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POLICY: HSAs for Medicaid–cost-shifting to the poor by Theora Jones

Policy analyst Theora Jones has been a little quiet at THCB lately, but the news that South Carolina is going to be giving all its Medicaid recipients HSAs got her a little riled up.

THCB recently pointed out that if the government could risk-adjust perfectly, we’d have no need for insurance companies, (Well I didn’t quite say that but close enough, MH) which is why this recent story from SC is so confusing–call me crazy, but I don’t think they’re out to replace the insurance industry.

So golly gee, what’s behind this? Does SC they think the private sector can control costs better? There’s no evidence of that. Do they think that people on Medicaid will get better care? Well, they’re not proposing any case management or disease management or quality measures, so…no. Wait, I think I’ve found the nut graph:

"South Carolina would cap how much it will spend on a recipient, and if health care costs more than the account will pay for, then the low-income people would have to make up the difference themselves or go without."

Ah, rationing. That’s neither new nor radical.

Please note that in order to qualify for Medicaid (2003 numbers), a mom in a family of three has to earn less than $7,510 a year. Disabled and blind folks have to earn less than $12,120 ($9k if they’re single). The old folks can pull down a cool $16,362, and kids can be covered even if their family of 3 is rolling in cash–up to $22,890! With disposable income like this, I’m SURE they’ll be able to make up the difference on that triple heart bypass. Or the asthma medication.

Legislation like this confirms my greatest fears–that HSAs are going to have a worse impact on the health care system than managed care ever did. Their effect on the health care system will be more pernicious and long-lasting–they will exacerbate the fragmentation and the injustices in the current system, and they will stymie the effects of reformers who are trying to achieve clinically focused quality improvements, greater access, and efficient financing.

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33 replies »

  1. Medical providers levy higher charges on private insurers to compensate for low Medicare and Medicaid reimbursement rates, adding a cost burden of more than $900 per private family plan per year.
    ========================================================
    Victor
    South Carolina Alcohol Addiction Treatment

  2. I would ask Ron: how much of the HSA costs are going to offset salesmen salaries and marketing costs? That’s patient money that isn’t going to patient care.

  3. Children, children…please play nice together. And please play somewhere other than the living room so that the adults can have a discussion about important things.
    Thank you

  4. dan,
    You wrote, “Still no answer to the main question – because Ron doesn’t have one: how do HSA’s cover people with preexisting conditions? Medicaid covers that now.”
    Come on dan I answered that question with, “The state of Florida just passed making HSAs an option for state employees, just like the Federal government did last year, and there is no medical underwritting, sorry.”
    If you are asking if medically underwritten individual health insurance will insure people who have uninsurable conditions, the answer is no. But this is a good thing dan. If this is what you mean you should not say HSAs won’t cover uninsurable people because that’s not true. There are no medical questions when you open an HSA. Group employee health plans may have HSA qualifying coverage without any medical questions too. High Rish Pools for unsinsurable individuals may have HSA qualifying coverage as well.
    When you say that HSAs will not cover uninsurable people or certain medical conditions it’s just not true. I can’t guess what you think you are trying to say.
    You are probably upset that uninsurable people can’t get coverage for the same low price that healthy people can but you just have not thought it through yet. That’s why I wonder why you have a health care blog with such limited knowledge.
    So please quit confusing HSAs with different forms of insurance, ok. At least quit saying that I refuse to answer your questions when I do. You could at least say, “Ron refuses to answer the question I was meaning to ask but didn’t.”

  5. er…
    still not answering the question eh? What does your great HSA insurance do for the people who currently, on medicaid get coverage but who you REFUSE to sell insurance to because they’re sick??
    You’re proposing HSA as a replacement for Medicaid. Lots of ppl on Medicaid are sick or disabled. So how do you cover these people? And why do you keep refusing to answer the question?

  6. Sorry Dan,
    Goldenrulehealth.com link didn’t work above. But just go there and look at their covered expenses if you are going to make wild accusations, you should know what you are talking about.

  7. dan,
    Go look at Blue Cross of MN HSA plan (Your company), it covers these things you say HSAs won’t cover.
    The state of Florida just passed making HSAs an option for state employees, just like the Federal government did last year, and there is no medical underwritting, sorry.
    Plus, every HSA plan in America pays 100% of covered expenses after the consumers’ choice of maximum Out-Of-Pocket, it’s Federal law.
    I notice that your insurance company, Blue Cross of MN, is selling short term health insurance. Right on their web-site they say that consumers can only have the coverage for 365 out of any 555 day period. What is Blue Cross doing with people with brain tumors when they hit their 365th day? I shudder to think about it.
    Dan just go to goldenrulehealth.com and check out their covered expenses on their HSA 100 plan verses their HSA Saver plan that you talk about. You can plainly see that doctor visits and Rx are covered expenses on their HSA 100 plan.
    Here is what Blue Cross of MN says about their HSA plan:
    What kind of health care coverage will I have?
    “You’ll have the type of coverage you’ve come to know and expect. With familiar features like full preventive care coverage, and coverage for office visits, lab work and x-rays, surgery, hospital stays, and prescription drugs.”
    Compare Golden Rule HSA Plans here:
    https://www.goldenrulehealth.com/CommonCode/Brochures/35753l05.shtml
    See why I wonder why you have a blog on health care with such limited knowledge?

  8. Still no answer to the main question – because Ron doesn’t have one: how do HSA’s cover people with preexisting conditions? Medicaid covers that now.
    Ron, how many of your policies to you sell to kids who have had heart surgery? Or do you tell them they’re screwed? Is that what your friend Jeb is going to tell them too?
    And I have told you over and over what policy I have and how much it costs – I posted it just earlier today. It’s not employer paid for, but it is a group plan. I pay for it myself. Like I said, it’s $4600 / yr for family coverage. BCBS PPO. WAY cheaper than the $6700 you want Jeb to pay TO YOU (yes, Ron sells HSAs) to cover people. Oh, and it’s REAL insurance – actually covers DOCTOR VISITS.
    Ron, you make all these claims and then don’t back them up. Show us the HSA plan you’re claiming pays “100% of covered expenses” and then show us what the “covered expenses” are. I’ve already posted how “covered expenses” don’t include DOCTOR VISITS or MATERNITY or PRESCRIPTIONS or XRAYS in the plans I found. AND I provided a source. You provide NO DETAILS of “covered expenses” for the plans you sell, and yet claim they’re a good deal.
    Oh, and they still don’t cover sick people. How do you cover the sick people with Jeb’s plan, Ron? Throw ’em in the street? You sure won’t sell them insurance.

  9. Spike, the state makes an HSA deposit into the Medicaid person’s HSA.
    Plus, the insurance and the HSA are two different things. Where you come up with a 75% refund of premiums means nothing, trust me.

  10. as an addendum to above: The fourth way for Medicaid plan to reduce costs is to shift more expenses to the beneficiary, which HSAs most certainly WILL do.

  11. I’m familiar with how insurance works. The point is that if you don’t get into a car accident, the auto insurance company doesn’t then refund 75% of your premiums. If they did, they’d go out of business, just like HSAs will (unless they severely restrict coverage the way Dan’s post suggests).
    It’s simple, the only ways to reduce costs are to reduce utilization, reduce administrative overhead/insurance profit, or reduce the allowables to providers. HSAs do none of these and therefore will not reduce costs.

  12. Spike,
    You write, “That means that if such a person got bone cancer, the $2000 premium was paid against the $500,000 costs that later arrive. So that person cost the state $507,000. If you want to say “well, the insurance company is the one losing the $500,000″. Fine, but then what insurance company in their right mind would sponsor this plan?”
    That’s the way all insurance works spike. You pay for auto insurance then if you cause a $500,000 accident the insurance company pays the bills less your deductible.
    The rest of your thoughts are so confused that I’m not going to spend the time on them to answer.

  13. Dan,
    You wrote: “4. Your numbers are changing. First you say “The average cost for group health employee plans is over $10,000 a year and Medicaid costs even more”. Now you say that IN New York, the cost is $10,000 for Medicaid (not “even more”), but in Florida, which is the only place you have an insurance quote for, you now say the cost is “$6,700”. How is that “even more” than $10,000?”
    You are correct my numbers did change, they went down for HSA insurance. At the top of this thread I said the example family in Lansing was $2,000 per year. Then I said the exact cost of $1,961.88.
    You are confusing the numbers, single and family coverage. I said that the average premium for “FAMILY” coverage on a group health employee plan is over $10,000 per year. Then I said the New York Times is reporting that Medicaid in New York costs over $10,000 per year per INDIVIDUAL. I should have said $10,600 per year PER INDIVIDUAL. Does that make you happy?
    Your link did not work for me so please just tell us the cost of your wife’s plan which includes your child and if she gets it through an employer.
    And Dan, the florida cost for Medicaid is $6,700 PER INDIVIDUAL. For a family of 4 it would be MORE. And I was using an example HSA in Lansing, MI not Florida.
    And Dan, I read at your site the New York Time’s article about how HSAs are a rip off because some banks charge $2 or $3 dollars a month service charge. The Times forgot to be fair and balanced and didn’t report that our HSA is FREE and is paying 6% interest.
    You said that you would sell our insurance for $8,000 a year then pay the deductible and pocket the difference, that’s goofy and illegal.
    You are correct that Golden Rule’s HSA Saver has more uncovered expenses than most HSA plans that have been sold to date. That’s why I never sell that plan. But I could also point out some pretty nasty traditional Blue Cross plans across America that have similar exclusions. Like no office visits for or Rx for example. But unlike you, I don’t say all Blue Cross plans are like that, geeze.
    I have linked covered expenses and exclusions before and got in big trouble here because Abby and Gadfly says I can’t do that. I’ve got a few more rules that nobody else has to comply with here.

  14. OK I’ll try to whittle this down
    Ron,
    1. Calm down. I realize you sell HSA-eligible insurance plans, and are obviously a big fan of them. I’m not trying to knock them down. I think high deductible insurance is a good choice for a lot of people, and it’s certainly better than nothing.
    2. I have previously answered your questions about my child’s insurance, and you responded to the post so I know you read it. (here: http://matthewholt.typepad.com/the_health_care_blog/2005/08/physicians_how_.html)
    3. You have clarified that you are talking about ONE specific HSA-eligible plan in Florida, with a $5200 or $3200 deductible. Fine – you didn’t say that before. That’s a good benchmark.
    4. Your numbers are changing. First you say “The average cost for group health employee plans is over $10,000 a year and Medicaid costs even more”. Now you say that IN New York, the cost is $10,000 for Medicaid (not “even more”), but in Florida, which is the only place you have an insurance quote for, you now say the cost is “$6,700”. How is that “even more” than $10,000? Moreover, these are unattributed quotes to “newspapers”. I’ve provided URLs for my numbers, and they’re from government sites. Where’s your cite? My BlueCross PPO costs $4,600 for my child and wife (excluding me). It covers ALL of the things not covered by the HSA insurance (listed below). So why not just have the state buy everyone a BlueCross PPO? It’s way cheaper than your plan – and it’s real insurance.
    5. You repeatedly claim that HSA-eligible insurance pays “100%” of “covered” costs. Well, a quick search for “HSA eligble” plans on ehealthinsurance.com will show that many of these plans don’t even pay for OFFICE VISITS! In addition, if you click on “benefit details” you’ll find other things not covered. Here’s a list of things NOT covered on a “Golden Rule HSA Saver” plan with $5250 family deductible:
    – office visits
    – prescription drugs
    – x-rays are NOT covered unless right after a surgery
    – MATERNITY!
    – ER visits are limited to $250/yr.
    – Well baby care
    – infertility
    – mental health
    – physical therapy
    – chiropractic
    – accupuncture
    So, yes, as long as you don’t go to the doctor or have a baby or need the ER or an x-ray, these are awesome plans.
    If you sell a better plan, please provide a URL to the benefit details and exclusions.

  15. “Spike if a person gets bone cancer, like one of my current HSA clients, after the deductible the insurance pays 100% of covered charges. I bet his costs will hit $500,000. The money above the deductible is paid by the insurance company.”
    OK. So when you run through all your math, you say “Medicaid costs New Yorkers 10K per family. HSAs cost 7K.” Well, that 10K per family includes the $500,000 charges that occasionally come up. So, if a person is covered by an HSA the state spends $2000 on insurance and $5000 on deductible, right? That means that if such a person got bone cancer, the $2000 premium was paid against the $500,000 costs that later arrive. So that person cost the state $507,000. If you want to say “well, the insurance company is the one losing the $500,000”. Fine, but then what insurance company in their right mind would sponsor this plan?
    In cases where Medicaid is paying a premium for the child to a managed care plan, the managed care plan loses with HSAs. In the case where Medicaid pays fee-for-service, Medicaid loses big time. Allowing people to take their money out of the system means the system loses money. You can say “well, when people control their own money, they’ll manage their own care, keeping costs down.” But no incentive plan I’m aware of can prevent people from getting bone cancer.

  16. Reporter Learns A Lesson On HSAs
    This article is really funny. The reporter bad mouthed HSAs and boy did he learn a thing or two in Maine. He reported:
    “August 18, 2005
    Health Insurance in Maine: Why are our costs higher?
    I got a lot of flak last week with my comments on Health Savings Accounts (HSA). In a recent scenario analysis, I concluded that the cost savings from going to a high deductible health insurance plan (HDHP) from a plan with lower out of pocket costs were little or none, making the HSA/HDHP strategy uneconomical. And with that, I got a lot of opposition. One person indicated that the HDHP saved $2,600 a year, another with a family plan saved $7,200, another $4,800, and an employer indicated that without the HSA/HDHP he would have had to dramatically reduce or totally eliminate coverage for his employees. All of this was solid proof that the HSA/HDHP strategy does work. But there was one underlying theme with each of these comments: All of these individuals lived outside of the state of Maine. Unfortunately the analysis was done with a resident of Maine and with that, the issue.
    The problem is that a free market system for individual health insurance doesn’t exist in Maine. A free market is a business environment that has little artificial restrictions, allowing for market forces to efficiently dictate pricing and stimulates competition. Within the system there is a healthy relationship between financial risk and reward. With insurance; the higher the risk, the higher the premium expected (and the opportunity to not insure the risk if it is not worth taking that risk). When you mess with a free market system, bad things happen. And that’s exactly what Maine’s state government did.
    Back in 1993, the Maine legislature imposed modified community rating and guaranteed issue mandates on the individual insurance market in an effort to increase access to health insurance for the uninsured population. Insurance premiums were not permitted to vary by gender, health status, claims experience, or length of time with coverage. Insurers were permitted to adjust premiums by 20 percent more or less than the community rate for age, occupation, and geographic area, and premiums could be adjusted for smoking and family status. Insurers were required to issue coverage to any applicant who had resided in the state for at least 60 days. What happened? When insurers couldn’t reject or adjust charges for anyone based on certain risk factors, everyone began paying more. To exacerbate things, higher premiums forced healthy individuals to take their chances and drop coverage, while unhealthy individuals stayed. The increased risk made it unprofitable for some insurers and as a result, they stopped doing business in the state. Now, one insurer is a monopoly in the state and health insurance costs are higher than the national average. You can’t blame the insurers or the policy holder’s, this was a natural consequence of an artificial event; over-regulation. These mandates were created with altruistic intentions, but the strategy backfired.
    There is always a need for regulations and safeguards to a certain level, but they shouldn’t interfere with a free market system. And yes, there should be a safety net to provide for those who can not afford health care, but this didn’t happen and I’m not sure that Dirigo Choice is the answer either. But in the real life scenario that I analyzed, when you take on a great amount of additional risk and you are not compensated for it with significantly lower premiums, you know that something is wrong. With that, I think our legislators need to go back to the drawing board.
    Posted by Jeff Bogue

  17. Spike,
    You wrote: “Ron, do you seriously not understand that total medical costs sometimes get higher than the deductible + the premium? That that extra money has to come from somewhere?
    It’s a simple concept, but seriously, I have to ask.”
    Spike if a person gets bone cancer, like one of my current HSA clients, after the deductible the insurance pays 100% of covered charges. I bet his costs will hit $500,000. The money above the deductible is paid by the insurance company.
    I assumed you understood that.

  18. Ron, do you seriously not understand that total medical costs sometimes get higher than the deductible + the premium? That that extra money has to come from somewhere?
    It’s a simple concept, but seriously, I have to ask.

  19. Dan,
    I have already asked you who you have for insurance on your child but you never answer a question. You just throw out your so-called “proven” stuff and then never back it up.

  20. Rick and Dan, let me help you two.
    Dan wrote, “Here are the problems:
    1. HSA-eligible health plans DON’T all pay 100% of costs. In fact, they are allowed to charge the individual up to $10,000 (for a family) in out-of-pocket costs per year. http://www.opm.gov/hsa MAYBE some pay 100% (you may think yours does because you don’t actually use the more expensive care) but those would be more expensive plans. So your proposal would leave these poor people with $5,000 to pay out-of-pocket.”
    You are so wrong Dan. It is correct that consumers may choose an HSA insurance deductible of up to $10,000 (maximum out of pocket for a family). You would be correct if I used a 10K deductible, which I didn’t. Here are the premiums for the example family of 4 in Lansing, MI:
    Deductible Annual Cost
    $3,200 $3,374.64
    $5,200 (X) $1,961.88 (X)
    $10,000 $1,427.04
    So you are wrong saying the family would owe an additional $5,000. Don’t you feel goofy? Rick says you are correct too, figures.
    I could have said that the State should pay the $3,374.64 for the $3,200 Deductible that pays 100% thereafter because it’s even cheaper for the state. $3,374.64 plus $3,200 = $6,574.64.
    Dan spews more by saying this silly stuff: ” why wouldn’t a PRIVATE company do it? Example: I could sell insurance for $8,000/yr. Pay 100% of costs for first $5,000, then buy you a High-deductible plan for the rest at your quoted price of $2,000. I pocket $1,000.
    Nobody is doing that.”
    Ha Ha – great, sell the $3,200 deductible for $8,000 then pay their first $3,200 and then pocket almost $1,500. Of course it would be illegal but Dan has a plan, pathetic.
    Dan then says, ” 2. Medicaid covers things private insurance doesn’t.” Medicaid was paying for Viagra for sex offenders and HSA insurance would not. But Dan, the HSA will still pay for Viagra and Medicaid won’t now by Federal law. So the HSA will pay for things Medicaid won’t.
    Dan continues, “Everyone on medicaid on my state is paid for by a STATE insurance plan that has proven to be at least TWICE as efficient (lower admin costs, etc) than any private plan.” Sure, sure Dan. Tell us which state you live in and Medicaid will not cost less than the above HSA premiums for a family of 4.
    Dan rambles more: ” 4. Your plan would be way less efficient. I don’t know where you pulled that $10,000/yr number for Medicaid from, but MANY studies have shown that Medicaid is cheaper than private insurance.” Here in Florida the newspapers report that Medicaid costs $6,700 per person, per year. The New York Times reported Medicaid in NY costs over $10,000 per person per year.
    Dan finishes with: ” 5. There is no REALISTIC proposal from any government agency to implement your proposal.”
    Dan, Iowa just passed the HSA option as a new choice in Medicaid, sorry. Governor Jeb Bush wants the HSA option in Medicaid in Florida too. And President Bush wants a refundable tax credit for the poor to purchase HSA insurance. So Dan, you are always wrong.
    Dan, I have a question for you that you will never answer but here it is: When poor people in your state get Medicaid insurance and then get diagnosed and are uninsurable, can Medicaid terminate their coverage?
    Here is another question that any of you pro government insurance Liberals can answer but won’t: Does your state terminate poor children off of the Children’s Health Insurance Plan (SCHIP) on their 19th birthday, even if they are uninsurable? (E-mail Matthew he probably knows but will always dodge that question)

  21. Dan,
    Not to nitpick, because you’re right about just about everything. But with regard to Medicaid, every state except New Hampshire, Wyoming, Alaska, and as of a month ago, Illinois, has private payors serving Medicaid. Most often, multiple payors compete for the Medicaid business county-by-county, and it’s usually mandatory. In some states, like Michigan, the whole state is covered with private managed Medicaid, and it’s near-100-percent mandatory to be in a plan. Other states can have as little as 45 percent of the state covered by private managed care plans, and the rest are in a private fee-for-service arrangement. In some states, the Blue Cross plan can be a payor, but they aren’t everywhere.
    On the whole, I believe private, managed Medicaid is a better deal. For one thing, it’s cheaper than fee-for-service. For another, disease management plans are more likely to be offered by a private Medicaid payor. And from that, innovation often springs. Missouri recently did a study that found that private Medicaid managed care had better medical outcomes in certain categories of care than did fee-for-service. It wasn’t a huge difference, maybe 10-20 percent, and in a lot of categories there was no difference. But throw in the lower cost and the greater opportunity, and I just think private, managed Medicaid is a no-brainer.
    Rick

  22. Forgot the most important thing
    Rob,
    Medicaid insures people who CANT GET private health insurance. And that’s a lot of people. Call up ehealthinsurance.com. Tell them you’ve got hypertension. Or have had heart surgery. Or your kid has Down’s syndrome or MS or MD or CP. Tell them you’ve been diagnosed with depression. FOR ANY of these things, ehealthinsurance.com will tell you: You CANNOT get private health insurance. Period. Nobody will sell it to you.
    So Rob, answer this: how does your plan help those people? It doesn’t.
    And by the way, if you mandate insurers to cover these people, your “$7,000/yr” for the policy is going to skyrocket for everyone.
    -d

  23. Rob,
    Your plan sounds fine, with 4 problems. Your plan is:
    “Tell them the state will continue to pay $10,000 a year for over priced dangerous Medicaid and then they are burdened with all those never ending co-pays OR get the security of low cost individual HSA insurance for only $2,000 and the state will deposit $5,000, tax free, in their HSA, with a mutual fund option. ”
    Here are the problems:
    1. HSA-eligible health plans DON’T all pay 100% of costs. In fact, they are allowed to charge the individual up to $10,000 (for a family) in out-of-pocket costs per year. http://www.opm.gov/hsa MAYBE some pay 100% (you may think yours does because you don’t actually use the more expensive care) but those would be more expensive plans. So your proposal would leave these poor people with $5,000 to pay out-of-pocket.
    2. Medicaid covers things private insurance doesn’t. One example is EPSDT services. . These “Early and Periodic Screening, Diagnosis and Treatment” services are required by all other state medicaid plans. They pay for all kinds of things – for kids only – that other insurance doesn’t pay for. Hearing screening. Testing to see if someone’s developmentally disabled. Wheelchairs. Hearing aids. Physical therapy for non-rehabilitative purposes. (PT is usually only covered for “rehabilitation” under insurance policies – only to recover to the point of pre-injury function – not to gain function you never had, as is needed for children with Cerebral Palsy and other physical conditions.) Your plan leaves all these people out.
    3. You seem to confuse “Medicaid” with “Blue Cross”. Medicaid is not, as you say “I think that Theora must work for Blue Cross because she wants all the money going to the Medicaid insurance company instead of our poor broke citizens, it’s sad.” I don’t know what that means. Everyone on medicaid on my state is paid for by a STATE insurance plan that has proven to be at least TWICE as efficient (lower admin costs, etc) than any private plan. There is no private plan involved.
    4. Your plan would be way less efficient. I don’t know where you pulled that $10,000/yr number for Medicaid from, but MANY studies have shown that Medicaid is cheaper than private insurance. http://healthalarm.blogspot.com/2005/08/ssc-medicaid-proposal-just-adding-more.html
    5. There is no REALISTIC proposal from any government agency to implement your proposal. If it truly was cheaper to do this, why wouldn’t a PRIVATE company do it? Example: I could sell insurance for $8,000/yr. Pay 100% of costs for first $5,000, then buy you a High-deductible plan for the rest at your quoted price of $2,000. I pocket $1,000.
    Nobody is doing that. Either every health insurance company is too stupid to see this obvious way to make an extra $1k per family, or there’s something wrong about this plan.
    -dan

  24. Important point: how can people be empowered or responsible with a fixed allocation of funds if they have no way to shop and compare before they go into the doctor’s office? The current medical center model is one where people don’t find out the costs until after the fact. Furthermore, prices may not necessarily go down in response to the free market. The small players might be driven out of business, leaving the big players in more demand. People don’t have much choice when the one cardiac specialist in town says, “I know you’ve got $2000 – hand it all over now!”

  25. In Support of HSAs.
    The average cost for group health employee plans is over $10,000 a year and Medicaid costs even more, it’s pathetic. The low cost of HSA insurance finally makes insurance affordable for many uninsured Americans. HSA health insurance costs only $2,000 a year for a family of four (30 year old couple and 2 children in Lansing, MI). It has been reported that 40% of HSAs had no previous insurance. HSAs make insurance affordable enough for the uninsured to be able to purchase insurance.
    Let’s walk through the math together. If Medicaid citizens were given the choice of HSA insurance in the free and open market, everybody wins except the politically connected insurance companies with government contracts. The state pays the $2,000 a year for the family’s insurance, then deposits $5,000 in the poor family’s HSA, tax free. If the family get’s sick, they have the money to pay the deductible and then the HSA insurance pays 100%, including Rx. Medicaid is to costly for poor people because they have to pay co-pays instead of the HSA insurance and HSA paying 100%. If the family does not get sick, like most families, unused HSA funds are saved, plus tax free interest. The state saves a bunch of money by reducing their $10,000 cost per family, for over-priced Medicaid coverage, down to only $7,000 ($2,000 for insurance and $5,000 for the poor family’s HSA), a savings of 30% per year to the tax payers.
    The only loser is the current insurance companies who are over charging the tax payers for dangerous Medicaid coverage. I think that Theora must work for Blue Cross because she wants all the money going to the Medicaid insurance company instead of our poor broke citizens, it’s sad. Plus, Medicaid is very dangerous for poor people. With individual HSA insurance purchased in the free and open market the insured family cannot be terminated, not so with Medicaid. I know Theora doesn’t care if poor families have the security of insurance that cannot be terminated if they become sick, but I do. Citizens need the security of insurance that can’t be terminated if they become diagnosed with an uninsurable condition.
    Give poor people options and choices. Tell them the state will continue to pay $10,000 a year for over priced dangerous Medicaid and then they are burdened with all those never ending co-pays OR get the security of low cost individual HSA insurance for only $2,000 and the state will deposit $5,000, tax free, in their HSA, with a mutual fund option. This way the state will save a mountain of money for the tax payers, all on an optional basis, it’s sweet.
    Name one Medicaid contractor who has a dependent conversion priviledge for the children of poor people, you can’t. And what parent would put insurance on a child without a dependent conversion privilege if they had 2 brain cells to rub together and get a spark on health insurance? Simply put, Medicaid sucks and put’s citizens in danger.
    I know Theora only looks at this issue from the point of view of the insurance companies with political clout and Medicaid contracts who are over charging the citizens in the name of poor people. I submit that if she did care she would give the poor citizens the option and security of HSA coverage so the tax payers will save a bundle. What harm could a simple little HSA option do?
    Everybody join with me and when the HSA option is available to poor people in all 50 states we can concentrate on the HSA option for those on Medicare and really help the seniors of America too.
    Hey Medicaid people, don’t delay. Get the security and savings of an HSA. If I may be so bold, I further say, get the original HSA from where the palm trees sway.
    Theora, forget about Blue Cross for once in you life and consider what is best for poor people with America’s tax payers’ dollars, have a heart.
    A 30 year old broke couple who spends $1,250 a year on medical needs, out of their HSA, will still have over $300,000 at the age of 65 with just 4% interest. Our HSA is paying 6% interest. These people, with an HSA balance, will be better prepared for 21st Century Medicare.
    Why does Theora want poor families on dangerous over-priced Medicaid insurance without a dependent conversion priviledge for the children?
    Hillary doesn’t like the HSA because it puts too much money in the hands of poor people instead of government contractors, it’s really sad. Now Theora, Matt and Jib are singing Hillary’s tune, get real. Maybe we all should think about what is the best for poor people and the tax payers instead of politically connected insurance companies who are buying off our politicians.

  26. It’s funny how being cost and risk-shifted can be considered “empowering” instead of burdening…

  27. HSA’s the American Way! Do you all remember Dr. Bronner’s soap with thr funny labels? Cleanliness is next to Godliness! I think that Ron should use soap bottes with jingles as a marketing device.

  28. Well said Gadfly!
    Never thought about it before but:
    “Hey, Hey” and “HSA” Do rhyme rather nicely …
    Cmon’ Ron. Give it a try!

  29. The more I read about HSAs, the more they look like gift money for people who are young, relatively healthy, and upper-middleclass. Didn’t get rich by buying stocks or flipping properties? Well, here’s some tax-free interest for you.
    Like the 401k that was intended to tie a larger portion of the population to voting for business interests, the HSA is intended to reduce concern about health care among the most “important” voters. Once more, our elected officials confirm that it’s only the money in-crowd that matters. And because they matter, “entitlements” and “pork” go to the Already Haves instead of the Have Nots.
    Maybe they are hoping the Have Nots will be too preoccupied with their untreated illnesses and injuries (many caused by business exploitation) to be able to fight back? Perhaps poor nutrition and weakened immune systems will invite plague and weed out the burdensome?
    Jingle for Ron:
    The Poor Will Pay For the Rich Man’s HSA!

  30. I will wait and see if anybody will defend the tax free HSA.
    President Bush said, “HSAs have tax free deposits, growth and withdrawals.”
    I would simply point out that money that is never taxed will last longer in retirement. 401k millionaires will feel the pinch of taxation in retirement and it’s going to hurt, really bad.
    Save premium
    Reduce taxes
    Build wealth
    Become EMPOWERED.

  31. While I’m sure that the words “empower” and “responsibility” will be bandied about in the debate over whether this is good or bad, reality is that trying to shift the financial risk for their medical care to the poorest and most vulnerable population in SC defeats the purpose of Medicaid.
    There are other – and better – ways of managing the costs of providing care for this population. This is a misguided cop out… and a step toward unravelling the “obligation” that states have taken on in ensuring that the indigent have care.
    Just a few short years ago (when we weren’t at war, we had a relatively balanced budget, gas was half the price it is today, etc.) weren’t we talking about how to insure more people via Medicaid (but to do it more cost effectively) as a way of reducing the number of uninsured. I guess 9/11 changes that too…

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