WSJ OP-ED HSA rant

The End of HSAs(WSJ - May require subscription)

Short Excerpt:
The Reid bill also assaults health savings accounts, or HSAs, which allow individuals to accumulate tax-free funds for future medical expenses when coupled with low-premium, high-deductible insurance. The Reid bill changes tax provisions to make HSAs less attractive, but the real threat comes via increased regulation.

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I knew this was coming. I just didn't know it would be as hideous.

greling said: I knew this was coming. I just didn't know it would be as hideous.Of course it is hideous, if you believe a F*ing opinion piece.

We need an Opinion Journal sub forum, right next to the tripleB sub forum.

Is there some inaccurate information in the WSJ piece, NYCLL? If so, what is it?

tripleB said: nycll said: greling said: I knew this was coming. I just didn't know it would be as hideous.Of course it is hideous, if you believe a F*ing opinion piece.


Nycll: People who save money in their HSAs for medical expenses are just freeloading by not paying their fair share of taxes.

I love to be called a freeloader. Especiall from the king of "fun and profit".

Hey Brian-Cube. If you figure out how I can freeload completely, i.e., (1) not work, (2) get paid more than I do now, and (3) not pay taxes, please pot a "f&p" OpEd so we can read.

Heres a more nycll trustworthy source (since its cnn)

5 freedoms you'd lose in health care reform

yes it was written in July, but from reading most of the old house bill, and the 'new' house bill little has changed. never mind that I've been saying this would happen for a while

The reason behind is simple, goverment will require health insurance to meet 'qualified' levels. The levels are to be defined later (because 2000 pages isnt enough), but there are some guidelines, free preventive care (both free dr vists & meds), insurance to cover 70%+ of costs, low deductiables.

So by defualt HSA plans will be eliminated because they wont qualify

nycll said: bighitter, perhaps you should ask why this piece is printed on the opinion section, not the news section.

Your post attempts to discredit the information presented in the WSJ column based upon the fact that it appeared on the editorial page. Provided the information presented is accurate -- and I'm assuming that you are not disputing the accuracy since you haven't mentioned any inaccuracies -- what difference does it make whether it is on the editorial page. One could reasonable argue that the editorial page begins on the front page of some major newspapers. To the WSJ's credit, if they offer an opinion on an issue, they confine their commentary to the editorial page.

bighitter said: nycll said: bighitter, perhaps you should ask why this piece is printed on the opinion section, not the news section.


Your post attempts to discredit the information presented in the WSJ column based upon the fact that it appeared on the editorial page. Provided the information presented is accurate -- and I'm assuming that you are not disputing the accuracy since you haven't mentioned any inaccuracies -- what difference does it make whether it is on the editorial page. One could reasonable argue that the editorial page begins on the front page of some major newspapers. To the WSJ's credit, if they offer an opinion on an issue, they confine their commentary to the editorial page.The way it is written makes it very clear that it is more of a presentation of opinion then fact.

Don't get me wrong. I think that the new new health care laws they are trying to pass are screwed up. But it is hard to start a good discussion from such a one-sided article.

nycll said: Anyways, it all boils down to what the path of the least resistance at the current time is. To me, that means leaving the HSA/HDHP features largely unchanged, maybe with some new restrictions on OTC expenses and such.Yeah, why would Congress want to encourage people to use OTC treatments when they could buy more expensive ones which are covered by their insurance, even when the OTC treatment may be the best approach.

Allowing OTC products to be paid for by HSA's is a good idea for many reasons, including preventative care.

Consider Prilosec OTC which is sold over the counter versus Prevacid. Prilosec may be just fine, but if a person can't buy it using his FSA or HSA, then that person is thus encouraged to use the more expensive Prilosec.

Associated PressWASHINGTON: The government paid more than $47 billion in questionable Medicare claims including medical treatment showing little relation to a patient's condition, wasting taxpayer dollars at a rate nearly three times the previous year…

_In the Medicaid program for the poor, roughly $18.1 billion, or 9.6 percent of claims, are believed to be improper payments.

_Using a baseline of 12.4 percent in improper payments in the Medicare fee for service program, HHS is setting targets of reducing fraud and waste to 9.5 percent, 8.5 percent, and 8.0 percent, respectively, for fiscal years 2010 through 2012.

_Records released in the past week showed that CMS for three years ignored internal watchdog warnings about swindlers stealing millions of dollars by scamming several Medicare programs. The agency received roughly 30 warnings from inspectors but didn't respond to half of them, even after repeated letters"

If the government would begin fixing existing fraud, perhaps they wouldn't need to make changes to HSAs to finance their healthcare "reform".

Oh crud. So they do eliminate HSA, what will happen to existing funds that are in HSA accounts now? Will they tax the amounts then? Should one withdraw all the money now? Pardon my ignorance, but I'm not knowledgable in HSAs.

delete

bighitter said: Thanks for posting the link to the WSJ Healthcare Overhaul Proposals. You are welcome! That's actually my main point: your time is much better spent reading the real information than the partial truth with a lot of spin.

bravebiffy said: Oh crud. So they do eliminate HSA, what will happen to existing funds that are in HSA accounts now? Will they tax the amounts then? Should one withdraw all the money now? Pardon my ignorance, but I'm not knowledgable in HSAs.Since the bills are being forced through with very little time for scrutiny and they're worded quite obliquely, I doubt anyone knows what will happen with HSAs.

Xnarg said: jaimelobo said: ...An FSA is company funded, that's why you lose it at the end of the year. Huh? I've never had an employer fund my FSA. I've always funded them myself.It's funded with your salary, but it has to come in the form of payroll deduction. And the amount doesn't show on your W-2 wages box.

I dont want to crash your party, bu the fact is that the vast majority of Americans dont use HSA's. Most people dont have the extra income to save for these type of expenses. Unless of course everyone on FW makes over $100k a year, I would guess that even people on this forum are not affected either.

tribalsavage said: I dont want to crash your party, bu the fact is that the vast majority of Americans dont use HSA's. Most people dont have the extra income to save for these type of expenses. Unless of course everyone on FW makes over $100k a year, I would guess that even people on this forum are not affected either.Most people don't have HSAs because most people don't pay federal income tax.

Why would they care that those of us who do pay taxes get a break for taking care of our own health care needs?nycll said: Xnarg said: bravebiffy said: Oh crud. So they do eliminate HSA, what will happen to existing funds that are in HSA accounts now? Will they tax the amounts then? Should one withdraw all the money now? Pardon my ignorance, but I'm not knowledgable in HSAs.Since the bills are being forced through with very little time for scrutiny and they're worded quite obliquely, I doubt anyone knows what will happen with HSAs.So, the bill may NOT bring an end to HSAs? Given the previously expressed attitude of the bill's authors towards those of us who do pay taxes, we can assume that HSAs will be cut back in some manner.

jaimelobo said: I do not feel like subscibing, just to read this article, ...Thanks for the clarification. But you didn't miss anything from the article since it didn't dwell on any of the details.

Mostly I am just letting you know that viewing that article does not need subscription. Most of WSJ's Op-Eds don't require subscription. I subscribed its online version for many years until recently I canceled. But I am pleased to tell you WSJ's real news coverage is still top notch.

nycll said:
Numerous people (myself included) have compared costs of HDHP vs traditional PPO plans in a spreadsheet. The result is HDHP typically outperforms the traditional plan in all areas.

HSA + HDHP only outperforms *if* you are healthy. Why should Americans be incentivized to take care of their bodies? We should be able to eat whatever we want, smoke cigarretes, and watch TV all weekend without exercising. It's not fair for people who choose to maintain their health to get a tax-deduction on their HSAs and get to accumulate it tax-free when others get no deductions on their full-service insurance plans to pay for obesity-induced diabetes, smoking-related lung cancer, and diabetes/smoking induced heart disease.

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[Quote=Greling1]I also eat less red meat and salty foods, and now I eat more fruits and veggies, which brought my monthly grocery bill down by $90. [Quote=Greling2]I eat gourmet things like bourbon braised mandarin orange pork chops for dinner, Ramen Noodle Egg Foo Yung for lunch, and orange peel zest cinnamon toast with buttered grits for breakfast.

Will the real Greling please stand

BEEFjerKAY said: barefool said: BEEFjerKAY said: barefool said: The letter states that the new law "would result in significant premium increases for individuals with existing coverage."... and the letter probably should have also stated that there would be significant premium increases for individuals with existing coverage even if the new law did not go into effect.You believe that the AAA would have written a letter to Congress urging them to reconsider the bill because the effects would be ... not very different from the status quo? Even actuaries don't exhibit that level of pedantry.

I guess I need to find me a better sort of actuaries to hang with.

At the risk of offending, for many actuaries the goal is to come back with the number their client is looking for. Not unlike more aggressive accountants.

Last I checked, there are very few actuaries in line for beatification. Most are financial guns for hire. And I mean that as a very high form of compliment.
For the sake of argument, let's say that the American Academy of Actuaries is objective and not beholden to any vested interests. I think it would be useful to actually read their March 8, 2010 letter to Congress and put barefool's quote from that letter in context. I bolded the sentence of the one occurrence of the phrase, "would result in significant premium increases":

Make the grandfathering provisions effective — To the extent that proposed market reforms
would result in significant premium increases for individuals with existing coverage, the
grandfathering provisions in the bills would insulate to varying degrees individuals with
existing coverage from experiencing rate shock. In the House bill, individual coverage would
be grandfathered as of Dec. 31, 2012, with group plans in existence on that date subject to a
five-year grace period to meet the new standards. However, in the Senate-passed legislation,
the grandfathering provisions would not extend to individuals purchasing coverage after
enactment but prior to when new market reforms become effective in 2014. Such individuals
would not have protection against rate shock unless their coverage already followed the new
rules. Making the effective date for the grandfathering provisions Dec. 31, 2013 rather than
the date of enactment would eliminate this gap. If the effective date is left unchanged,
legislation should clarify that the new plan provisions designed to take effect in 2010 (e.g.,
prohibition of lifetime benefit limits) would not void grandfathered status and that plans with
minor coverage changes would retain grandfathered status.
This is just one aspect of the letter and the quoted section talks about how to insulate individuals from "rate shock" by reconsidering the grandfathering provisions. Of course, "reconsidering" means changing certain provisions of the bill, not abandoning the bill.

As stated near the end of the letter:

On behalf of the American Academy of Actuaries’ Health Practice Council, I wish to again urge
you to carefully reconsider your legislative approach according to the concerns outlined above.
Our actuaries welcome the opportunity to serve as an ongoing resource to you on health care
reform issues throughout this legislative process.

To summarize, the concerns (and suggestions) in the letter (including the above-mentioned grandfathering) are:

* Strengthen the individual mandate
* Make the grandfathering provisions effective
* Modify the medical loss ratio requirements
* Create a level playing field for new health insurance plans
* Base insurance oversight on actuarial principle
* Modify the excise tax on employer-sponsored health insurance
* Strengthen the eligibility requirements in the CLASS Act

Even after the bill was signed, the AAA still wants to make sure the bill is successfully implemented, as described in their March 24, 2010 letter to members of Congress. For example:

Now that President Obama has signed into law the Patient Protection and Affordable
Care Act, thereby enacting comprehensive health reform, attention must now turn to
successfully implementing it and forthcoming reconciliation legislation. This will require a
coordinated effort to ensure the regulatory development process accomplishes the intended
goals of the reform including: increasing access to affordable health insurance coverage,
enhancing the quality of care, and addressing health spending growth.

The American Academy of Actuaries’1 Health Practice Council shares these goals
and pledges to work with regulatory authorities as they begin the implementation process,
and to the extent possible, improve upon the framework as laid out in the new law. Actuarial
expertise will be essential in the development of new regulations if the insurance market is to
successfully implement health care reform. Many of the details regarding implementation
will need to be worked out at both the federal and state levels, and actuaries are committed to
working with federal and state regulators throughout the implementation process.
I'm going to the trouble of quoting all this because the purpose of the letter is to point out provisions of the Act which the AAA thinks need addressing, not to come up with hard figures, not to try to compare the status quo (no Act) versus passage of the Act, and not to make a statement about whether or not the Act itself should be passed. There's quite a difference between constructive criticism and outright condemnation.

As barefool has done, one can choose whatever factors one wants in terms of predicting increases in current health insurance premiums with or without the passage of the Act, but that isn't the purpose of the AAA letter, and the letter (I think properly) doesn't even try to address that question.

ETA: I apologize for continuing the OT conversation.