Making Psychological Shift to High Deductibles, Funded HSA

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delrinson
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Making Psychological Shift to High Deductibles, Funded HSA

Post by delrinson »

After many years with excellent "typical" health insurance (low deductibles, co-pays for office visits and prescriptions), we are moving to a high deductible plan with an employer-funded HSA. While the degree to which the HSA will be funded is adequate even generous, I find myself struggling with the entirely new mindset we'll have to adopt. In a sense my issues are more psychological than financial.

Some musings:

1. There's a strong disincentive to use the HSA for its intended purpose. If I can afford medical care using after tax dollars (which I can), it makes sense simply to let the HSA build up.

2. There's a relative disincentive to seek medical care at all unless absolutely necessary. I wouldn't hesitate to spend the co-pay for an office visit or a prescription; I've been inclined to be proactive. But, if I know I'm paying full fare until the deductible is met, I'll be reluctant to seek medical attention due to the cost.

3. In general I think I'm going to be much more cost conscious about medical care than I've ever been. In itself, there is surely a good thing. But it's something of an abrupt transition such that the cost of medical care is taking up more bandwidth (aka worry) than I'm accustomed to.

For those of you who've navigated a transition like this, any tips, advice, strategies?

Thankfully we have the financial resources to handle whatever might arise. As I say, my struggle is with the change of mindset.

Thanks!
JBTX
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Re: Making Psychological Shift to High Deductibles, Funded HSA

Post by JBTX »

delrinson wrote: Thu Sep 19, 2019 6:20 pm After many years with excellent "typical" health insurance (low deductibles, co-pays for office visits and prescriptions), we are moving to a high deductible plan with an employer-funded HSA. While the degree to which the HSA will be funded is adequate even generous, I find myself struggling with the entirely new mindset we'll have to adopt. In a sense my issues are more psychological than financial.

Some musings:

1. There's a strong disincentive to use the HSA for its intended purpose. If I can afford medical care using after tax dollars (which I can), it makes sense simply to let the HSA build up.

2. There's a relative disincentive to seek medical care at all unless absolutely necessary. I wouldn't hesitate to spend the co-pay for an office visit or a prescription; I've been inclined to be proactive. But, if I know I'm paying full fare until the deductible is met, I'll be reluctant to seek medical attention due to the cost.

3. In general I think I'm going to be much more cost conscious about medical care than I've ever been. In itself, there is surely a good thing. But it's something of an abrupt transition such that the cost of medical care is taking up more bandwidth (aka worry) than I'm accustomed to.

For those of you who've navigated a transition like this, any tips, advice, strategies?

Thankfully we have the financial resources to handle whatever might arise. As I say, my struggle is with the change of mindset.

Thanks!
I've found all these to be true with HSA plans. When I have a choice of plans, I run scenarios of which is likely a better deal. At that point I have to tell myself that paying the out of pocket is offsetting my premium savings. But nonetheless your points 2 and 3 still hold.

Historically I've ended up emptying the HSA on health care expenditures. I do the HSA mainly to get the upfront tax and fica deductions. In terms of an investment account, often the choices aren't great and there are nickel and dime fees. Whether I deplete it this year I'm not sure.
classicindexer
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Re: Making Psychological Shift to High Deductibles, Funded HSA

Post by classicindexer »

I switched to a HDHP with HSA when I was young and healthy. Having rarely used health insurance and seeing that my out of pocket payroll contributions were drastically decreasing, my mind shift was easier.

Yes I find myself waiting a little longer to go to the Doctor especially if it’s just a common cold once or twice a year. I’ll typically try over the counter medicine first knowing it will cost more to go see the Doctor. I went to an Urgent Care once with a HDHP and for $125 or so they told me to take OTC medicine for my cold/congestion.

Since then though I’ve also accumulated more money in the HSA and in a taxable emergency fund so there is piece of mind that there is money there to cover a doctor’s visit, prescription or surgery. Also knowing that the HSA is invested in low cost index funds and is working for me long term also makes me happy.

Your HDHP will probably include 100% coverage for a lot of preventative services which is a reason to go for preventative exams. Mine does, so I make sure to go my annual physical exam each year. Some plans also have 0% co-insurance after the deductible is met, although I think that is becoming more rare these days to keep the premiums lower. DW and I have 20% coinsurance after our family deductible is met.

Best of luck with your transition!
gowri
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Re: Making Psychological Shift to High Deductibles, Funded HSA

Post by gowri »

I made the switch when Obamacare increased my premiums from $150 per month (for me and my husband) to $400 per month. Keeping $400 post tax money with ourselves (till we really need it) and the tax advantage of HSA was not only enough make the switch but also made me feel bad that I didn't do it earlier.
Tdubs
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Re: Making Psychological Shift to High Deductibles, Funded HSA

Post by Tdubs »

First year in an HSA, and I experienced everything you noted. My family doesn't understand the HDHP/HSA and have just gone for medical care as they would normally, and boy that was a lot this year. Burned through the $3k deductible in just a few months. I was not ready for that and started tapping the HSA.

Now we hit the deductible, the tiny bills make me smile and I pay out of pocket. Next year, I'll factor in the expensive months (January-April) better.

For my part, I made a conscious effort to go to the doctor--use all the free preventative care like a teeth cleaning, physical and colonoscopy. Glasses next. So I think I'm doing well and do not chintz on health care to save money.
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nps
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Re: Making Psychological Shift to High Deductibles, Funded HSA

Post by nps »

Tdubs wrote: Thu Sep 19, 2019 7:03 pm First year in an HSA, and I experienced everything you noted. My family doesn't understand the HDHP/HSA and have just gone for medical care as they would normally, and boy that was a lot this year. Burned through the $3k deductible in just a few months. I was not ready for that and started tapping the HSA.
Sounds like you see the HDHP a self-incentive to seek less medical care. I personally never looked at it that way. I expect my family to seek medical care under HDHP the same as they would under more traditional insurance. And when I run the numbers every year to compare, I never assume the HDHP will drive different behavior. This frame of view may help to overcome the psychological issues.
Tdubs
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Re: Making Psychological Shift to High Deductibles, Funded HSA

Post by Tdubs »

nps wrote: Thu Sep 19, 2019 8:07 pm
Tdubs wrote: Thu Sep 19, 2019 7:03 pm First year in an HSA, and I experienced everything you noted. My family doesn't understand the HDHP/HSA and have just gone for medical care as they would normally, and boy that was a lot this year. Burned through the $3k deductible in just a few months. I was not ready for that and started tapping the HSA.
Sounds like you see the HDHP a self-incentive to seek less medical care. I personally never looked at it that way. I expect my family to seek medical care under HDHP the same as they would under more traditional insurance. And when I run the numbers every year to compare, I never assume the HDHP will drive different behavior. This frame of view may help to overcome the psychological issues.
No I don't expect my family to change their behavior. I expect them to go for care as they always have--and they did! My young adult kids don't know what an HDHP is. My wife knows but doesn't think about the bills or see them. But I know and I pay the bills, and as the OP noted and research shows, cost is a psychological disincentive to seeking care. So I have to tell myself to go, and so far, I have.
rich126
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Re: Making Psychological Shift to High Deductibles, Funded HSA

Post by rich126 »

I just started one in June with a new job. My deductible is $1,600 just for me. I’ve stayed with the preffered doctors and so far it seems ok but I will see how it goes. I don’t plan to spend the money in the account and will let it accumulate. So far I didn’t have to pay anything for my bp med nor my shingles shot. We’ll see if I get a bill in the mail.

I had fed BCBS for the last 6 years.
----------------------------- | If you think something is important and it doesn't involve the health of someone, think again. Life goes too fast, enjoy it and be nice.
BuddyJet
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Re: Making Psychological Shift to High Deductibles, Funded HSA

Post by BuddyJet »

OP, does the employer fund the family deductible or only your individual?

In general, if you believe that a person will meet the deductible, act as before. If you don’t expect to meet deductible, try to economize but not at the expense of general health. If family deductible looks to be met, get aggressive with deferred treatment.

To the extent possible, shift treatment and prescription expenses forward or back if it helps meet deductible for that year.

If you don't expect to meet deductible, compare prescription prices through insurance against GoodRX with cash. If large difference, it may be better to go goodrx rather than insurance.

In my mind, I had to accept the new game and figure out how to best deal with the new rules.
People say nothing is impossible. I do nothing all day.
dcabler
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Re: Making Psychological Shift to High Deductibles, Funded HSA

Post by dcabler »

I had to make the same mental shift. Previous company had a traditional PPO plan. The deductible was somewhat high, but they offset it by funding an HRA (not an HSA) that was almost the same amount as the deductible. And prescriptions weren't subject to the deductible, but we could get reimbursed for them as well from the HRA. We had to pay part of the insurance premium.

Shifted next to a company with an HDHP and HSA and the company pays 100% of the premiums. Some spreadsheet analysis with the last couple of years medical expenses for us showed the total out of pocket would have been close to a wash for us, assuming that I actually used the HSA itself to pay for things. So each time I had to pay what seems like a crazy amount for a doctor visit or a prescription copay I had to kick myself once again that I'm not paying for the premium and those costs were being paid with pre-tax money. After about a year of doing that, we switched to paying directly for any medical bills and are letting the HSA grow to be used post-retirement. I'm 58 and only have been on a HDHP plan for a couple of years, so it's unlikely that the HSA will grow to epic proportions before I retire, but still doing it.
harvestbook
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Re: Making Psychological Shift to High Deductibles, Funded HSA

Post by harvestbook »

After eight years of expensive private health insurance and only once hitting anything close to a "serious" medical event, I was totally at ease switching to a HDHP/HSA plan via ACA this year. So far it has been great. We could've afforded a better plan but because of our high investing rate, we get free coverage. We are fully prepared to meet our family deductible ($13,000) if necessary, which is still cheaper than I was previously paying annually for coverage. Otherwise not a whole lot has changed. I did delay seeking treatment for a strained achilles, but that was more out of stubbornness. Oddly, I've found that the cost of my prescription medicines and my eye doctor visits to monitor eye pressure both actually decreased by paying out of pocket. My generic meds are now cheaper than my previous co-pays while insured.

We use our HSA differently than most people. We put several thousand in an HSA at our local credit union at 2.5 percent and pay current expenses out of it, and fully invest the rest. When we reimburse from the HSA, we put that money in solo 401k or IRA, so in effect get a double tax deduction on the same money (this obviously doesn't matter to someone with a high income who is already maxing out tax-deferred savings. Our long-term HSA is fully invested at Fidelity but we certainly expect to spend it on health care later in life (or immediately in an emergency) instead of having a magical extra retirement account.

The major psychological shift for me was realizing how screw-up the system is, but I don't make the rules.
I'm not smart enough to know, and I can't afford to guess.
557880yvi
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Re: Making Psychological Shift to High Deductibles, Funded HSA

Post by 557880yvi »

delrinson wrote: Thu Sep 19, 2019 6:20 pm
For those of you who've navigated a transition like this, any tips, advice, strategies?
Hi delrinson,
We have just gone through this change in mindset over the past 2 years - not originally because it was a deliberate choice. Our health insurance was with a large int'l company was a self-insured plan and they changed the offerings and premiums such that keeping a non-HD with HSA plan was so expensive that many could not longer afford to keep what I call "real health insurance".

Fast forward into year 2 (almost year 3) and here are our observations (positive and negative):
  • Positives:
  • Yes, you get a tax deduction for the amounts you put into an HSA so this can lower your taxes a bit (and don't forget that a spouse can open their own HSA account, although the contribution is limited. Here is an article that is helpful, just be aware it was posted by an HSA provider - Lively

    https://medium.com/@livelyme/hsas-how-t ... 4eb2f6be76
You can save with no tax on the earnings (like a ROTH) and take a deduction for the contribution. And if you are young, and/or very healthy (not chronic disease, but anyone can have an accident/emergency) and don't have children (do you really want to delay a pediatrician visit when your 3 yr old has a high fever and you want to wait until morning to see if "comes down" because you know it could be a "waste" of $250 just to walk into their office?)

Negatives:
  • This can be a +/(-) depending on how you look at it: How much time do you want to spend becoming an expert on medical billing or medical procedures?

    A HD plan forces you to learn more about the healthcare system, your health and medical billing (a positive only in the sense that more information and understanding can help you make better decisions and possibly avoid unnecessary procedures, medications etc. because you will now more often ask "what is that for and why are you recommending this". The downside is that very few people have the time, knowledge or access to information to fully and transparently evaluate recommendations. I worked in healthcare for many years and know much more than the average person and still find it challenging to obtain all the information needed, but it does give me an advantage when discussing as providers know they cannot BS me or find out quickly if they try that they will be called out on it. A good example is going to an orthopedist and before you even have your BP taken by the aide, they send you for x-rays or an MRI! Before a doctor sees you, before anyone knows what/where the problem is. Many things can't be diagnosed with an x-ray or MRI at all - insist that you want to be seen 1st, ask why an x-ray is appropriate (find a less expensive place to get than the doctor's office - these are high profit centers)


    For any non-urgent doctor visits, procedures, etc. I know ask for Pre-determination of benefits to be submitted to my insurance so I can see what they plan to do (you might be surprised at how many unnecessary things get tacked onto bills that you can say you don't want. I check the coding - both the diagnostic code (DRG) https://www.findacode.com/drg/drg-diagn ... codes.html

    and procedure code (CPT) https://searchhealthit.techtarget.com/d ... nology-CPT

    Note also that office visits have 5 levels of coding (and cost, the higher the last digit in the code, 1-5) the more complex the visit and higher the billing. I either ask before a visit or during a visit how they are coding. They may push back but it is your right to know that. In nearly every medical visit my husband or me have had in the past 5 years, an attempt was made to "Upcode" the visit, meaning that a higher code was used than the what happened during the visit. The procedures and medical notes much match the code (and I always get copies of the medical notes before I leave) and have often found "creative wording" that are taught to substantiate a higher level visit but which did not actually happen. This is illegal, is fraud and I politely correct them. Here is a quick definition of the 5 office visit codes 99211-99212. (Note, this is copyrighted and you must click the link at the top and read their notice before reading the 2 pages):

    https://www.palmettogba.com/Palmetto/Pr ... lished.pdf

    This is what Upcoding is:

    https://www.verywellhealth.com/what-is-upcoding-2615214

    BTW, don't expect your insurance company to catch this or care - they generally don't.

    Sometime when the visit is submitted to billing or when they have separate medical coders who read the encounter notes and code the visit, it is different when submitted to insurance. I check every code on every visit on the Explanation of Benefits (EOB). I would say that in more than 75% of any claim we have had, I find wrong codes (sometimes completely wrong, not even what was done) or it was up-coded. I have fought every single one of these and won every time. If the billing office pushes back, ask to speak to the manager and explain that if you disagree, you will go to the state insurance commission or ask your insurance company to review the claim and medical notes (in the case of a self-insured plan, don't bother, they only process paperwork) 100% of the time they will correct and re-submit the claim and often write off the bill completely because they know this is going on and don't want to have any of their claims reviewed. If they accept Medicare/Medicaid patients they will be even more "receptive" to your correction.
    Negatives:
  • Although the HSA sound like a nice, albeit small tax deduction depending on your marginal tax rate, the current limits are so small that they usually won't even cover a family deductible for a year. And remember, the HSA is not free money, it is your money! A single injury or illness, i.e. broken bone, appendix removed, etc. could result in many thousands of dollars AFTER depleting your HSA of "co-insurance"
  • The most negative, non-financial downside we have found is that we have delayed or foregone doctors' visits because of cost - I don't want a $300 bill for a visit and some tests when they might not find anything wrong (sore throat was not Strep just a virus so go home and gargle with salt water). And yes, this is when you might go to a walk-in that might charge a little less but our experience has been horrific with those and wound up going back to a doctor anyway

But if you have the financial resources to cover costs, no chronic diseases and (in my opinion, no children) then the tax benefits may be worth it. We are staying on a HD/HSA to make tax room for ROTH IRA conversions. But you will have to educate yourself unless you want to be over-billed, and be ready for the "pain" of the deductibles and potentially high OOP (out-of-pocket costs).

Good luck!
aristotelian
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Re: Making Psychological Shift to High Deductibles, Funded HSA

Post by aristotelian »

I strongly disagree with #1, that investing the HSA is not using it for its "intended purpose". It is a Health Savings Account, not a Health Spending Account (which also exist). Tax free growth is built into the HSA program so saving for future expenses is most certainly one of its intended purposes.

#2 and #3 are valid concerns. You have to be OK with spending money when it comes to taking care of yourself. If it helps psychologically, you can compare the total cost when you consider lower premiums and the tax deduction from the HSA and hopefully you still come out ahead.

I do think it is better for people who are mostly healthy and don't have reason to go to the doctor much.
deltaneutral83
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Re: Making Psychological Shift to High Deductibles, Funded HSA

Post by deltaneutral83 »

There seems to be a misconception about HDHP/PPO plans in that people assume HDHP have higher costs when many if not all of the plans I've seen have lower premiums and lower out of pocket max for the HDHP while the PPO generally have lower deducts. The OOP max is much more important to me because once you've been admitted into the hospital you will blow through the OOP max. When you bank up a year or two's worth of OOP max's you alleviate many of the concerns of sticker shock of a large bill you get with the HDHP vs the PPO for everyday health care.

In other words, the "I would switch to the HDHP if I was healthy and didn't go to the Dr." The HDHP makes just as much sense on the back end if you are admitted into the hospital. It's the middle ground most times where the PPO wins and who can plan to be in the middle ground ahead of time??
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Tamarind
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Re: Making Psychological Shift to High Deductibles, Funded HSA

Post by Tamarind »

The psychological influences are definitely real. I'm young and healthy so it's obvious to me how much better the deal is with an HSA.

Because I want to use the account to invest (not getting nickled and dimed with Lively), I act like I don't have it. I pay for what little medical care I have needed out of pocket, maybe a couple hundred a year.

In the event that I had a medical expense of $1k or up, I'd save the receipt and use it for withdrawals in retirement if necessary. If something very serious happened such that I had to pay my whole deductible, I'd use my emergency fund and then figure out if I needed to tap the HSA to reimburse some of all of the emergency fund.
Hillview
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Re: Making Psychological Shift to High Deductibles, Funded HSA

Post by Hillview »

We did it this year and no regrets. Family of 4. We maxed out our deductible and are now covering a small copay. The out of pocket max and deductible are off set by the HSA tax advantage and are essentially a forced savings for us which is a good thing. We can afford to cash flow our medical expenses to the max deductible so we are fortunate. Mentally it was a challenge to take the leap so I had to run the numbers a few times to talk myself into it -- but it was really more of a mental exercise. We did not change our medical behavior.
JD2775
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Re: Making Psychological Shift to High Deductibles, Funded HSA

Post by JD2775 »

Tamarind wrote: Fri Sep 20, 2019 9:16 am

Because I want to use the account to invest (not getting nickled and dimed with Lively), I act like I don't have it. I pay for what little medical care I have needed out of pocket, maybe a couple hundred a year.
Thats exactly what I do. I switched to HSA about 4 years ago and wish I had done it sooner. I now have a nice little 15-16k balance that continues to grow and get added to each month. All health expenses get paid for by cash, I have been lucky to be relatively healthy during that time
sergio
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Re: Making Psychological Shift to High Deductibles, Funded HSA

Post by sergio »

delrinson wrote: Thu Sep 19, 2019 6:20 pm 1. There's a strong disincentive to use the HSA for its intended purpose. If I can afford medical care using after tax dollars (which I can), it makes sense simply to let the HSA build up.

2. There's a relative disincentive to seek medical care at all unless absolutely necessary. I wouldn't hesitate to spend the co-pay for an office visit or a prescription; I've been inclined to be proactive. But, if I know I'm paying full fare until the deductible is met, I'll be reluctant to seek medical attention due to the cost.

3. In general I think I'm going to be much more cost conscious about medical care than I've ever been. In itself, there is surely a good thing. But it's something of an abrupt transition such that the cost of medical care is taking up more bandwidth (aka worry) than I'm accustomed to.
Point #2 is something I've though about a lot. But I've seen so many people put off visits for potential problems because of the $2-300 bill. Things like month long coughs, rashes that won't go away, etc. It's not something I would do.

I thought the whole point of these HDHP plans was to encourage people to catch problems earlier when they are cheap to treat (eg office visit + antibiotics) vs. waiting until the problem is severe (hospital stay + expensive medications). Yes, there may be a $200 bill but the trade off is lower monthly premiums and HSA tax savings. So I'm not sure we're really better off with these plans.

It's good preventative care is covered but even those visits can be a total scam. A coworker of mine went for his 15-minute physical a few months ago. At the end the doctor asked "any other questions for me" at which point my coworker mentioned something about his hand being sore recently. Literally all the doctor said was "rest, ice, and keep an eye out on it. If it becomes a bigger issue, come back and see me". BAM - $150 bill since that went beyond the scope of an office visit. 30 second discussion, tops. He was pretty livid.

I think including "free" office visit or two for any reason would make people substantially more proactive about getting a potential problem checked out early.
classicindexer
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Re: Making Psychological Shift to High Deductibles, Funded HSA

Post by classicindexer »

sergio wrote: Fri Sep 20, 2019 11:17 am
delrinson wrote: Thu Sep 19, 2019 6:20 pm 1. There's a strong disincentive to use the HSA for its intended purpose. If I can afford medical care using after tax dollars (which I can), it makes sense simply to let the HSA build up.

2. There's a relative disincentive to seek medical care at all unless absolutely necessary. I wouldn't hesitate to spend the co-pay for an office visit or a prescription; I've been inclined to be proactive. But, if I know I'm paying full fare until the deductible is met, I'll be reluctant to seek medical attention due to the cost.

3. In general I think I'm going to be much more cost conscious about medical care than I've ever been. In itself, there is surely a good thing. But it's something of an abrupt transition such that the cost of medical care is taking up more bandwidth (aka worry) than I'm accustomed to.
Point #2 is something I've though about a lot. But I've seen so many people put off visits for potential problems because of the $2-300 bill. Things like month long coughs, rashes that won't go away, etc. It's not something I would do.

I thought the whole point of these HDHP plans was to encourage people to catch problems earlier when they are cheap to treat (eg office visit + antibiotics) vs. waiting until the problem is severe (hospital stay + expensive medications). Yes, there may be a $200 bill but the trade off is lower monthly premiums and HSA tax savings. So I'm not sure we're really better off with these plans.

It's good preventative care is covered but even those visits can be a total scam. A coworker of mine went for his 15-minute physical a few months ago. At the end the doctor asked "any other questions for me" at which point my coworker mentioned something about his hand being sore recently. Literally all the doctor said was "rest, ice, and keep an eye out on it. If it becomes a bigger issue, come back and see me". BAM - $150 bill since that went beyond the scope of an office visit. 30 second discussion, tops. He was pretty livid.

I think including "free" office visit or two for any reason would make people substantially more proactive about getting a potential problem checked out early.
I think if you’re young and healthy and rarely use your healthcare: With a HDHP/HSA you can start to pile up/invest a lot more money in the HSA vs. throwing money away to higher premiums of a plan with a lower deductible and no HSA. As you get older and use healthcare more then this starts to tip into the questionable area of which one is better.

HSA also can fund dental services that are hardly covered by insurance such as adult/children braces, root canals, etc. Another reason for our family to max out/invest the HSA every year.
MtnTraveler
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Re: Making Psychological Shift to High Deductibles, Funded HSA

Post by MtnTraveler »

delrinson wrote: Thu Sep 19, 2019 6:20 pm 2. There's a relative disincentive to seek medical care at all unless absolutely necessary. I wouldn't hesitate to spend the co-pay for an office visit or a prescription; I've been inclined to be proactive. But, if I know I'm paying full fare until the deductible is met, I'll be reluctant to seek medical attention due to the cost.

3. In general I think I'm going to be much more cost conscious about medical care than I've ever been. In itself, there is surely a good thing. But it's something of an abrupt transition such that the cost of medical care is taking up more bandwidth (aka worry) than I'm accustomed to.

For those of you who've navigated a transition like this, any tips, advice, strategies?

Thanks!
So we switched to a HDHP 2 yrs ago. I fund that line item in my budget each year to handle the worst case scenario and then some (we do meet the OOP max each year and quite a few specialists my daughter sees are cash-only). I worry more about getting the best care I can within reason (DD's two cash-only specialists are the best, they know my daughter and how her condition affects her, and she sees them a max of 6 times a yr) and making sure to stay as healthy as we can. Staying healthy means seeking care at the appropriate times because delaying will sometimes often cost a lot more in the end.

I realize I come to this topic with experience others haven't had but the amount of money I save now with my DD is because we spent a lot of money on drs, surgeries, specialists, therapy, etc when she was growing up. It was the absolute best money we spent because had we not she'd be unable to work full-time and I would have had to support her the rest of her life. There was never a guaranteed outcome (trust me I made decision based on the worst case scenario that I now regret) but we also knew that 20 PT/OT visits a year was not going to make much of an impact. We needed to invest in her health in order to ever have a chance at retirement.
sergio
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Re: Making Psychological Shift to High Deductibles, Funded HSA

Post by sergio »

classicindexer wrote: Fri Sep 20, 2019 11:27 am
sergio wrote: Fri Sep 20, 2019 11:17 am
delrinson wrote: Thu Sep 19, 2019 6:20 pm 1. There's a strong disincentive to use the HSA for its intended purpose. If I can afford medical care using after tax dollars (which I can), it makes sense simply to let the HSA build up.

2. There's a relative disincentive to seek medical care at all unless absolutely necessary. I wouldn't hesitate to spend the co-pay for an office visit or a prescription; I've been inclined to be proactive. But, if I know I'm paying full fare until the deductible is met, I'll be reluctant to seek medical attention due to the cost.

3. In general I think I'm going to be much more cost conscious about medical care than I've ever been. In itself, there is surely a good thing. But it's something of an abrupt transition such that the cost of medical care is taking up more bandwidth (aka worry) than I'm accustomed to.
Point #2 is something I've though about a lot. But I've seen so many people put off visits for potential problems because of the $2-300 bill. Things like month long coughs, rashes that won't go away, etc. It's not something I would do.

I thought the whole point of these HDHP plans was to encourage people to catch problems earlier when they are cheap to treat (eg office visit + antibiotics) vs. waiting until the problem is severe (hospital stay + expensive medications). Yes, there may be a $200 bill but the trade off is lower monthly premiums and HSA tax savings. So I'm not sure we're really better off with these plans.

It's good preventative care is covered but even those visits can be a total scam. A coworker of mine went for his 15-minute physical a few months ago. At the end the doctor asked "any other questions for me" at which point my coworker mentioned something about his hand being sore recently. Literally all the doctor said was "rest, ice, and keep an eye out on it. If it becomes a bigger issue, come back and see me". BAM - $150 bill since that went beyond the scope of an office visit. 30 second discussion, tops. He was pretty livid.

I think including "free" office visit or two for any reason would make people substantially more proactive about getting a potential problem checked out early.
I think if you’re young and healthy and rarely use your healthcare: With a HDHP/HSA you can start to pile up/invest a lot more money in the HSA vs. throwing money away to higher premiums of a plan with a lower deductible and no HSA. As you get older and use healthcare more then this starts to tip into the questionable area of which one is better.

HSA also can fund dental services that are hardly covered by insurance such as adult/children braces, root canals, etc. Another reason for our family to max out/invest the HSA every year.
I agree it's a no-brainer if you are young and healthy to go with the lower-premium, HDHP/HSA plan. But not everyone can choose freely between one plan or another. I work for a small company and we basically have two options: A plan with a $6k family OOP max or a $10k family OOP max. A coworker's wife works for a megacorp and all their plans are high deductible, with the "best" plan having a $4.8k family OOP max. Not necessarily great for a couple in their 50s with three kids or someone with chronic conditions. I love my job but as my wife and I get older and the family gets larger, it kind of sucks I need to start taking into account health insurance in my employment decision. Such is life nowadays, I guess.
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BogleFanGal
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Re: Making Psychological Shift to High Deductibles, Funded HSA

Post by BogleFanGal »

We've been on one for 9 years - I really like it in many ways and we've built up a nice HSA acct, even though I only keep it invested very conservatively in a money market. My biggest beef was mentioned by an earlier poster - lack of consumer pricing transparency and complexity of coding - it is the bane of HDHP policy holders.

I have yet to experience a single "100% covered" annual wellness visit in 9 years: doc always orders a few blood tests not covered - my plan only covers preventive tests that the ACA/Obamacare does. Or insurer claim the test may be eligible but not under the code the lab used. Lab claims that's the correct code. Doc says it's the right code. Back and forth until I give up because I work full time and don't have time/energy to keep fighting over $100. Rinse & repeat w/DH doc & lab work.

Insurance advertises a preventive colonoscopy is covered 100%. But the pre-procedure screening visit every doc requires isn't. Extra $250.

Last year's single afternoon visit to a urgent care center for a flu diagnosis and tamiflu script cost $1,000 between facility, lab and physician fees - no way to find out until I got the bill. I tried asking them. I tried calling insurer. :annoyed

Until legislation is passed to ensure clearer pricing transparency upfront vs today's deceptive practices, the frustration of managing costs on an HDHP plan will continue.
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Re: Making Psychological Shift to High Deductibles, Funded HSA

Post by fatmike91 »

We made the switch this year. Then proceeded to have the highest healthcare spending ever in my household...but still, we'll end up spending LESS than my former PMO plan.

So, my advise is do the math. All of the math starting from how much the plan costs, to the out of pocket limits, etc.

We ended up better off financially even in the bad scenario.

Much higher burden though on us to submit expenses for re-imbursement, etc. To me the hassle is a bigger issue than the money.

/
sergio
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Re: Making Psychological Shift to High Deductibles, Funded HSA

Post by sergio »

BogleFanGal wrote: Fri Sep 20, 2019 11:56 am We've been on one for 9 years - I really like it in many ways and we've built up a nice HSA acct, even though I only keep it invested very conservatively in a money market. My biggest beef was mentioned by an earlier poster - lack of consumer pricing transparency and complexity of coding - it is the bane of HDHP policy holders.

I have yet to experience a single "100% covered" annual wellness visit in 9 years: doc always orders a few blood tests not covered - my plan only covers preventive tests that the ACA/Obamacare does. Or insurer claim the test may be eligible but not under the code the lab used. Lab claims that's the correct code. Doc says it's the right code. Back and forth until I give up because I work full time and don't have time/energy to keep fighting over $100. Rinse & repeat w/DH doc & lab work.

Insurance advertises a preventive colonoscopy is covered 100%. But the pre-procedure screening visit every doc requires isn't. Extra $250.

Last year's single afternoon visit to a urgent care center for a flu diagnosis and tamiflu script cost $1,000 between facility, lab and physician fees - no way to find out until I got the bill. I tried asking them. I tried calling insurer. :annoyed

Until legislation is passed to ensure clearer pricing transparency upfront vs today's deceptive practices, the frustration of managing costs on an HDHP plan will continue.
I did do some limited "shopping around" and because most physicians seem to be part of these Mega Health Organizations, there wasn't much variety in pricing. Simple office visits were all in the $180-220 range. And it took a lot of time to dig up the numbers. IMO they should be on a sign at the front window like at a fast food restaurant. But that may get people to pay attention and start shopping around/comparing prices...

There are a few excellent cash-only general practitioners in my area that charge around $120 for a 15 minute visit which is a great deal, but it doesn't go thru insurance and doesn't count towards the OOP max. The nice thing is every single charge is right on their websites and the Pricing link is on the front page.
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Re: Making Psychological Shift to High Deductibles, Funded HSA

Post by FoolStreet »

sergio wrote: Fri Sep 20, 2019 11:36 am
classicindexer wrote: Fri Sep 20, 2019 11:27 am
sergio wrote: Fri Sep 20, 2019 11:17 am
delrinson wrote: Thu Sep 19, 2019 6:20 pm 1. There's a strong disincentive to use the HSA for its intended purpose. If I can afford medical care using after tax dollars (which I can), it makes sense simply to let the HSA build up.

2. There's a relative disincentive to seek medical care at all unless absolutely necessary. I wouldn't hesitate to spend the co-pay for an office visit or a prescription; I've been inclined to be proactive. But, if I know I'm paying full fare until the deductible is met, I'll be reluctant to seek medical attention due to the cost.

3. In general I think I'm going to be much more cost conscious about medical care than I've ever been. In itself, there is surely a good thing. But it's something of an abrupt transition such that the cost of medical care is taking up more bandwidth (aka worry) than I'm accustomed to.
Point #2 is something I've though about a lot. But I've seen so many people put off visits for potential problems because of the $2-300 bill. Things like month long coughs, rashes that won't go away, etc. It's not something I would do.

I thought the whole point of these HDHP plans was to encourage people to catch problems earlier when they are cheap to treat (eg office visit + antibiotics) vs. waiting until the problem is severe (hospital stay + expensive medications). Yes, there may be a $200 bill but the trade off is lower monthly premiums and HSA tax savings. So I'm not sure we're really better off with these plans.

It's good preventative care is covered but even those visits can be a total scam. A coworker of mine went for his 15-minute physical a few months ago. At the end the doctor asked "any other questions for me" at which point my coworker mentioned something about his hand being sore recently. Literally all the doctor said was "rest, ice, and keep an eye out on it. If it becomes a bigger issue, come back and see me". BAM - $150 bill since that went beyond the scope of an office visit. 30 second discussion, tops. He was pretty livid.

I think including "free" office visit or two for any reason would make people substantially more proactive about getting a potential problem checked out early.
I think if you’re young and healthy and rarely use your healthcare: With a HDHP/HSA you can start to pile up/invest a lot more money in the HSA vs. throwing money away to higher premiums of a plan with a lower deductible and no HSA. As you get older and use healthcare more then this starts to tip into the questionable area of which one is better.

HSA also can fund dental services that are hardly covered by insurance such as adult/children braces, root canals, etc. Another reason for our family to max out/invest the HSA every year.
I agree it's a no-brainer if you are young and healthy to go with the lower-premium, HDHP/HSA plan. But not everyone can choose freely between one plan or another. I work for a small company and we basically have two options: A plan with a $6k family OOP max or a $10k family OOP max. A coworker's wife works for a megacorp and all their plans are high deductible, with the "best" plan having a $4.8k family OOP max. Not necessarily great for a couple in their 50s with three kids or someone with chronic conditions. I love my job but as my wife and I get older and the family gets larger, it kind of sucks I need to start taking into account health insurance in my employment decision. Such is life nowadays, I guess.
Sergio, $4.8k per year for a couple in their 50s, 3 kids and chronic conditions sounds like a great deal, no?
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Re: Making Psychological Shift to High Deductibles, Funded HSA

Post by sergio »

FoolStreet wrote: Sat Sep 21, 2019 3:47 am
sergio wrote: Fri Sep 20, 2019 11:36 am
classicindexer wrote: Fri Sep 20, 2019 11:27 am
sergio wrote: Fri Sep 20, 2019 11:17 am
delrinson wrote: Thu Sep 19, 2019 6:20 pm 1. There's a strong disincentive to use the HSA for its intended purpose. If I can afford medical care using after tax dollars (which I can), it makes sense simply to let the HSA build up.

2. There's a relative disincentive to seek medical care at all unless absolutely necessary. I wouldn't hesitate to spend the co-pay for an office visit or a prescription; I've been inclined to be proactive. But, if I know I'm paying full fare until the deductible is met, I'll be reluctant to seek medical attention due to the cost.

3. In general I think I'm going to be much more cost conscious about medical care than I've ever been. In itself, there is surely a good thing. But it's something of an abrupt transition such that the cost of medical care is taking up more bandwidth (aka worry) than I'm accustomed to.
Point #2 is something I've though about a lot. But I've seen so many people put off visits for potential problems because of the $2-300 bill. Things like month long coughs, rashes that won't go away, etc. It's not something I would do.

I thought the whole point of these HDHP plans was to encourage people to catch problems earlier when they are cheap to treat (eg office visit + antibiotics) vs. waiting until the problem is severe (hospital stay + expensive medications). Yes, there may be a $200 bill but the trade off is lower monthly premiums and HSA tax savings. So I'm not sure we're really better off with these plans.

It's good preventative care is covered but even those visits can be a total scam. A coworker of mine went for his 15-minute physical a few months ago. At the end the doctor asked "any other questions for me" at which point my coworker mentioned something about his hand being sore recently. Literally all the doctor said was "rest, ice, and keep an eye out on it. If it becomes a bigger issue, come back and see me". BAM - $150 bill since that went beyond the scope of an office visit. 30 second discussion, tops. He was pretty livid.

I think including "free" office visit or two for any reason would make people substantially more proactive about getting a potential problem checked out early.
I think if you’re young and healthy and rarely use your healthcare: With a HDHP/HSA you can start to pile up/invest a lot more money in the HSA vs. throwing money away to higher premiums of a plan with a lower deductible and no HSA. As you get older and use healthcare more then this starts to tip into the questionable area of which one is better.

HSA also can fund dental services that are hardly covered by insurance such as adult/children braces, root canals, etc. Another reason for our family to max out/invest the HSA every year.
I agree it's a no-brainer if you are young and healthy to go with the lower-premium, HDHP/HSA plan. But not everyone can choose freely between one plan or another. I work for a small company and we basically have two options: A plan with a $6k family OOP max or a $10k family OOP max. A coworker's wife works for a megacorp and all their plans are high deductible, with the "best" plan having a $4.8k family OOP max. Not necessarily great for a couple in their 50s with three kids or someone with chronic conditions. I love my job but as my wife and I get older and the family gets larger, it kind of sucks I need to start taking into account health insurance in my employment decision. Such is life nowadays, I guess.
Sergio, $4.8k per year for a couple in their 50s, 3 kids and chronic conditions sounds like a great deal, no?
Depends on the premiums - at $400/month it's a great deal. At $1,600/month, I'd say no.
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Re: Making Psychological Shift to High Deductibles, Funded HSA

Post by arcticpineapplecorp. »

I agree with your musings and found the same incentives/disincentives when evaluating an HSA for my brother and his family. If you had the money for the deductible, then it would be ideal to let the account grow and use it for medical expenses in retirement.

That being said, HSAs have been called the Ultimate Retirement Account (by Mad Fientist anyway) because unlike traditional IRAs and post tax IRAs (Roths), the money that goes in is not taxed, grows tax free, and if used for qualified expenses (medical) is withdrawn tax free:

https://www.madfientist.com/ultimate-re ... t-account/
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Re: Making Psychological Shift to High Deductibles, Funded HSA

Post by Kenkat »

Someone please correct me if I am wrong here, but unless you are maxing out all your other tax deferred opportunities (IRAs, etc.), it doesn’t really matter whether you pay medical expenses from the HSA or out of pocket after tax. You could put the after pocket money into a retirement IRA or Roth IRA instead and use the HSA to cover medical expenses. It ends up the same.
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Re: Making Psychological Shift to High Deductibles, Funded HSA

Post by FoolStreet »

sergio wrote: Sat Sep 21, 2019 9:42 am
FoolStreet wrote: Sat Sep 21, 2019 3:47 am
sergio wrote: Fri Sep 20, 2019 11:36 am
classicindexer wrote: Fri Sep 20, 2019 11:27 am
sergio wrote: Fri Sep 20, 2019 11:17 am

Point #2 is something I've though about a lot. But I've seen so many people put off visits for potential problems because of the $2-300 bill. Things like month long coughs, rashes that won't go away, etc. It's not something I would do.

I thought the whole point of these HDHP plans was to encourage people to catch problems earlier when they are cheap to treat (eg office visit + antibiotics) vs. waiting until the problem is severe (hospital stay + expensive medications). Yes, there may be a $200 bill but the trade off is lower monthly premiums and HSA tax savings. So I'm not sure we're really better off with these plans.

It's good preventative care is covered but even those visits can be a total scam. A coworker of mine went for his 15-minute physical a few months ago. At the end the doctor asked "any other questions for me" at which point my coworker mentioned something about his hand being sore recently. Literally all the doctor said was "rest, ice, and keep an eye out on it. If it becomes a bigger issue, come back and see me". BAM - $150 bill since that went beyond the scope of an office visit. 30 second discussion, tops. He was pretty livid.

I think including "free" office visit or two for any reason would make people substantially more proactive about getting a potential problem checked out early.
I think if you’re young and healthy and rarely use your healthcare: With a HDHP/HSA you can start to pile up/invest a lot more money in the HSA vs. throwing money away to higher premiums of a plan with a lower deductible and no HSA. As you get older and use healthcare more then this starts to tip into the questionable area of which one is better.

HSA also can fund dental services that are hardly covered by insurance such as adult/children braces, root canals, etc. Another reason for our family to max out/invest the HSA every year.
I agree it's a no-brainer if you are young and healthy to go with the lower-premium, HDHP/HSA plan. But not everyone can choose freely between one plan or another. I work for a small company and we basically have two options: A plan with a $6k family OOP max or a $10k family OOP max. A coworker's wife works for a megacorp and all their plans are high deductible, with the "best" plan having a $4.8k family OOP max. Not necessarily great for a couple in their 50s with three kids or someone with chronic conditions. I love my job but as my wife and I get older and the family gets larger, it kind of sucks I need to start taking into account health insurance in my employment decision. Such is life nowadays, I guess.
Sergio, $4.8k per year for a couple in their 50s, 3 kids and chronic conditions sounds like a great deal, no?
Depends on the premiums - at $400/month it's a great deal. At $1,600/month, I'd say no.
Which were you referring to? I’m covered by work, but what do most retirees pay?
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Re: Making Psychological Shift to High Deductibles, Funded HSA

Post by abuss368 »

We had a high deductible plan with an HSA component over ten years ago and used it for a decade. Your right there is a mental adjustment. I figured it was important to use the HSA and add to it. If we had a good year health wise the result was I typically had an asset (account balance). A higher premium plan was simply an expense.
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Re: Making Psychological Shift to High Deductibles, Funded HSA

Post by OnTrack2020 »

I've said it before, but might as well preach it again. :happy

If you are young and healthy and don't go to the doctor very often and have many years of work ahead of you, then a HDHP is probably for you. You can save more than you will likely spend over the course of many years. So, think it is easier from a psychological standpoint.

For anyone with young kids, I'd be leery, as kids are pretty much always at the doctor while they are young. They catch everything once they hit the preschool years up through elementary school. Plus you, as a parent, are going to pretty much catch it all from them also. Plus, breaks or sprains from simply playing on the playground to sports injuries. If you can't get into the doctor during the week, where do you go? Straight to an urgent care center on the weekend where you are spending more healthcare dollars.

If you are older, like we are, with four kids, I would have never made the switch over to a HDHP. Why? Because one uses more medical care/health care dollars when you are older, and now the doctors think you need to be seen twice a year instead of once a year. Prescription meds are the norm for most people. Surgeries are commonplace. Eyeglasses are needed. More dental work is common. If your medical care costs are low, great, but diseases, disorders, etc. start rearing their ugly heads once you are in your 50s. Because we started an HDHP later (basically a few years ago), we simply will not save enough in it to ever grow.

You haven't mentioned how old you are?

I should add I've put off visiting the doctor for a few things because any office visits after insurance are anywhere from $120-$200 with an HDHP. This is why people put off going to the doctor, and it's not necessarily a good thing.
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