Here is THCB’s first podcast. You can listen to it here by clicking on this link — Eric Novack interview, and telling it to "open" when it asks you. That should make the file play in your MP3 player of choice. But the real idea is to get your iPod aggregator (I use iPodder) to move it to your MP3 player of choice, by aiming at the RSS feed here. And then get out of the house and still listen.
All I did was record an interview over Skype using Total Recorder and then had it saved as an MP3 file. Once I saved that up to my hosting service (easy) I figured out how to put it in my RSS feed (much harder, or at least harder finding out how to). You can either point your podcast aggregator (like iPodder) at http://matthewholt.typepad.com/the_health_care_blog/rss.xml or you can get it by looking at the "Subscribe to my podcast" line next to the site feeds in the right sidebar.
Take a listen, let me know what you think.
Matthew you wrote, “So Ron, why haven’t you sold me a $2600 deductible plan with NO extra co-insurance after the deductible that costs less than $200 a month?”
Ha ha you are right Matthew. I went to ehealthinsurance and used a zip code of a client of mine who has moved to CA, the 93650 zip code. I also think you are 42 years old and don’t smoke. 15 HSA programs came up and we were the only one with a $2,600 deductible that pays 100%. Golden Rule is not in CA and all those local CA insurance companies have only one choice, usually with a higher out of pocket than the maximum HSA deposit, bunch of rookie local yokals.
ehealthinsurance’s quote for our $2,600 HSA deductible that pays 100% for you was $196.56. You can look for yourself. When I did this quote using my current sofware I got a lower price of $162.22. rdg and I think ehealthinsurance quotes might be rigged in such a way as to funnel clients into certain insurance companies for some reason.
One problem in CA it looks like is we are the only insurance company with an out-of-pocket of only $2,600. Maybe I should focus advertising in CA where there is no competition.
This is a Fresno zip code and don’t you live in San Fran Matt? With the reputation of that area and the possibility of very expensive illnesses, your home zip code is probably more, or at least it should be.
Is your macro question: If people pay for their deductible health insurance expenses with tax free HSA funds instead of after tax dollars, will the poor be shoved through a crack?
If this is what you mean, the answer is NO.
So Ron, why haven’t you sold me a $2600 deductible plan with NO extra co-insurance after the deductible that costs less than $200 a month?
And yes I understand that HSAs are a good deal tax wise for most indivduals. But if they have a plan like mine — from that weird company Blue Shield of California, which looks like most high deducitible plans AND they use it because of catastophic costs, they do pay extra out of pocket. And every high-deductible plan I have ever had OR ever had quoted to me looks like that (check your friens site at eHealthinsurance.com). So it is NOT true to say that all your health spending is tax free.
And whatever happened to your macro level answer? I’m waiting!
I love you too Matthew.
The typical HSA for me is $2,600 annual deductible that pays 100% thereafter. But the typical HSA has a lower deductible than that for the country as a whole. Why? Because agents make more when they lower the HSA deductible because the premium goes up. Of course I tell people, “Who would pay extra just to limit the size of their tax dodge?”
You are correct that Federal law allows the max out-of-pocket on HSA insurance at $5,100 if the client chooses that option but very few do yet. I’m sure when the clients have had their HSA for a few years and have a $7,500 HSA balance they may raise their deductible to save premiums at renewal.
It’s pretty odd what your plan says:
// Copayment Maximum for Preferred Provider Services Individual: $3350 View your year-to-date total
Copayment Maximum for Non-Preferred Provider Services Individual: $3350
Copayment Maximum Totals Individual: $3350″//
You have no penalty for going out of network. I have never seen that before. You have an odd bird there Matthew. Federal law doesn’t restrict the amount owed by consumers on out of network charges.
Really Matthew, in the real world people have $1,000 deductibles anyway today and they don’t have HSA qualifying coverage and are paying their out of pocket expenses with after tax dollars. It’s very common to find people over 55 years of age with a $5,000 deductible on non HSA insurance. These people have co-insurance after the deductible which would not be allowed with HSA qualifying coverage. These people, I drop their out of pocket expense when they enroll on HSA insurance. Most of the time I drop their premiums and their out of pocket in that age group plus they now can pay expenses with tax free dollars. It’s the same reason you have an HSA Matthew.
You and I heard about the HSA at the same time, 1993.
You have again not answered the macro question. I dont know how smart your wife is or how much you know, but it has NOTHING to do with your individual clients.
On the micro question, to your answer I must just say “Bull-Shit”
From this website from MedAccess — unless they’ve got it wrong, http://www.medplanaccess.com/hsa/hdhp_benefits.htm
“Benefits under a Qualified
High-Deductible Health Plan (HDHP)–
Before you can establish a Health Savings Account (HSA) and make tax-advantaged HSA contributions, you must be enrolled in a qualified High-Deductible Health Plan (HDHP).
For single person coverage, a qualified High-Deductible Health Plan (HDHP) must have an annual deductible of at least $1000 and annual out-of-pocket expenses (deductibles, co-payments and other amounts, but not premiums) cannot exceed $5100.”
So in other words you can contribute a maximum of $2600 into your HSA and at the same time have a maximum out of pocket of $5100.
So if you need catastrophic care under that scenario, you will be out another $2500 POST-tax in ADDITION to what you have in your HSA. The typical deductible is way less than the typical out of pocket max on almost any high-deductible plan, and it’s almost always the max out of pocket that matters for anyone actually using their plan (as 1 day in a hospital will blow through the maximum OOP)
For example, this is lifted straight off my health plans website for my plan
“Annual Copayment Maximum
The most you have to pay for applicable covered services
Description Amount Actions
Copayment Maximum for Preferred Provider Services Individual: $3350 View your year-to-date total
Copayment Maximum for Non-Preferred Provider Services Individual: $3350
Copayment Maximum Totals Individual: $3350”
This is clearly an HSA-qualified plan and unless where you went to school was very different to where I did, $2600 does not exceed $3350!
Actually the simple thing to do is to link the HSA amount to the total out of pocket NOT the deductible, but the right wing goofballs havent done that yet. So as of now — you are wrong!
But I still love you anyway!
//saying that rdg is wealthy?//
Nope – just saying if he can afford $160/month, he’s more wealthy than the people I’m sticking up for: the people who will fall through the cracks.
rdg had the choice of paying $800 a month for COBRA or $160 a month for HSA family insurance and he picked the HSA. Are you saying that rdg is wealthy?
I think the COBRA insurance company is wealthy and rdg is a citizen reducing his cost so he will be able to purchase food for his family. Also, over 70% of HSAs are over 40 years old.
//there is disinformation about the HSA and you know it’s wrong, you should correct these people.//
LOL – honestly, everytime I think I understand HSAs, it turns out I was wrong. Therefore, I’m in no position to correct any disinformation.
However, I’m still under the impression that this is a gift money to the young, healthy, and relatively affluent. This is an interest group, and in the U.S. a large interest group always trumps the universal good. As a person of lower class origins, who didn’t manage to overcome the hurdles I faced in life, I tend to put my voice behind universal ideas that will protect the people on the fringes, in the margins, at the bottom of the heap, the ultimately vulnerable, etc. I can speak personally to the truth that this condition may have nothing to do with effort, education, or moral character: some people just don’t have anything to negotiate with. I firmly believe society should be seeking their contribution instead of trying to grind them into dust (while verbally castigating them for some moral or attitudinal short-coming). The problem I have with HSAs is that they will prevail at the expense of the people I want to protect.
This is why I like you.
//less left in their HSA (i.e. zero)//
“Hmmm. This makes me wonder whether people will redirect the discretionary part of their income that previously went into an IRA into an HSA, thinking that this will double as their retirement plan. Any money spent on health care won’t be garnering interest, a loss that compounds over time.”
I enroll all types of people but the average age is about 50. Some say, “Smart people have 401ks and IRAs but we use the state lottery as we plan for retirement.” These people save nothing. Then there are some couples who only have $3,000 a year they can save in their IRA. This is what I tell them. If you think I’m wrong please correct me:
“Some couples only have $3,000 a year that they can afford to save in their IRAs. I encourage them to maximise their HSA deposit each year before they make their IRA deposits. HSA funds may be used for any reason after the age of 65, you can buy a boat, by paying ordinary income tax, exactly like an IRA. So at worst, HSA funds are taxed like an IRA in retirement. But I also understand that these people will be much smarter at 65 years of age about the rising cost of retirement health care expenses. I don’t care if they have a $100,000 HSA balance, it’s not enough for 30 years of retirement health care expense in the future. So I doubt if you will be using HSA funds to purchase boats. You will probably leave HSA funds dedicated to retirement health care expenses and then the HSA funds are never taxed. Of course HSA funds that are never taxed will last longer in retirement.
So I encourage people to maximise their HSA deposit first, then I also suggest to maximise their IRA deposits too if they can. The cost of retirement will probably be excessive and we have to save for the future now.”
You are also correct gadfly that spent HSA funds do not get interest and compound over time. Prospects have said from the beginning to me, “Who would take funds out of an account that is growing tax free, even if you could?” Now I say, “Good point. Many people maximise their HSA, then they don’t take any money out of their HSA and just let the funds continue to grow, tax free, and try and get the largest HSA balance as they can at 65 years of age, like me. However, I do keep the reciepts of medical, vision and dental expenses in case I need to use some of the money later, tax free. Like this Christmas, if I needed to withdraw $1,000 to purchase some gifts, I could. HSAs have the freedom to leave your money in the account, and compound tax free, and then withdraw funds in a different tax year.” (I might add for you gadfly, this would be illgal with an HRA)
I know you and I have common ground gadfly. I know you think that Donald Trump shouldn’t be able to FIRE a worker, at his whim, and the citizen then lose their health insurance, after a short COBRA, when they are currently diagnosed and are uninsurable. Heck, if Donald Trump figured out an employee had a sick child, and making the cost of his group health insurance to increase, I have the feeling that employee would be fired in the blink of an eye. If Donald Trump wouldn’t fire a sick employee because it is costing him a dime, some employers would.
I hope that if I’m busy and can’t correct some out and out lie about the HSA, you would. For your information most people who say they support the HSA usually don’t. Like Newt Gingrich for example. Newt says nice things about the HSA then switches to “Consumer Directed Health Plans” (CDHP) and then hoses everbody with an HRA exactly like he did with Dr. Eric Novack, the jerk (Newt). Newt just can’t figure out how to make any money with the HSA, like most people. Here is a link to Newt’s CDHP:
You will have to download the file. Notice how he is an HRA guy and not an HSA guy. He told Dr. Novack, “Get an HRA because HSAs are too risky.” I think he means it’s risky for him because he dosn’t know all the rules and always makes mistakes and HRAs is where the big money is for Newt.
I emailed Newt’s people and asked them how HSAs are more risky than HRAs when HRA balances the workers lose at retirement and HSA balances the workers can keep in retirement. I don’t expect them to respond to me.
I have never charged a client for an MSA or an HSA. That way I can say, “To this day I’ve never made a penny on an HSA.” I know you hate that. Here is the new HSA I’ve been enrolling people in because I have figured out how to make it free. Also, the interest rate is now 6%, with no fees and a mutual fund option. At least you might want to look at it. I know it says there is an annual fee but there is a way to make it free. (So the interest rate is wrong and the fees are wrong but some agency put this up a while back, they should correct it)
When I’m not here and there is disinformation about the HSA and you know it’s wrong, you should correct these people. You don’t sound like a salesperson. I will admit that there will be a large variety of new HSA qualifying insurance plans in the future (bunch of newbies) where the coverage will not be as good as the first HSA plans are. A good example of that is Golden Rule’s HSA Saver plan and their covered expenses on their qualifying health insurance.
You also say, “If HSA-backers can convince enough people that they will get tax-free money, then the voters will be there to back it.”
That’s funny. Most Republicans running for office in ’06 are so afraid of the HSA that they won’t list their support on their web-sites. Like in Michigan for example. Not one person running for Governor will support HSAs on their web-site or mention it in their speeches. Same with Harris running for Senate in Florida, she’s a hoot. Verbally she says she will run against Nelson (Nelson is the x-insurance commissioner) on health care. She can’t even spell HSA and doesn’t have a clue. Do you think Matthew would vote for her?
//less left in their HSA (i.e. zero)//
Hmmm. This makes me wonder whether people will redirect the discretionary part of their income that previously went into an IRA into an HSA, thinking that this will double as their retirement plan. Any money spent on health care won’t be garnering interest, a loss that compounds over time.
//what passes for policy in this country//
ITA, it will be a cold day in hell before anyone in this country cares about the macro level. People just want the best deal for themselves and to make sure no one else is getting a free ride at their expense. If HSA-backers can convince enough people that they will get tax-free money, then the voters will be there to back it.
//Gadfly, why do you think I’m a salesman?/
Besides the fact you talk about selling HSAs and sprinkle your arguments with jingles, all you talk about is the positive points of HSAs. Everything has a drawbacks, so omitting the drawbacks makes you sound biased. It’s impossible for me to tell what’s information and what’s rhetoric, so I take the safe route and assume everything you say is rhetoric. If you didn’t sound like a salesman, then I would probably trust you up front (which would be my cognitive error, but most people share this folly…), and I wouldn’t look for outside verification.
Matthew you wrote, “1/ The typical High Deductible plan has a higher deductible and total out of pocket to the person who uses it, than is allowed to be put into their HSA. So a sick person who maxes out their deductible will by definition spend more out of pocket beyond what they put in their HSA and have less left in their HSA (i.e. zero) than a healthy person”
Sorry Matthew you are wrong again on HSAs. The typical deductible on single HSA insurance is not above the amount that may go into the HSA. For example, most HSA single deductibles are $2,600 per year or less. With a $2,600 deductible the maximum that may be deposited is equal to the deductible. With a smaller deductible the HSA deposit is limited to the amount of the deductible.
With family HSA coverage the deductibles are exactly double and so is the amount that may be deposited into their HSA. I thought everyone knew this.
An exception would be for those over the age of 55. These people may make an additional deposit of $600 this year. This means that someone over the age of 55 with a $2,600 deductible may deposit $2,600 plus $600 or a total of $3,200 in their HSA.
One way to use an HSA is not to put anything in the HSA during the year. At the end of the year if the person has spent $1,000 on qualifying medical expenses they may deposit $1,000 in their HSA and get their income tax reduction and then take the money back out of their HSA.
That’s why I worry Matthew if you ask an HSA question to someone on a podcast they won’t have a clue on HSA rules so they will let your biased remarks go unchallenged.
Then your macro scale question that nobody can answer is even worse. First of all, it means nothing. When I enroll a 55 year old person in an HSA and they currently have health insurance they will have at least a $1,000 deductible now with 20% co-insurance to the next $5,000 or a total Out-Of-Pocket (OOP) of $2,000 which they pay with after tax dollars. I always suggest that they get the $2,600 HSA deductible that pays 100%. Then I encourage them to maximise their HSA deposit, in this case $3,200 a year. This client will actually increase their amount they are spending on current and future health care expenses. There is not a finite amount of money that can be contributed to current and future health care expenses.
Another example is a person without current health insurance. I enroll them and now they are spending more on health care than before even without an HSA deposit. With an HSA deposit, which I encourage even though I never make a dime on it, they spend much more than before I arrive on current and future health care expenses.
My wife just walked in the room and she is very knowledgeable on HSAs. She had over 5% market share of all MSAs in the country during the “Original Pilot Test”. She is the General Agent (GA) or my boss. I made her read these 2 comments by Matthew. She said, “Wow, this guy is really pulling at straws to find something negative to say about the HSA.”
Recently it has been reported that a 50 year old person will need $200,000 at the age of 65 for health care expenses if they live to 85 years of age. If they live longer than 85 years of age they will need more. This is for one person, if they are married they will need double this amount. Everybody is starting to understand that saving for retirement health care is a very important issue. Come on Matthew you don’t want to be the very last person in America to figure this out. Afterall, you are the one who claims to be a futurist.
I will admit that the right-wing-goofballs who say they support the HSA are too boring and ill informed for me to even read their stuff. Matthew is at least entertaining. I predict that Matthew will jump on board the HSA bandwagon in the very near future.
Gadfly, why do you think I’m a salesman?
There are 2 issues
1/ The typical High Deductible plan has a higher deductible and total out of pocket to the person who uses it, than is allowed to be put into their HSA. So a sick person who maxes out their deductible will by definition spend more out of pocket beyond what they put in their HSA and have less left in their HSA (i.e. zero) than a healthy person
2/ On a macro scale, if everyone in the country has a high deductible plan that costs $100 a month, and puts $200 a month in a personal account, and that total ($3600 a year) is (after being multiplied out by the population) ALL that is spent on health care — i.e. that;s the total “pool”…because 80% of the cost goes on 20% of the people by simple maths there will not be enough money left in the pool to take care of everyone. That is the issue which Ron and every other backer of HSAs/high deductible plans has failed to deal with. Until they do, they will continue to lose the intellectual argument.
But as we know that has nothing to do with how what passes for policy in this country becomes law.
//maximum this guy can owe is $2,600 a year//
I’m the first to admit that I may have misunderstood the previous criticisms offered against HSAs, which seemed to say patients would be on the hook for large charges and out of luck on RX. Anyone on the HSA-critical side care to clarify for me?
Sorry, Ron, I don’t trust your account because you come across like a sales pitch.
you wrote, “No one (well maybe apart from Gadlfy) is disputing that 65$ a month catastrophic coverage with a $2-3,000 max out of pocket is probably OK for this young guy. The problem is that if everyone in America gets one of those plans, there will not be enough money in the insurance pool to deal with care for the people who need it.”
Where did you get that information or is it just your opinion?
I said the podcast is great because if you could hear the tenure of this guys voice it would be really informative. People can understand more when they hear “Tone Of Voice”. It’s a way that we all process information.
So keep up the good work with your podcast audio.
You wrote, “The scary thing is that this guy probably will go with what’s cheapest on the surface – the HSA. Thus he will become one of the government’s we-don’t-need-universal-coverage statistic, and he will only find out the drawbacks of having an HSA when he gets hit by a random bicycle messenger on the street. Just the X-Rays take his entire contribution the the HSA, and then he discovers he’s on the hook for $10,000 before the insurance starts kicking in, and the pain-killers aren’t covered at all…”
That’s illegal. The maximum this guy can owe is $2,600 a year with the $65 a month HSA coverage, which Rx is a covered expense.
I told him even if he had a head full of brain tumors the Comprehensive Health Insurance Pool (CHIP), with no underwriting, in Nebraska would be cheaper than $500 a month.
What is sad is he is doing the hiring and doesn’t have a clue about his company’s insurance plan or how much COBRA would cost. And he is the one explaining the coverage to new employees.
When you get employer insurance you have some non-licensed fruitcake explaining the benefits to uninformed employees.
Hey guys these aren’t comments about the podcast! (Well not the last two)
No one (well maybe apart from Gadlfy) is disputing that 65$ a month catastrophic coverage with a $2-3,000 max out of pocket is probably OK for this young guy. The problem is that if everyone in America gets one of those plans, there will not be enough money in the insurance pool to deal with care for the people who need it.
I agree the most scary thing is that this guy doesn’t know enough about health insurance to make a reasonable decision. Heck, after months of reading this blog, I still don’t think I could make a reasonable decision.
The scary thing is that this guy probably will go with what’s cheapest on the surface – the HSA. Thus he will become one of the government’s we-don’t-need-universal-coverage statistic, and he will only find out the drawbacks of having an HSA when he gets hit by a random bicycle messenger on the street. Just the X-Rays take his entire contribution the the HSA, and then he discovers he’s on the hook for $10,000 before the insurance starts kicking in, and the pain-killers aren’t covered at all…
I wish I would have taped the conversation I just had. USA Today has an article today that is pure PROPAGANDA about health insurance written by Jim Hopkins, what a loser. He was reporting about the high cost of individual health insurance. Hopkins reported about Andy Ringsmuth and wrote:
“Ringsmuth, 26, wants to start a consumer tech service company that would compete with services like Best Buy’s “Geek Squad.” His would set up computers and wireless networks in the Lincoln area. Ringsmuth figures start-up costs would range from $5,000 to $10,000.
But he worries about giving up News Link’s generous health benefits, fully paid by the company. Ringsmuth figures he’d spend $400 to $500 monthly for comparable benefits on his own. “Tough,” he says.
Ringsmuth is young, single, doesn’t smoke and rarely sees a doctor. Still, he says, “You never know when something will come up.”
XXXX This is crazy XXXX
I just got off the phone with Andy and told him that HSA coverage is only $65 a month. Andy said, “Oh, that’s a lot cheaper.” I asked him, “Who told you it would be $400 to $500 a month?” He said, “I can’t remember and I don’t remember saying that. I was going to call the guy and ask him why he said that, it surprised me.” I asked Andy to give me the number to Hopkins and he said, “I have it at my home.” I gave him a toll free number to call me so I can ask Hopkins why he is speading this misinformation. He said he would call me with Hopkins number.
I also asked Andy, who does the hiring, how much his COBRA would be if he quit. Andy said, “I don’t know.” I said, “If you got cancer and couldn’t work you would go to a short COBRA and your insurance would terminate, isn’t that true?” Andy said, “I believe that’s how it works.” I said, “So that’s a lot worse than the $65 a month insurance that you can keep if you get too sick to work, right?” He said, “It sounds like it.”
I asked, “Why did Hopkins interview you when you don’t know anything about health insurance?” He said, “I don’t know.”
It would have been interesting for everybody to hear the tenure of Andy’s voice though. I should tape Hopkin’s voice if I can get ahold of him because that would really be a hoot.
USA Today Propaganda for you:
This is a good idea.
Matthew sounds a lot more British when you hear him.
I have never heard of a tax credit of $3,000 a person, per year, before Eric said it. The President wants a $3,000 tax credit for a family of four, but only if they are poor. Either way would distroy the group health insurance companies in the blink of an eye.
Matthew and Eric never said Health Savings Account or HSAs one time so I was a little disappointed.
I do like this audio feature though.
You are on the cutting edge Matthew.