posted
I say this as someone generally in favor of increased defense spending: it's strange, in some mysterious way, how Medicare and Medicaid, two of the most efficient, cheapest for the benefit programs the federal government has, are targeted for the chopping block due to supposed waste and corruption when defense, famously* known for boondoggles and unneeded weapons systems and bases that remain open when they're not needed and questionable contracting is sacrosanct by the same people who raise fire and brimstone over Medicare and Medicaid. Almost like there's some b*%#€£it in there somewhere.
*I say famously not because I think it's rampant but just because it's well known.
Posts: 17164 | Registered: Jun 2001
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posted
Most reports that have analyzed Ryan's plan note that even if they put Medicare up against private insurance companies, it's incredibly unlikely that private insurance would be able to be competitive as far as premiums and quality go. They simply can't match Medicare's efficiency and value.
That's not to say that it can't be fixed - it can. I think an NHS-style reform would dramatically reduce costs at the care level, rather than the spending level.
Posts: 21898 | Registered: Nov 2004
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posted
I would like to point out that some people do shop around for healthcare now, but it is extremely difficult! Even finding out which pharmacy will carry your medication at the lowest price isn't exactly easy - and since I pay alot for medication I do shop around. It can be a $20 difference on some of them.
I have yet to go into a doctor's offices that has a menu of services and pricing up on the wall though. "Yes doc, today I'll have the full gyno exam, but only a small side of vaccinations please! Oh, and don't take my blood pressure, I can do it at home for half the price."
I mean, honestly, how would such a program even work? Not to mention the problem with emergency care. Unless we want to change our laws to allow people to die if they can't approve their medical care, how to we allow unconscious people to "shop"?
Posts: 1321 | Registered: Jun 2006
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posted
I'm all for price controls for essential services.
Do what the NHS does. A la carte and optional service can be priced by the private market. Essential services are tested for the most effective and efficient form of doing it, and a team of doctors and wonks decide what works and what doesn't to say what's covered, then they set the price. Works great for them.
Posts: 21898 | Registered: Nov 2004
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posted
I'm hearing a lot of acronyms bandied about with the letter 'S' in them. Well I think we all know that stands for SOCIALISM!!!!!!!
Posts: 17164 | Registered: Jun 2001
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quote: As far as Medicare, honestly I would prefer an HSA type plan that I could invest in each pay period to help me with medical costs later in life.
What about the guy who pumps your gas? Do you think he could ever put enough money in an HSA to pay for chemo?
quote:Right now due to government regulation the only way I can contribute to an HSA if I have a high deductible plan.
This is a funny way to put it. Of course they "regulate" the circumstances under which you can put your income away tax-free.
quote: I would like to point out too that Ryna's medicare plan is extremely close to what Congress has currently.
Since the members of Congress are basically all rich, I'm not surprised a system like that would work fine for them. But I'd like to hear more about the similarities. Do you have a link?
Posts: 4600 | Registered: Mar 2000
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quote: Right now due to government regulation the only way I can contribute to an HSA if I have a high deductible plan.
This is a funny way to put it. Of course they "regulate" the circumstances under which you can put your income away tax-free.
It is not a funny way to put it. You are only thinking in the short term, not long term.
Let's look at it this way. If I was able to put $100 a paycheck into a Health Savings Account that I can use later in life, the government loses out on $1.45 in Medicare taxes. A DOLLAR FORTY FIVE. I still pay Medicare taxes on the rest of my disposable income. Let's assume that the Social Security tax goes back up to 6.2% and I pay a FIT rate of 15%. So the government loses out on a total of $22.60 per pay period, or $45.20 a month. That is a total of $542.40 per year for all three taxes combined.
Let's say I start contributing at 22 and retire at 65. That is a total net loss of $23,323.20 over the course of my career for the government. Now, over that amount of time I have put aside $103,200 into a Health Savings account. That doesn't include interest. With compound interest, even at 3% you are looking at well over a million dollars.
Now I could be spending my own money that I have set aside and got interest on, or go onto Medicare. Keep in mind the government only lost out on $23,323.20 over 43 years, and they got taxes from me on all of the rest of my disposable income. What do you think would be more cost effective for the government? Do you think with over $1 million dollars I would be able to purchase health insurance better than what Medicare offers?
I understand that there will always be those that can't afford to put $100 away into an account. I'm fine with Medicare helping those people. If there are a lot of people contributing to Medicare that end up purchasing their own healthcare later in life due to their investments, we would have more money to spend on coverage for those less fortunate.
Even if we were able to contribute to an HSA that was only exempt from Medicare taxes, you would see a MASSIVE influx of people doing it. The government would lose almost nothing (Only $1500 over 43 years using my example) and the savings to the government would be even greater.
So yes, government regulation is causing part of the problem. It ends up giving beneficiaries decreased services and benefits. I'm not asking for the privitization or end of Medicare, I'm just asking for the chance to invest in my own well being.
quote:
quote: I would like to point out too that Ryna's medicare plan is extremely close to what Congress has currently.
Since the members of Congress are basically all rich, I'm not surprised a system like that would work fine for them. But I'd like to hear more about the similarities. Do you have a link? [/QB]
I don't. I read a few articles back when he proposed the budget, but I can't seem to find them with a quick google search. I'll try to find some for you though and will post. I did read an article recently that said it is not like what Congress had, but it was just comparing premiums and co-pays.
Posts: 1937 | Registered: Nov 2006
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quote: Right now due to government regulation the only way I can contribute to an HSA if I have a high deductible plan.
This is a funny way to put it. Of course they "regulate" the circumstances under which you can put your income away tax-free.
It is not a funny way to put it. You are only thinking in the short term, not long term.
Let's look at it this way. If I was able to put $100 a paycheck into a Health Savings Account that I can use later in life, the government loses out on $1.45 in Medicare taxes. A DOLLAR FORTY FIVE. I still pay Medicare taxes on the rest of my disposable income. Let's assume that the Social Security tax goes back up to 6.2% and I pay a FIT rate of 15%. So the government loses out on a total of $22.60 per pay period, or $45.20 a month. That is a total of $542.40 per year for all three taxes combined.
Let's say I start contributing at 22 and retire at 65. That is a total net loss of $23,323.20 over the course of my career for the government. Now, over that amount of time I have put aside $103,200 into a Health Savings account. That doesn't include interest. With compound interest, even at 3% you are looking at well over a million dollars.
Now I could be spending my own money that I have set aside and got interest on, or go onto Medicare. Keep in mind the government only lost out on $23,323.20 over 43 years, and they got taxes from me on all of the rest of my disposable income. What do you think would be more cost effective for the government? Do you think with over $1 million dollars I would be able to purchase health insurance better than what Medicare offers?
I understand that there will always be those that can't afford to put $100 away into an account. I'm fine with Medicare helping those people. If there are a lot of people contributing to Medicare that end up purchasing their own healthcare later in life due to their investments, we would have more money to spend on coverage for those less fortunate.
Even if we were able to contribute to an HSA that was only exempt from Medicare taxes, you would see a MASSIVE influx of people doing it. The government would lose almost nothing (Only $1500 over 43 years using my example) and the savings to the government would be even greater.
So yes, government regulation is causing part of the problem. It ends up giving beneficiaries decreased services and benefits. I'm not asking for the privitization or end of Medicare, I'm just asking for the chance to invest in my own well being.
Hardly. Times those losses by 300 million people, and then factor the amount of interest the government would lost over 43 years....the same break you gave yourself...by the amount of total dollars lost.
And your "plan" doesn't really help anyone who can't afford $100 a month, as it removes revenue from a program that would still need to cover a large portion of our society.
And last...where the heck did you learn math? $100 a month, 12 months a year, over 43 years at 3% compounded interest, compounding MONTHLY, is NOT EVEN CLOSE to a million dollars. It's $105,077.73. Your total personal contributions would have been $51,600, not over $100,000. The rest is interest over 43 years.
posted
and $132,072.61. is the cost of 1 major illness for one year (Cancer, leukemia, heart surgery--not even close to replacement), or about 6 years in a full service medical facility, not counting transportation, medication, and medical services.
Posts: 1941 | Registered: Feb 2003
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quote:And last...where the heck did you learn math? $100 a month, 12 months a year, over 43 years at 3% compounded interest, compounding MONTHLY, is NOT EVEN CLOSE to a million dollars. It's $105,077.73. Your total personal contributions would have been
Hmm, family of four, two young children. Regular checkups (which are absolutely vital to inexpensive, effective health care)...but your second kid is born a little early, or the labor is especially difficult, say. This happens pretty early in the savings process, so of course that not so large nest egg is even smaller. A couple of years later, one kid needs his appendix out. Ka-ching! Maybe he needs to stay a few days longer for one of any number of reasons. Ka ching! Another needs treatment for depression when they're an adolescent, a very real possibility since depression is hardly unheard of. You throw your back out in a routine slip at work. Ka ching.
All of this is completely ordinary in terms of medical 'events' in a family's life. None of it is on the extreme end in terms of cost. It would chew to pieces such a nest egg.
Posts: 17164 | Registered: Jun 2001
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quote:Originally posted by Destineer: What about the guy who pumps your gas? Do you think he could ever put enough money in an HSA to pay for chemo?
You live in Oregon or New Jersey, don't you?
I think HSAs work fine for relatively small, expected expenses (annual physical, common generic drugs you can get for a few bucks a month, glasses, etc.). The problem is that you can end up needing care that most people couldn't hope to save up for. That's one reason why comparing the markets for medical care and food doesn't quite work. Your life will never depend on eating caviar and truffles, but random circumstances can mean you need the medical equivalent of those to survive. Sure, competition can help drive down prices, but there are limits to that. Even after patents expire, certain types of drugs (e.g. monoclonal antibodies, often used as chemotherapy) will probably remain expensive because they are expensive to produce.
Posts: 3546 | Registered: Jul 2002
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posted
The maximum yearly contribution to an HSA for an individual in 2012 is $3100. At that rate, you will have pay in to an HSA for 43 years to cover the average cost of a single major illness. That doesn't consider interest earned on the HSA, but it also doesn't consider inflation in medical care costs which, under current conditions, out paces interest rates by a pretty fair margin.
HSAs are a good in combination with an insurance plan that will cover major expenses. They are not a substitute for the insurance plan.
Posts: 12591 | Registered: Jan 2000
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quote: Right now due to government regulation the only way I can contribute to an HSA if I have a high deductible plan.
This is a funny way to put it. Of course they "regulate" the circumstances under which you can put your income away tax-free.
It is not a funny way to put it. You are only thinking in the short term, not long term.
Let's look at it this way. If I was able to put $100 a paycheck into a Health Savings Account that I can use later in life, the government loses out on $1.45 in Medicare taxes. A DOLLAR FORTY FIVE. I still pay Medicare taxes on the rest of my disposable income. Let's assume that the Social Security tax goes back up to 6.2% and I pay a FIT rate of 15%. So the government loses out on a total of $22.60 per pay period, or $45.20 a month. That is a total of $542.40 per year for all three taxes combined.
Let's say I start contributing at 22 and retire at 65. That is a total net loss of $23,323.20 over the course of my career for the government. Now, over that amount of time I have put aside $103,200 into a Health Savings account. That doesn't include interest. With compound interest, even at 3% you are looking at well over a million dollars.
Now I could be spending my own money that I have set aside and got interest on, or go onto Medicare. Keep in mind the government only lost out on $23,323.20 over 43 years, and they got taxes from me on all of the rest of my disposable income. What do you think would be more cost effective for the government? Do you think with over $1 million dollars I would be able to purchase health insurance better than what Medicare offers?
I understand that there will always be those that can't afford to put $100 away into an account. I'm fine with Medicare helping those people. If there are a lot of people contributing to Medicare that end up purchasing their own healthcare later in life due to their investments, we would have more money to spend on coverage for those less fortunate.
Even if we were able to contribute to an HSA that was only exempt from Medicare taxes, you would see a MASSIVE influx of people doing it. The government would lose almost nothing (Only $1500 over 43 years using my example) and the savings to the government would be even greater.
So yes, government regulation is causing part of the problem. It ends up giving beneficiaries decreased services and benefits. I'm not asking for the privitization or end of Medicare, I'm just asking for the chance to invest in my own well being.
Hardly. Times those losses by 300 million people, and then factor the amount of interest the government would lost over 43 years....the same break you gave yourself...by the amount of total dollars lost.
And your "plan" doesn't really help anyone who can't afford $100 a month, as it removes revenue from a program that would still need to cover a large portion of our society.
And last...where the heck did you learn math? $100 a month, 12 months a year, over 43 years at 3% compounded interest, compounding MONTHLY, is NOT EVEN CLOSE to a million dollars. It's $105,077.73. Your total personal contributions would have been $51,600, not over $100,000. The rest is interest over 43 years.
Look at my post again Kwea, I said $100 a paycheck. Do you get paid monthly? I was assuming a semi-monthly pay period. Add $200 for a year if you are bi-weekly.
You are right though on the compound interest. It would be about $211,000. My mistake. That would still be enough to purchase health insurance for years. Cool little tool, I will have to bookmark it. Assuming a 3% rate you would double your money. You would have to have an 8.5% rate to reach $1,000,000, something that is certainly possible if the account was set up like a 401(k), even more so if they enabled your employer to match contributions.
DM, yes a major illness can cost that much if you DON'T have health insurance at all. I'm talking about taking the money one saves over the years and purchasing a health insurance plan when you retire. Since there are no more lifetime maximums you would be responsible for your deductible as well as any annual out of pocket maximums, and that is all you would pay. You would still have that with Medicare.
I suppose I shouldn't call it an HSA since currently the way HSA's work a little differently than what I am suggesting. HSA's currently can only help pay for COBRA and not premiums. I can't really call it an HRA since that is already taken by Health Reimbursement Accounts. I need a new acronym.
Posts: 1937 | Registered: Nov 2006
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quote:That would still be enough to purchase health insurance for years.
So, to clarify, you are buying health insurance with your HSA (which, as you note, is not currently legal)?
Which means that you are not leaving money in your HSA to compound, since you're paying monthly premiums with that money?
So you are putting extra money, above and beyond the cost of your health insurance, into a HSA in hopes that that money will compound?
Posts: 37449 | Registered: May 1999
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quote:That would still be enough to purchase health insurance for years.
So, to clarify, you are buying health insurance with your HSA (which, as you note, is not currently legal)?
Which means that you are not leaving money in your HSA to compound, since you're paying monthly premiums with that money?
So you are putting extra money, above and beyond the cost of your health insurance, into a HSA in hopes that that money will compound?
Tom, Your reading comprehension is lacking. He said "I'm talking about taking the money one saves over the years and purchasing a health insurance plan when you retire."
He's talking about using the money save in an HSA to purchase a supplemental insurance plan when he retires.
If there was any reason to believe that the rules regarding medicare, HSBs, and the cost of medical insurance would remain even remotely like they are now and that you would have no other need medical needs for the next few decades, that plan might make sense. The chances that even one of those conditions might hold is vanishingly small.
Posts: 12591 | Registered: Jan 2000
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There are all sorts of online tools that weren't available years ago. Compound interest calculators, mortgage calculators with amortization tables, general loan calculators.....it's pretty amazing.
My dad wanted to show me a table about a mortgage once, so he hand wrote an amortization table for a 30 year land contract, compounded yearly rather than monthly, so show me the savings. Took him hours of prep.
I went online and showed him those calculators, and he turned bright red, while my mom dissolved into laughter behind us. Posts: 15082 | Registered: Jul 2001
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quote:Your reading comprehension is lacking. He said "I'm talking about taking the money one saves over the years and purchasing a health insurance plan when you retire."
So he's assuming no medical expenses until retirement?
Posts: 37449 | Registered: May 1999
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posted
He's assuming employer-provided health care until he retires, presumably with premiums of some sort, and an seperate account where you save to use to buy health insurance after you retire instead of having medicare.
Posts: 7954 | Registered: Mar 2004
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quote: Right now due to government regulation the only way I can contribute to an HSA if I have a high deductible plan.
This is a funny way to put it. Of course they "regulate" the circumstances under which you can put your income away tax-free.
It is not a funny way to put it. You are only thinking in the short term, not long term.
Let's look at it this way. If I was able to put $100 a paycheck into a Health Savings Account that I can use later in life, the government loses out on $1.45 in Medicare taxes. A DOLLAR FORTY FIVE. I still pay Medicare taxes on the rest of my disposable income. Let's assume that the Social Security tax goes back up to 6.2% and I pay a FIT rate of 15%. So the government loses out on a total of $22.60 per pay period, or $45.20 a month. That is a total of $542.40 per year for all three taxes combined.
Let's say I start contributing at 22 and retire at 65. That is a total net loss of $23,323.20 over the course of my career for the government. Now, over that amount of time I have put aside $103,200 into a Health Savings account. That doesn't include interest. With compound interest, even at 3% you are looking at well over a million dollars.
Now I could be spending my own money that I have set aside and got interest on, or go onto Medicare. Keep in mind the government only lost out on $23,323.20 over 43 years, and they got taxes from me on all of the rest of my disposable income. What do you think would be more cost effective for the government? Do you think with over $1 million dollars I would be able to purchase health insurance better than what Medicare offers?
I understand that there will always be those that can't afford to put $100 away into an account. I'm fine with Medicare helping those people. If there are a lot of people contributing to Medicare that end up purchasing their own healthcare later in life due to their investments, we would have more money to spend on coverage for those less fortunate.
Even if we were able to contribute to an HSA that was only exempt from Medicare taxes, you would see a MASSIVE influx of people doing it. The government would lose almost nothing (Only $1500 over 43 years using my example) and the savings to the government would be even greater.
So yes, government regulation is causing part of the problem. It ends up giving beneficiaries decreased services and benefits. I'm not asking for the privitization or end of Medicare, I'm just asking for the chance to invest in my own well being.
Hardly. Times those losses by 300 million people, and then factor the amount of interest the government would lost over 43 years....the same break you gave yourself...by the amount of total dollars lost.
And your "plan" doesn't really help anyone who can't afford $100 a month, as it removes revenue from a program that would still need to cover a large portion of our society.
And last...where the heck did you learn math? $100 a month, 12 months a year, over 43 years at 3% compounded interest, compounding MONTHLY, is NOT EVEN CLOSE to a million dollars. It's $105,077.73. Your total personal contributions would have been $51,600, not over $100,000. The rest is interest over 43 years.
Look at my post again Kwea, I said $100 a paycheck. Do you get paid monthly? I was assuming a semi-monthly pay period. Add $200 for a year if you are bi-weekly.
You are right though on the compound interest. It would be about $211,000. My mistake. That would still be enough to purchase health insurance for years. Cool little tool, I will have to bookmark it. Assuming a 3% rate you would double your money. You would have to have an 8.5% rate to reach $1,000,000, something that is certainly possible if the account was set up like a 401(k), even more so if they enabled your employer to match contributions.
DM, yes a major illness can cost that much if you DON'T have health insurance at all. I'm talking about taking the money one saves over the years and purchasing a health insurance plan when you retire. Since there are no more lifetime maximums you would be responsible for your deductible as well as any annual out of pocket maximums, and that is all you would pay. You would still have that with Medicare.
I suppose I shouldn't call it an HSA since currently the way HSA's work a little differently than what I am suggesting. HSA's currently can only help pay for COBRA and not premiums. I can't really call it an HRA since that is already taken by Health Reimbursement Accounts. I need a new acronym.
$211,000 sounds like a lot of money right now, but I suspect that, given the rate of healthcare cost inflation over the next 43 years, it'll be a drop in the bucket. Even if you were allowed to, it would probably only pay for a few years of coverage.
The problem with premium supports as a solution is that it does absolutely nothing to curb costs or price inflation, it merely shifts responsibility for payment. There isn't really even any competition involved, or any proof that seniors would be able to navigate such a field of choice anyway.
The only solution out there actively being bandied about or actually passed into law that addresses the issue of cost, rather than payment, is the ACA.
Posts: 21898 | Registered: Nov 2004
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posted
The problem IS that it only addresses cost. We still don't know what affect the ACA is going to have on health care costs. I perform open enrollment meetings all the time, and I can tell you that costs have not gone down one penny. I've had some clients whose premiums went up 20-30% since the ACA was passed.
We have to take a wait and see approach right now because we simply don't the entire impact.
I'm a big believer in giving people choices. Medicare is going to be awesome for some people, especially those that can't afford to save for health insurance. But if inflation is going to be a problem for people saving on their own, its going to be just as much as problem for Medicare, which the ACA cut by $700 billion.
My solution is obviously not the best one, but at least it is an idea. The baby boomers are getting older, and there is a time bomb of medical costs coming that Medicare can't handle and the ACA doesn't address.
Edit: I just saw the statement regarding premium payment types preventing competition. I don't know that I would really agree with that. We shop car insurance based on price, just as companies can do when shopping for health insurance. The problem is that due to different state laws and regulations and the lack of ability to purchase health insurance in another state, the costs go up. In Nevada for example Health Insurance companies are required to provide certain injections that other states do not.
Health insurance costs also depend on the health of your employees. I have a client that is a Lawyer. He has 10 employees. In that one year three had babies and one had to take time off for surgery. His rates climbed 50% from one year to the next, because his company got placed in a higher risk pool. The ACA has some provisions to try to lower the impact of things like this, but we simply don't know how effective it is going to be.
posted
The ACA has a ton of provisions in it that are geared toward reducing costs and improving efficiencies, but they haven't all taken effect yet. The law was designed to be phased in over time. Next year it will all be in place and we'll start to see the impact.
The vast majority of the reasons premiums skyrocketed last year (and my dad told me the same thing, he's in charge of figuring out insurance for the employees he manages) was because insurance companies knew the ACA banned those rate hikes, and they wanted to get them in before the gravy train ended. If they tried that next year, they'd be faced with a lawsuit.
And the ACA didn't cut a penny from Medicare. That's being bandied about a lot by Romney and Ryan, but it's not true. What it actually did was reduce costs in Medicare by that amount, a burden now borne by the ACA, it was not a transfer of funds, and Medicare benefits weren't reduced at all.
Edit to address your edit:
quote:Edit: I just saw the statement regarding premium payment types preventing competition. I don't know that I would really agree with that. We shop car insurance based on price, just as companies can do when shopping for health insurance. The problem is that due to different state laws and regulations and the lack of ability to purchase health insurance in another state, the costs go up. In Nevada for example Health Insurance companies are required to provide certain injections that other states do not.
Health insurance costs also depend on the health of your employees. I know a Lawyer who had 10 employees. In that one year three had babies and one had to take time off for surgery. His rates climbed 50% from one year to the next, because his company got placed in a higher risk pool. The ACA has some provisions to try to lower the impact of things like this, but we simply don't know how effective it is going to be.
Car insurance is incredibly simple. You have a car with a certain value, there are only one or two types of coverage, and you can get a quick and easy price quote from a multitude of agents very quickly and choose the best price. Health care is so complicated in comparison, it's hardly worth making a comparison at all.
I do agree that not being able to purchase across state lines leads to huge problems. Whole states are controlled by one or two health insurance providers with a virtual monopoly, and that stifles competition. On the other hand, if you throw the whole thing open, and if you take into account state laws that demand certain levels of coverage, then what you get is a race to the bottom. Health care companies, like corporations in Delaware or Luxemburg, will congregate in the state with the lowest possible number of restrictions, which will likely mean cheaper insurance, but it will also mean the level and quality of coverage drops precipitously as well. Unless national standards and base levels of coverage are established, you sacrifice care for cost.
The ACA spreads the risk out among a far larger pool. As an individual, you have zero power to negotiate rates or coverage levels. You get the price they give you. If you have 100,000 employees, you get deals on prescription rates and all sorts of other goodies, and you also get a much more diverse group to diversify your risk. The insurance exchanges that kick in next year are all about taking individuals and pooling them together to create diversified risk and to give them a serious bargaining power they currently lack.
Ideally, it'll lead to the undoing of employer provided insurance, which employers would love, and I think would ultimately benefit individuals.
Posts: 21898 | Registered: Nov 2004
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