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View Diary: HCR:  Where Do We Go Now, Sweet Child 'O Mine? (45 comments)

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  •  I still don't see why HSA is junk (0+ / 0-)

    And FSA- why exactly is FSA regressive? Like any and all deductions, they actually gradually start to phase out when your income approaches $200k.

    And back to HSA- why exactly do you all it junk? It really motivates the insured patient to watch out for the spending. The HMO type plans provide a perverse incentive. Suppose you have a choice of 2 doctors for a cataract operation. Doctor A charges $4000. Doctor B practices at a prestigious teaching university hospital. He charges $12000. If you were on HMO- you'd probably pick Doctor B because you'd surmise that the higher priced doctor must be doing a better job, and in any event your out of pocket charge is $50 either way.

    •  On HSAs: (0+ / 0-)

      I pose the same public policy question to you:  Do you think a $5,000 deductible policy is a public policy for a family earning $50,000/yr. with a diabetic child?

      The problem with high deductible plans, as I also pointed out earlier, is that people cut out both the good and the bad.  On the positive side, the HSA would force the person to choose the cheaper doctor.  On the negative side, the high deductible encourages people to forgo good treatments as well, i.e., counseling, that prevent large medical expenses, i.e., hospitalization.

      •  High deductible is only half the equation (0+ / 0-)

        The other half is enforced savings. The premium is automatically put into the HSA account for the patient.

        So now you are correct that somebody who has a chronic need will more likely max out the out-of-pocket limit in a HSA plan than in a HMO plan. But on the positive side, the premium cost will be lower for everyone due to the collective effort at saving money. You could also change the deductible slightly such that the individual limit is lower, but the family limit is higher. Usually in one family only one person has chronic needs.

        The bottom line is that the insured patient has to be incentivized to watch the expenses. The HMO plan, with the fixed co-pay does the worst job at this.

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