Why are HSA plans good for insurance companies? (medical, hospital, doctor)

[Peregrine]

I just don't understand why this is the latest rage in healthcare. I understand the benefits to the patient. But I do not see what the insurance company gets out of it.

To quickly explain the basic HSA: You have a very high deductible. Like $2,000. Until you hit that number you have to pay out of pocket for everything. Once you hit that number the rest of that year you pay just about nothing.
I get it in the beginning. If I am paying for my prescriptions with an HSA I may shop around to get a better price. I may avoid going to the doctor.
But if something happens where you hit that number?

2 examples: Wife got pregnant. She hit her $1,500 deduct in ONE office visit with a sonogram. The entire rest of her pregnancy, including all future Dr. visits and the $18,000 delivery charge, was paid for. Well hell, after that she went to see a doctor about a mole she wanted removed. She went and got some tests done on some other issues. Things she would not have done with a traditional health plan.

Older gent friend of mine has an HSA. He hit his deduct when he had to have knee surgery. He is an older gent so after he hit that deduct he started going to the Dr. for EVERYTHING. He got a colonoscopy, he got some other tests that older people should get done. Generally very anti-going-to-the-doctor this guy became the poster child for preventative care.

I understand why it is good for patients.... but how are insurance companies saving any money????? Why are they pushing HSA's so hard???

[Briolat21]

Well, first of all - a lot of them don't work like what you just decribed.

For instance - for our plan (family), the deductible is 3,000. You pay 100% of everything up to $3,000 - after which you pay only copays/coinsurance up to $6,000. At $6,000 everything is free.

How many people rack up $6,000 in a year?

I (and the health insurance companies, and the employers switching to these plans) are betting its a big minority!!

Compared to the old HMO days where everything was 90% covered at the very beginning, and you might only pay $300 out of pocket the whole year.

We were on an HRA this year (similar, but not exactly like an HSA) with an individual minimum of $1500. Once $1500 deductible is satisfied, copay up to $3000 - then 100% coverage.

As of Dec 1, I had spent $1400 out of my pocket and had not yet reached the deductible. My husband had spent $300. So, we're out $1700 for the year (plus our monthly premiums of course!) and still hadn't reached a copay or full coverage level.

The previous year (under an HMO plan - the last year the offered the HMO plan) we spent about $250 in copays.

So, yeah, for people who don't use a lot of medical services, these plans are AWESOME for insurers.

We switched to an HSA, so that if we dont' use all the money we can at least roll it over every year and garner some savings. That way when the year comes that we do need a procedure of somekind, we'll have the savings to pay for it.

Gimme an old style HMO any day -- but HSAs/HRAs are the future - get used to them.

[gardener34]

Yeah, I like our HSA in that we are forced to save $$$ every month just to cover the deductible. But for 3 years we just mostly paid out of pocket ($2500 family deductible) for everything. Guess where all our discretionary spending money goes now.

Where as before we just had a $20 co-pay. I recently had one minor outpatient procedure done and it costed us out of pocket til the insurance kicked in and covered 90%. The surgery center bill alone was $5000+, surgeon was $2500, + other related bills.

I hate it, it discourages us from getting checkups and necessary tests done since they cost so much. At least we had the HSA acct to cover some of it. the company matches a certain percentage of what we put it, but how long will that last? They also used to match 401K contributions (no longer!).

I don't know what the new healthcare plan how all these will be affected- haven't heard yet.

[Leilani Vasquez]

We switched to the high deductible plan last year after our premium rose 35%. One of the girls I work with ended up in the hospital because she couldn't afford her medication. She was taking pills for high blood pressure, cholesterol and diabetes.

I contribute $60/month to my HSA. That's about all I can afford right now. Thankfully no one in my family has any health issues.