered, everyone’s cost will be lower.

Costs are soaring in Mass. Almost $1billion a year is now needed to fund the program, which STILL falls short of covering everyone.

Not surprisingly, the vast majority of new enrolees are in the state-subsidized plan–which in turns causes a larger burden on taxpayers.

Lawmakers in Mass. are “shocked” that so many people have opted for the the subsidized option. One word: idiots. Perhaps a more politically correct term: Unenlighted. Mandated benefits continue to tax the system.

Here’s my favorite paragraph from the article:

The Bay State has long served up coverage-specific insurance mandates, such as for fertility treatments, which raise costs. Yet in a just-deserts twist, Massachusetts health planners are now reviewing ways to trim mandates because the state is footing more of the bill, even if they didn’t care when imposing them on individuals and small business. A state-sponsored study shows that total spending on mandates was $1.32 billion in 2005, or 12% of premiums. The study is devastating despite its pro-mandate slant.

Just when politicians will finally figure out that MANDATES RAISE PREMIUMS, which in turn lowers participation, is anyone’s guess.

Never?

Now there’s a dose of reality.

Short answer: A lot.

Benefitsblog links to a survey from the Center for Retirement Research indicating that 47% of those surveyed would not be willing to forego their health insurance benefits, even in lieu of a 30% raise.

Click here for the story line from Benefitsblog

COMMENT:

Some of these folks aren’t doing the math! In fact, I’d be willing to wager most of them aren’t.

Example: $100,000 income with a health plan included. Offered 30% raise. That’s $30,000, making gross income $130,000. Then go out and buy your own individual health plan. For illustration purposes, assume a family of 2 adults both age 45 with 2 children. In greater metropolitan Cincinnati, we can get this family insured with a $10,000 family deductible that is qualified for a health savings account plan for a premium of approximately $360/month (or 4,320 a year in premiums paid). They can fully fund an HSA account with $5,800 taken solely from the increase in pay. At this point, the family is $20,000 AHEAD in the current year, assuming no claims. But what people just seem to keep glossing over is the fact that they have pre-funded the first $5,800 in medical expenses for the year. In other words, they have a plan that pays 100% of the first $5,800 with no deductible. And if they take an add-on that reduces the deductible down to $100 for accidents, it’s even better (additional cost is approximately $50/month or $600 year).

But–here’s where most people miss the ball entirely. The analysis above assumes just ONE year. With an HSA plan, you keep funding the account EVERY year. In 10 years, you’ve contributed $58,000 to your OWN account! Plus, that money is growing tax-deferred for the future (it basically converts into an IRA at age 65).

Assuming in this example that the value of the HSA account grows to $218,000 by age 65, this employee has made a mistake with a minimum price tag of $218,000, which does not include the additional $20,000 a year in income he has foregone for 20 or so years.

Moral of the story:
If you’re complacent (with the traditional employer-sponsored system), it can cost you out the wazoo. You’ve got to THINK for yourselves, folks!

And if you need some help working the numbers, CALL OUR OFFICES!

Finally — an explanation of Obama’s “promise” to “save” each American family $2,500 a year in health insurance premiums.

No, I am not kidding–that is precisely what he is promising. Of course, when a politician makes a “promise,” it should be taken with a healthy dose of sea salt.

In his case, Obama is pushing the envelope of believability beyond its boundaries.

In this article, the New York Times examines Obama’s fuzzy math.

Obama’s pledge to cut health care costs by $2,500 per family is nothing but stereotypical politician double-speak. For a guy who claims “change” as his mantra, Obama is as old-fashioned as they come in the political world.

There is absolutely NOTHING NEW in his proposal. If there really is $77 billion a year in waste in the health care field, do you really think WASHINGTON can cut that waste?

In part, Obama suggests that mandating insurance companies to accept all applicants regardless of health conditions will actually cut costs overall. How in the world he reaches that conclusion is beyond reason. His premise supposes that virtually NONE of those individuals will have claims–apparently. In reality, however, claims will rise exponentially when a disproportionate share of new enrollees have serious pre-existing health conditions, which cause premiums to RISE, not fall. And who is going to pay the actual premium for the 80% or so of the uninsured who CANNOT AFFORD the premiums? Huh?

Health care is a huge mess, rivaled only by the mess we’ve created for ourselves in the energy crisis.

There is no way Washington can fix it with the magic wand approach touted by the most liberal Senator in the Senate.