Americans Are Delaying Health Care Until Tax Refunds Arrive | Hacker News Reader

Americans Are Delaying Health Care Until Tax Refunds Arrive

bloomberg.com

168 pointshoward941235 comments

As employers switch to High Deductible Health Plans where insurance doesn't kick in until one has spent a deductible of several thousand dollars, many people are delaying health care in general. A doctor's visit that once cost a co-pay of $30 is now frequently a cash price from $130 to $400, plus more for lab work. With higher costs and much of them unknown in advance, many skip getting things checked until it seems absolutely necessary.

> High Deductible Health Plans where insurance doesn't kick in until one has spent a deductible of several thousand dollars

HDHPs are a great deal for anyone who can set aside the deductible’s value in cash. They are a bad default. But a good thing to consider if you can set aside some cash.

(The problem with HSA-compatible plans is they have a maximum deductible. They’re thus almost as expensive as non-HDHP plans.)

There is definitely a psychological problem. When I had a high deductible plan I always set the max aside but considering the potential cost of a doctors visit I often hesitated. 1000 dollars is still 1000 dollars even if you have set them aside beforehand.

why is it a problem to have a maximum deductible?

Relatedly, it seems like there's roughly some 'max' insurance expects you to pay each year, and you can decide whether to take the risk using a high deductible plan, and potentially not have many expenses, but lower premium, or have higher premium up front.

8 years ago, our HDHP was ... $280/month. It's now north of $800, and the deductible went up. Yes, we're a bit older, too but it's still a bit crazy.

$280/month, with high deductible, meant that, in a bad year, we might have $15k in expenses before the insurance covered everything else. Now, it's more like $10k per year in premiums, and another $10k+ before insurance really would kick in. Catastrophic need? It's fine - I don't want to have to face a $400k bill. Day to day? This stinks.

8 years ago insurance was allowed to have yearly and lifetime policy limits. They could deny coverage for preexisting conditions and increase your premiums if you developed new conditions. You were also 8 years younger, which makes a big difference despite being only a few years.

Many people had policies with $100k yearly limits, any serious condition and they basically didn't have insurance.

And these are the folks who complain now that they weren't allowed to keep their plan. So many people had (and have) no idea that they had basically no real coverage, just a policy that looked good on paper.

> why is it a problem to have a maximum deductible?

Because it means I get to choose between $500 a month with a $6,500 deductible, and HSA-compatibility, and $150 a month with a $8,000 deductible. The latter is a better fit for my risk profile.

those are just deductibles - i didn't understand what "maximum deductible" meant in that context.

Unfortunately, my experience, at least in my state, is such that none of the premium options are remotely affordable now. $2000/month with a $1000 deductible per year, or $1300/month with an $11000 deductible. Neither of these are anywhere near 'affordable' in my book.

I paid 400 dollars to have a doctor tell me to neti pot my nose after having sinus infection for 3 months. Might not be rational but fuck everything about this system. Who is pocketing all this goddamn money?

Malpractice lawyers and insurance, administrative juggling of data and insurance claims, medical equipment manufactures and certification, doctors (by proxy medical schools and loan providers), practices recovering unpaid bills, and real estate owners.

Not to mention pharmaceutical companies charging astronomical prices for prescription meds.

Through no fault of the author, this comment thread explains the trick. The article talks about US health care access but the discussion quickly goes off into the weeds of the US health insurance market. As soon as we start talking about premiums we adopt business language and metrics and abandon medical language and metrics.

All that money is pocketed by businesses run for profit. It's pocketed because it can be. It can be because untreated a sinus infection can kill you. Not a bad business to be in by the standards of business.

You make it sound like the business isn't run by humans. Do you consider price gouging sick people and ethical business to get into? If not, please make that a bit more clear in your comment.

Being run by humans doesn't mean there is empathy built-in; to the contrary because its run by masses of humans, its out of touch with reality and majority of involved will tell you someone else makes final decision, while the rest will simply follow others. Its as numb as long hand of government can be. They don't see human patients with names and families, they same charts and graphs with numbers and profit/loss cells combined.

Its not ethical business but ethics doesn't matter much these days (devil's advocate here); heck one can argue even legality doesn't matter, as for example Wells Fargo has been getting away with daylight theft that would put a single person in prison for one million years.

So we have a problem:

1. assume businesses cannot be ethical. 2. so, telling a business to be ethical is pointless 3. to encourage prosocial behavior amongst businesses, they must, therefore, be regulated 4. but, since businesses cannot be ethical, they can use their power to control regulation

how to stop this hellscape? is it possible that assuming businesses cannot possibly act ethically was a lie spread by said companies?

tldr; then what's the solution, assuming regulatory capture is a thing?

> As soon as we start talking about premiums we adopt business language and metrics and abandon medical language and metrics.

To provide healthcare you need doctors, who need money to pay rent and student loans. You need an office to put the doctors in. You need drugs and medical devices, and researchers to come up with them. You need lawyers to keep the doctors from conducting the Tuskegee Experiment. And nurses and lab techs and janitors etc.

That is all business stuff. Paying employees and managing offices etc. If you don't pay the employees enough then they get another job and quality of care suffers. If you pay them too much then costs get out of hand.

The way you determine how much is the right amount is by letting people choose how much to pay for it. If you have a runny nose and the doctor wants ten million dollars to see you for five minutes, you blow them off as unreasonable and get a different doctor. If you demand to see them for $10 and that isn't enough to cover their costs, they blow you off as unreasonable and get a different patient. Somewhere in the middle there is a price above what it costs and below what it's worth where you neither die of a sinus infection nor sell your first born to have it cured.

There are a lot of reasons this works poorly in the US. Low deductible employer-provided health plans making consumers price insensitive, lack of price transparency, an excessively burdensome FDA approval process that impairs competition between pharma companies, etc. But those are specific failings that could be addressed.

Switching to central planning just adds a new problem without solving the existing ones. If consumers pay nothing, not even actual cost, there is even less incentive to forego unnecessary procedures. Setting prices by committee is a sure way to either overpay (and waste money) or underpay (and get supply shortages). If drug companies still set prices then costs remain high, but if they can't charge the prices they do and still have to go through the same very expensive approval process, you stop getting new drugs. And then you add another trillion tax dollars to the budget which every campaign donor in the country will have a chance to divert a chunk of away from actual medicine and into their own pockets.

> All that money is pocketed by businesses run for profit.

The significant majority of that money typically goes to employees, not shareholders. The costs are too high, but it's not because the average medical practice is turning a huge profit, it's because the existing regulatory environment causes providing medicine to be unnecessarily labor intensive (i.e. inefficient).

And yet, here we are talking about business instead of health.

Because it's a business problem. The problem isn't that doctors don't know what to prescribe when you have an infection, it's that healthcare is so expensive that people can't afford it.

if a law was passed requiring procedures to advertise the price like restaurants, it would solve most of the pricing issue. insurance systems obscure the price so the system doesn’t work.

The problem is that people don't get healthcare. Price is just the rationalization for denying it.

Price is way of measuring when it should be denied, because it has to be at some point. You can't spend the entire US GDP to save one life, even if it would work. At some price you have to say it's too expensive.

Then the question is, do you want to decide that amount for yourself, or have someone else deciding it for you?

Because its a scam to extract the maximum amount of wealth from people with no real choice options out. And the ilusion, that in this stick-up of scenarios, the individual is to be able to engage in a free-market decision.

If you have some cold symptoms, you can't call around to find a doctor who will diagnose it for a reasonable price, because they won't give you one.

But that's not a stick up, it's a lack of price transparency. So how about we get a price transparency law?

The "stick up" scenario is limited to emergency care, and there is an argument that emergency services should be provided by the city for that reason. But most healthcare is not emergency services, nor would having your city do that require any kind of national policy -- you can go implement that right now.

It's the exact thing that works perfectly at the local level, because the stick up scenario itself is what prevents arbitrage. People in Houston can't vote to cut local emergency services and then go to the emergency room in Boston when they have a heart attack, because it's too far away.

Its more complex, to judge wether you are getting unnecessary procedures priced in, you would need to be a expert in the field. Its similar to enterprise software, where the customer often gets a "all-scenarios"included gigantic package - half of which he will never use.

Now add to that a field of experts, fused together by a lethal threat to their profession (lawsuits with expenses for life if you do damage) - forming a Wagonfort - and you get the perfect mess.

You neglect to bring up culpability of insurance companies.

The US has by far the highest pharma/biotech drug prices in the world. They are effectively paying for global R&D. Other countries use collective bargaining and government regulation to negotiate price. If I'm correct this is illegal in the US.

In the UK for instance, we do not have access to the best drugs because they are too expensive.

A large part of US insurance expenditure goes to pharma...

They are not paying for R&D but they are paying for drug pushers and doctors bribes. Seriously, the marketing budget exceeds the R&D budget.

They are paying for R&D and marketing. Even if you subtract out the difference in marketing budgets, the US is still paying for a disproportionate share of the R&D.

Moreover, ban drug marketing if you like, but keep in mind two things. One, the marketing is primarily so "worthwhile" because of the price insensitivity. Patient requests equivalent but better-advertised drug even if it costs $75,000 more dollars, when they're not the one paying. So fix that and the marketing budgets drop along with drug prices. Two, marketing increases the number of "customers" by more than the cost of the marketing (or why do it?), and the extra money is what both encourages and pays for more R&D.

But so is food, and while I probably won't die in the next 6 months from lack of medical attention, if the groceries shut down I would.

Yet the US medical system is a giant clusterfuck of burned money, and the US food system can provide food at some of the lowest prices in the developed world. US chicken is half what I have to pay in Europe.

That is a choice regarding animal welfare and food standards, though. Not because the EU doesn't know how to produce chickens efficiently.

Exactly. German perspective here: I pay for my public health care quite a lot. Probably around $10.000 a year pre-tax which is half coming from my employer and half out of my pocket. My wife is having a private insurance and is paying a little less. That is ok, even if I don't think her option should exist and the overall system is only working due to the gating for the private option. I'm earning above average and am paying for some who earn less. Any public option that covers a large population section needs to include some redistribution aspects. Because health care is too expensive for people on lower incomes.

But it does not need to be as expensive as in the US i.e. twice as expensive as anywhere else and no better outcomes. Insurance companies are not the party that is benefiting the most. They make money and probably more than they should but this does not explain the difference. Most doctors are also not swimming in money. So where does it go?

One is Pharma companies who are then using that money to do marketing. So Pharma Marketing gets a share including doctors taking money from that source (another whole can of worms).

Larger hospital organizations and their management as one of the stronger buyers of services being able to push for high rates and low salaries.

Bill adjusters, debt collectors, partly working in insurance companies (where they contribute to insurance cost) to deal with the chaotic billing, payments and non-payments.

There are many, many who earn a good living who would not be able to get similar jobs in other advanced countries as these jobs simply do not exist. The US system is inefficient but there are powerful incentives for many to keep it going.

It is really important to separate access from payment. Otherwise small wounds will fester until it is too late or really expensive. A good compromise imho. is having some small access fee (in Germany we had a once per quarter 10 Euro fee on top of a 5€ per prescription fee. That was too much for low income and too much paperwork and the former was scrapped) as we know there is a huge difference between demand for free services and services that cost $0.01.

Does it matter who? They charge you because they can, America decided your survival (AKA health) is just another business an you can be charged as much as you are willing to pay for it; and those companies -with the help of cultural baggage- have convinced a significant chunk of the population that this shady business is part of the "freedoms" you have as American, because controlling the prices would be "communism" or "socialism", words we all were taught to associate with evilness and enemies.

The armies of administrative workers:

1. https://www.advisory.com/daily-briefing/2018/07/23/administr...

2. https://www.athenahealth.com/insight/expert-forum-rise-and-r...

I just paid $1436 because we took our 1 year old son in when he had a stomach bug and they decided they needed to keep him for 24 hours for observation after giving him an IV to re-hydrate him. Glad he's okay, but if I knew we would be out $1500, I don't know that we would have taken him in.

this exactly. we need to change the system so prices are up front and something you can look up on the internet just like restaurant menus

> many skip getting things checked until it seems absolutely necessary

True, but isn't that the entire point of hdhps, to minimize unnecessary visits?

They still provide no additional cost annual physicals, so you'll get the required yearly screening.

Additionally, many offices have no cost phone or email advice.

I'm personally quite happy with my family HDHP - and it is nice to have additional retirement savings.

But you have to have a savings mindset; many people don't which is what leads to medical spending increases when a refund comes in.

> They still provide no additional cost annual physicals, so you'll get the required yearly screening.

Well, until you find out that you can only get the physical for free, and physicals are really not worth much. If you discuss anything at all with your doctor that is outside a routine physical, ask any questions, get any advice, and he codes it when he submits the bill -- it won't be free at all, it'll cost you a couple hundred bucks. So there is incentive not to bother.

If that happens, honestly it is time to get a different doctor. :) Good primary care doctors should be incentivized not to do that as it is a great way to churn patients.

That is a good point. My current doctor hasn't yet done this to me. Past doctors for sure, but my current GP is pretty laid back.

Just because something is minor does not mean it isn't urgent or best tended to sooner rather than later. Strangely enough, those of us with universal health care don't make it a hobby to go to the doctor's office because it is "free" at point of use. We only go when necessary, we just don't have to weigh the possible trade off of food, shelter or savings in the equation that turns minor, easily treated conditions into major, life threatening ones.

The co-pay was $10 for me in 1989. I had outpatient arthroscopic knee surgery in 1993 and it cost me nothing including X-Rays/MRI/CAT scan (the ortho was having trouble diagnosing it). All the pricing stories I hear today scare the heck out of me.

Actually I find that with my high ductable Health Plan, my visits did not change price. And you failed to mention how you get to save/grow/spend your money tax free. I made 12% on my HSA last great and didn't pay a dime of tax.

A lot of folks are in California on this board which hurts the investment case for HSAs (state taxes investment and contributions). New Jersey similarly doesn't recognize HSAs.

I'm even researching medical tourism. The unknown financial risks are too high

And if I am wrong please correct me, but I recall high deductible health insurance became more common/prominent since "obamacare". Which i viewed as at best a half measure at the time.

Why why why do you put up with this in America?? I live in the uk and health has always been free at point of use.

The cost is spread amongst all tax payers and costs kept low.

I honestly don’t understand why not every single American is screaming for access to health services that are literally on their front lawn.

I cannot fathom this is any way shape or form.

> Why why why do you put up with this in America??

What do you suggest we do?

> I honestly don’t understand why not every single American is screaming for access to health services that are literally on their front lawn.

You think we aren't?

You think it matters?

Look at the last election... results speak for themselves, that is why people are confused why this isn't the single largest issue for American people.

Which election? Neither Hillary nor Trump were in favor of socialized medicine. Bernie was, but the rigged system made sure he wasn’t an option.

We have 11 nuclear powered aircraft carriers in service in four more on the way. No money for healthcare.

Nuclear powered aircraft carriers are cheaper than diesel powered aircraft carriers.

I believe the point was that aircraft carriers are more expensive than no aircraft carriers.

Possibly, but the point was poorly formed, lacked specificity, and is outside the scope of conversation.

A common talking point is about how we spend y on the military_thing when we could be spending on y on problem_x. Seemed fairly obvious in the context of this discussion.

It's not in scope merely because cliche stupidity is common.

It's not that there's no money, there's just not enough will.

Because the vast majority of people have coverage through work and the fear of unknown changes in coverage is greater than (potentially) saving some money. Throw in Medicare (old people) and Medicaid (poverty) and I think you’re somewhere around 85% of the populace covered.

The vocal minority of people who do not have health insurance through work, not receiving subsidies, not receiving Medicare, and not receiving Medicaid are the ones clamoring for universal healthcare. Just because they’re loud doesn’t mean they reflect the will of the masses.

Vocal minorities don’t win elections. They just get a lot of news coverage.

People get stuck working for corporations because it’s the only economical way to get healthcare, even if they could otherwise pull off entrepreneurship/freelancing/retirement. Others get stuck as subservient to parents or spouses who control their access to healthcare.

I wouldn’t assume that having coverage means you’re happy with the situation.

Hello, just thought you should know that you're completely incorrect. I make a decent income and have an excellent healthcare plan which costs me about 7% of my pre-tax income. My copays and out of pocket max are low enough that I can use this plan at will when I feel like I need to.

However, since my friends and family do not all have decent insurance and cannot cover their high deductibles if things go even slightly wrong, and since I personally was in a place not so long ago of delaying treatment on an ongoing health problem I've been having due to a lapse in coverage due to a job change, and since my loved ones have recently been in financial situations that disincentivize them from getting treatment to improve their quality of life, I would be happy to pay (ahem) higher taxes (what's a premium again?) in exchange for peace of mind regarding my future health and that of my loved ones.

And the health of people that I do not even know.

Many of these articles exaggerate the price of healthcare in the US. I'm an independent contractor and pay for my own health insurance. My wife and I together cost less that 500/month (universal care would take way more in taxes) Checkups are covered, prescriptions are mostly free or very inexpensive, and if I do have an emergency, I don't need to wait 6 months to get treated, like in the UK or Canada. I also get some of the best doctors in the world.

A good test of a country's quality of healthcare is where people that don't have to worry about money go to get treated....that's currently the US.

It has problems, but sacrificing quality for nationalization is not the solution.

> Many of these articles exaggerate the price of healthcare in the US. I'm an independent contractor and pay for my own health insurance. My wife and I together cost less that 500/month

Do you think $500 a month is cheap? That's insane - that's about a quarter of my entire income tax in the UK.

> It has problems, but sacrificing quality for nationalization is not the solution.

But both life expectancy is lower and infant mortality is higher in the US than in the UK.

What quality do you think you'd be sacrificing? I'm getting better life expectancy and infant mortality than you are, and I'm paying a lot less than you are.

That's some blatant misinformation. In Canada you don't wait for treatment. If you need treatment, you will be treated. Stop spreading some garbage myth.

Yeah, is clear him and thousands of others like him around the internet have a very clear agenda posting about how they believe the US health care system is great, that going bankrupt for healthcare services (or dying because they couldn't afford meds[0]) is just an acceptable and normal part of American society.

[0] https://www.snopes.com/fact-check/alex-smith-died-couldnt-af...

I don't know where you live in Canada, but that's not entirely true. There are long waits for some procedures (far longer than medically indicated) and a significant number of people cannot access primary care because of the shortage of GPs (especially in rural areas). I would still, 100%, rather live in Canada than the US but your comment (intentionally or not) completely glosses over the waiting lists for some medical specialties.

People in the US see short lines and think "wow I can use our system whenever I want" instead of "wow our system is so expensive that it's usage is much lower than capacity".

This post must be missing a sarcasm tag... the average cost of healthcare in the USA is HUGE and far higher than most other developed countries. As for quality, you are severely underestimating the clinical care provided in countries even as "underdeveloped" as India (I quote it because I'm sure you might have that opinion of the country in question).

If you have any kind of moderate condition in the USA you are likely screwed. Of course our system protects against catastrophic incidents and helps with basic checkups but everything in between is not covered by most plans.

The distortion from what you say and reality is at comical levels, you might as well be saying the earth is flat. The reality is that the country with the best healthcare quality in the world: Denmark, pays $3,512 per each citizen per year on average for a significantly better health care.

Source: https://www.denverpost.com/2009/09/03/health-care-in-denmark...

Because Americans think it will be about as effective as the VA. I used to work in the NHS, and it has a lot of good points, but rationing is an inevitable part of care when "everything" is free at the point of use:

https://www.thetimes.co.uk/article/elderly-go-blind-as-nhs-i...

> Out-of-pocket medical spending jumps once the money hits people’s bank accounts.

It is a bad thing that tax withholding is one of the few ways Americans can have savings. When you live check to check this can be your only option.

How is it the only option? If withholding is less, what’s stopping people from saving the reduction? A refund is essentially an interest free loan repayment from the government. Refunds should ideally be zero.

> How is it the only option?

It’s not but it’s a lot easier for many people if they don’t realize they have the money.

> If withholding is less, what’s stopping people from saving the reduction?

Reality. It’s no different then walking around town with a couples $20 bills vs walking around with your pockets empty. Sure you could just not spend any of it but it’s a hell of a lot easier if you don’t even have the option.

Not having cash on hand and being forced to make due with less is surprisingly effective.

It's an extremely short term solution to make everyone feel happy and warm inside without any long term results. The lack of impulse control won't sudden vanish once the refund arrives, and they will be back in that situation again a few short months after.

> The lack of impulse control won't sudden vanish once the refund arrives

I see why you reason like this as the reality seems counter-intuitive. The cause is poverty the effect is harder times taking economic sound decisions. Not the other way around.

One of the many articles about the topic: https://newrepublic.com/article/122887/poor-people-dont-have...

Not what I meant to come across as saying. Increased self control can help us all, and it can especially help poor people get out of debt and poverty.

EITC and tax credits. The poor are not just receiving a refund on withholdings.

That tax withholding is the only way that many Americans manage to save speaks more to a lack of self-control than anything else.

If Uncle Sam can save a lump-sum for you by deducting from your paycheck, you could have done the same (in fact, better) with a bit of resolve and a bank account.

Not necessarily -- perhaps you're in debt day-to-day. This is the reality for many Americans.

> That tax withholding is the only way that many Americans manage to save speaks more to a lack of self-control than anything else.

I understand that it may seem so. But, when there is millions of Americans in that situation then it is a systemic problem not a personal one.

There is a lot of on-line resources about this topic. e.g. https://www.google.com/search?q=the+cost+of+being+poor

Yeah there was a great breakdown of this when the representative from Irvine, California grilled CEO Jaimie Dimon, a bank teller who lives in Irvine makes $15 an hour, basically such a person if they have their own apartment will be forced to choose between having food and having a phone. We have kept salaries frozen for so many decades that we have impoverished the majority of working people to a ridiculous level. Asking people to go get more education is a joke when PHD's often live in their vehicle or live within homeless shelters as part time adjunct staff.

Why would you expect that a bank teller has their own apartment? Your own apartment isn’t some kind of birthright. I had roommates until I was 27.

Someone who has full time job should have some semblance of independence.

I'm dreading the day that homes are just owned by your employer so you can keep the slaves working for you forever.

And then we will live in our cars, and they're already enforcing that as illegal too :)

It's not "they" or "the rich" that are doing this. It's your fellow man that you probably vote along side.

Support for the AMA, support for the insurance corporations, local regressive housing policies. This didn't come from some evil lizard overlord.

It came from your friends and neighbours who have arrayed themselves against you. If you don't want to draw battle lines with them, fine, but right now you're fighting shadows.

If you were the one who downvoted me then it's a shame because we agree.

Firstly, I am an anarchist. I don't vote for anyone. Secondly, anyone, be they politician or just voter, who is trying to enact these thoroughly horrific laws and policies is just flat out telling us how to live our lives while processing it.

I have not had a lease in 3 years. I can't afford anything. So that's where I'm coming from.

Just to answer one part: I follow /. etiquette. I don't vote in threads I participate in.

Also the website does not permit downvoting responses so you know it wasn't me who voted your newer response down. So you can then conclude it's also possible that people disagree with your original post and that the voting was by someone else.

Having a full time job and not being able to afford to have your own place is simply miserable.

I've definitely been there and I think it only would have sucked had I believed my income would never rise.

Which to the greater point - what should the lifestyle expectation be on entry level jobs?

That’s an absurd level of luxury that people have become accommodated to. To the nearest percentage point, 0% of people in human history have grown up with the expectation of an entire dwelling as their personal domain. It’s wasteful and absurd. Resources like showers which are used 15 minutes a day should not sit idly all day waiting for a single person.

While certain facilities may have been shared, my understanding is that generally speaking people have been able to have a space that they or at least their family owned. Personally, I would be thrilled to own the place I live even if things like bathrooms were shared.

That's honestly a horrible way of looking at things. Having privacy in your own home should not be seen as luxury. Until now, at least in my country, having your own place was seen as normal and healthy. We should not go back and think "that was just a luxury". That could be done by 1) building more housing or 2) getting serious about remote working.

And why is that, that you think so?

Why should anyone have the right to their own place?

Asking from a point of genuine curiosity. Had not thought about that much until now.

We don't expect it. We expect all but the rich to be continually milked and bled more and more, their productivity harvested and their income withered, and with it their lives - healthcare, living quarters, food, family, leisure, whatever can be given up to give the rich more - until it can be reduced no more.

That's what we expect; we only aspire to better things.

You’re being downvoted, but you raise an important dynamic. When we bargain down and lower our expectations, who benefits? If we pack ourselves into tighter living quarters and don’t pocket the savings, or pay higher insurance premiums for no more or better care, where do you suppose the benefit goes?

The disadvantaged need to step up their bargaining game. When have you ever heard of a businessperson say, “I can’t ask for this benefit, I haven’t done anything to deserve it?” Their whole ethos is to always ask for more to maximize profits and they’ve been quite successful over the years, clearly.

Imagine if the lower income earners rose up to meet the challenge posed by the profiteers.

I think it is reasonable as a society that we should have options for living alone that are affordable.. or otherwise pay living wages.

Based on what do you think that? You can be happy, healthy, and safe, even if you have to share a kitchen and bathroom.

Single-resident dwellings are the exception throughout human history.

Not that I necessarily disagree with you - I'm still figuring out how exactly to think about this issue.

It’s based on universal human rights.

Which ones, though?

I can imagine a utopian city where everyone lives in dorms and uses public dining and bath facilities. In that thought experiment, it's hard to feel like anyone's rights are being trampled.

And it's not clear that sharing a flat with another person has to be a worse arrangement than that.

PS: Did you really feel that anyone would find that answer helpful? Or was it just a veiled rendition of "clearly, if you disagree with me then you are a priori too morally bankrupt to have this conversation"? The latter attitude is poor approach to dealing with people who might otherwise be persuaded to your way of thinking.

Everywhere in the US? Because that’s not a reasonable expectation in places like SF, NYC or even Irvine.

There are plenty of places in the US where a teller making $15/hr could have their own apartment.

I disagree. Throughout most of human history families have been able to own their own home. If someone was unable to own their own home they were free to establish a homestead on some unclaimed land. I conclude that the ability to own your own home is part of the social contract.

I realize that in many cases the land was technically owned by the gentry but I am talking about the day to day reality.

Throughout most of North American history post-Columbus, sure. The rest of history was what we developed world moderns would call grinding poverty for most people at most times. And the only reason peasants had land (when they did actually own land) is because it was their source of sustenance. It wasn’t the place for idleness that land is for most people in the developed world.

Your average person certainly had less wealth in the past, but it seems to me that they had more independence which is what, at least for me, a home represents.

It seems to me that the social contract implicit in the industrial revolution was that average people gave up some independence (e.g. by being managed in factories rather than being artisans or farmers) in exchange for material prosperity. Now that the material prosperity side of that bargain is breaking down, it's understandable that people are upset.

I don't think the fact that peasants supported themselves through farming is directly relevant since we are talking about where people live not how they work. That is, the fact that they also used their land for their livelihood does not change the fact that they also lived there.

Are you familiar with how feudal economies worked? People were restricted in feudal economies in a way that we would find horrifying. Peasants were legally bound to the land they were born on. As in, they were not allowed to leave unless their the lord they were bound to approved.

The industrial revolution was a weird time. Our ability to make stuff vastly outstripped population growth. And there was an entire continent (North America) that excess Europeans and Americans could move to. That process is done. Now we’re back to the perpetual grind.

Maybe they should move?

That is the fundamental problem isn't it. Mobility.

It’s rich that the representative from Irvine thinks hourly pay is the problem and not the cost of housing in CA. I am in the 96th percentile of earners and there is no way my family could afford to live in Irvine.

Housing cost is a problem in California (and New York, and D.C.). But wage stagnation is a problem everywhere. That rents are too high in Irvine doesn't negate the fact that wages are too low as well.

If the company location is based in Irvine, and they have entry level positions, you shouldn't have to live 2 hours away to be able to afford to work there.

There’s this idea about poverty and cognitive control competing. It may be harder to save when you’re already poor

You will also easier end up poor if you have bad cognitive control.

> You will also easier end up poor if you have bad cognitive control.

My personal experience is that many middle class people has little control. But, the effect on them is small. That clothes that they do not need or that extra vacations are not going to make them poor.

But, I am sure that in very extreme cases like gambling addiction middle class people can become poor.

humans are gonna be humans, we need societies that work with actual humans and their faults rather than just wishing humans were perfect.

78% of American workers live pay cheque to pay cheque.

I would suggest that of the two possible hypotheses, the one where the system itself doesn't let them do anything else, might be the one more worth examining than the one that betrays a complete lack of empathy with your fellow citizens.

The bottom 78% of incomes varies widely, so we know it's a result of spending, not earning.

It's not necessarily that simple.

I would say that for most Americans who are cash poor, they intentionally do not optimize their taxes to break even, but rather to ensure they never end up owing the government money at the end of the year.

The rationale for this is pretty simple. Even if you're poor, $50 a month in extra income isn't going to make or break you, but an unexpected bill for $600 in April can really mess you up. On the other hand, just going with max withholdings and discovering in April that you get $600 back from the government is a nice bonus.

It's not the "optimal" decision from a finance perspective, but for a lot of people it works better in real life.

It is still better to save an extra $50 in your own bank account than let the government pay you 0% interest in it.

Not if you'd otherwise spend the extra $50 each month.

But not when - instead of being some arbitrary number like $50 - it’s a vague and unknown future liability.

Most people end up with some mix of side income and tax breaks that are hard to predict in advance. If you’re wealthy and you’re off by $500, so what. But if you’re poor and you were off by $500, it can be devastating.

So again, I think it’s rational behavior for some whose life is optimized around avoiding cash flow surprises than optimized amount maximizing return on capital.

You're forgetting about the Earned Income Tax Credit and other tax credits. Not all money paid out by the IRS is from wage withholding.

Would you pay a few % more in taxes knowing that every human in this nation could receive the healthcare they need? I would without a second thought.

Few more in taxes? Maybe we can redirect some funds pocketed by the military industrial complex instead. Though Boeing and others will fight to the death over their infinite money supply/bailouts.

Would not be nearly enough.

U.S. health care spending grew 3.9 percent in 2017, reaching $3.5 trillion or $10,739 per person.

That exceeds tax federal income tax revenue by about $2 trillion

The us govt already spends so much on healthcare.

The problem isn’t that we don’t have socialized healthcare. The problem is that for some reason, healthcare in this country is ridiculously expensive. We can’t have both; only one or the other. If healthcare is too expensive and you socialize it, the government will be bleeding even more money trying to pay for it all.

The answer is obvious: deregulate. Indian surgeons already perform more heart bypasses more often for a tenth the cost with better outcomes.

Down with the AMA. Probably the organization with the most blood on its hands in peacetime America.

It is a lack of regulation that got us into this mess. I don’t hate the free market, but the prices in the US are caused by the free market gouging as much as they can out of someone who has no bargaining power

It's not a free market when the alternative to buying id dying. It's more like putting a gun to someone's head and saying "give me $50k or I pull the trigger." That's not a free market transaction, it's a mugging. It doesn't magically become better if you get to choose which mugger you pay, or play them off each other to negotiate down in price. It's still a forced transaction.

You do have socialised healthcare - it is called Medicare, Medicaid and VA. You are of course 100% correct that the problem is the cost of USA healthcare, followed closely by its complexity.

It's just shifting money around. People are already paying that 3.5T. You're just changing the payer.

And that really doesn't matter because healthcare is so distorted it's tough to even argue that it's a free market at all.

Healthcare seems like the poster child for an inelastic market. The fact that so many people are still successfully being led to believe otherwise is a travesty.

With single payer you could possibly expect a tax-reduction for the same care.

You guys pay top 3 in the world in taxes towards healthcare, and just as much out of pocket, making it almost 2x as expensive for individuals than for example the nordic countries.

As a comparison 1 year max coverage for all visits and procedures after which you pay $0 is about $125 and another $125 for meds in the nordics. That's with the same $ amount of taxes per capita to healthcare.

This has been true forever. Everyone is broke after Christmas and refunds turn the lights back on for retail starting in the end of March.

Yep... Even car sales increase because people have money for the down-payment.

A large population of Americans do not have much savings. Could be bad money management, low paying jobs, bad luck (health issues) etc.

Phht, bad money management. When loan sharks are peddling 450% payday loans people are being taken advantage of by corporations. The government needs to practice better money management, not us private citizens. Close tax loopholes.

Actually both. It was crazy when I read from a person that he preferred paying his rent over eating, but it actually makes sense: if you get to the street, and not able to clean yourself, the chances of getting a job goes down dramatically.

If you get evicted, you're going to have a lot harder time getting into another apartment, too. It's also a lot easier to get help with food than to get help with a place to live.

Also food is insanely inexpensive. Doesn’t come anywhere near cost of housing unless you have a large family.

I would definitely pay rent first, always. There are food banks to keep you from starving to death, but without a roof over your head your life is going to completely fall apart.

Usurious loans are unethical and disgusting. If people aren’t capable of effective money management, that just reinforces that the justifications used by that agency are bunk.

Practically all owns today are usurious, since interest is involved. If you look at the old testament and the Quran, this was prohibited for a reason, and we see the effects today very clearly.

Why would anyone lend money without interest?

Should probably add: why would anyone lend money without interest to someone they don’t know?

Right, lending money without interest is pretty common within families and trusted friendships. But obviously the amount of credit available loan free from friends or family is going to be significantly less than what a financial institution would give you.

Because there’s a very substantial system of laws and governance enforcing the terms of the loan.

But if there’s no money to be made, why would a business bother?

Well, if you can basically create money out of thin air, then the interest rate for loaning it out ought to be pretty low.

Especially when you will be bailed out by the government.

One reason is purely out of goodwill, to help someone out. Another way is to invest your money (which is basically what a lot of people end up doing today), this can be viewed as a form of lending, but with the possibility of making profit. So if someone wants to take a loan to start a business for example, you lend them money to own a portion of it, and hopefully get something in return. Basically what VCs do nowadays.

Living in 2019, I’m not referring to the medieval context of the word.

This is a dismissive non-argument. Interest (usury) is a disastrous and parasitic practice that inherently feeds off of the needy. We already see the effects of that today.

You'll find payday loans at upwards of ~1700 percent, depending on state regulations. It's pretty ridiculous.

I’m sure the default rate is also pretty ridiculous. That’s what the APR is paying for, after all.

Probably not as much as you think. People often take out further loans to pay their payday loans. It becomes a self fulfilling system.

Can you seriously not see how tremendously high the default rate would be on a loan to someone who can’t wait the few days until their next payday? Or how high it would be if they’re using that loan to pay off another payday loan? If you could provide those loans for cheaper, there would be competitors hoovering up the free money.

If you are reading this and find yourself in the same situation... consider decreasing your withholding and have the money deducted into a HSA or FSA instead. You can still use the money for health expenses, and you will also get a 20-30% tax discount.

Note that the tax benefits of a Health Savings Account are much better than the Flex Spending Account, if you can get it. [0] https://www.investopedia.com/insurance/hsa-vs-fsa/

HSA contributions are:

* Deducted from your paycheck and skip all taxes

* Allowed to earn interest, tax-free

* Carried from year to year

* Tax-free when used on health expenses

* Flexible amount

FSA contributions are:

* Deducted from your paycheck and skip all taxes

* Not able to accrue interest

* "use it or lose it" per year

* Fixed Amount

HSA contributions do not have to be deducted from you paycheck and you don't have to use the provider that your employer has selected.

This is insane given that the executive branch has been jiggering around with the withholding amounts for the entire year. Yes, you probably paid slightly less in tax during the year, but unless you were paying attention to your federal withholding, you're probably in for a shock with your federal return.

The solution to people’s inability to save is not for the government to hold their money hostage.

Indeed. I always aim to get no refund or to owe. There is no good reason to give the government an interest-free loan with your own money.

Except that is literally the solution, witness superannuation plans and social security systems around the world.

Not a big fan of those either, but at least give access to invest the funds in a savings account or the market. I’d rather we teach some basic finance and civic responsibility in school.

Also a problem.

You can adjust your tax withholdings to reduce your refund. I personally aim to minimize my bill or refund.

> The solution to people’s inability to save is not for the government to hold their money hostage.

Meanwhile, in the real world where the left-hand side of the Bell curve exists, and where many people have poor impulse control, that actually is the solution to some people's inability to save.

Heck, as a student I worked in a union shop where this was actually baked into the collective agreement because of past experience of people not being able to save.

It shouldn't necessarily be mandatory, and there are ways to adjust one's withholding taxes, but it isn't all-bad.

But wouldn't we all be more free, really, if we just gave everyone enough rope to hang themselves & then locked up the left-hand side of the bell curve in debtor's prison?

Does the left hand side of the bell curve actually owe any federal income tax?

FICA is always paid, and hits lower wages harder. You know that money just goes to the general fund.

Then make it a line item in the budget called basic income or savings something transparent, and give it to everyone.

It is, actually. Unless you have figured out some previously-unknown way to successfully educate the entire population to be financially responsible?

We do have public education but I suppose its too much to make this sort of thing mandatory.

Clearly that's not enough. Asserting that it should be and doing what amounts to punishing people because you don't like the way they are isn't going to help.

It is easy to ignore the reality of human nature especially for those who are struggling.

Definitely agree. Like others have commented here, you should be trying to minimize your return as much as possible.

The point of the article was that people are waiting for their large refunds and are deferring health care until they get those refunds. My point is that many of those people won't actually be getting a return and won't be able to afford the health care that they need.

Withholding is an awful idea designed to favor the government over the taxpayer and to psychologically soften the blow of the ridiculous tax rates we pay. It's especially bad with mandatory withholding by the employer. It shouldn't happen. Taxpayers ought to figure out how much they owe and write the check for it at once. This is especially true since consumers can't invest that income or get interest on it: I could get a 6-month CD and make some extra money otherwise.

I would like that system, but unfortunately most of our fellow citizens would end up broke come tax time. Most people simply say "I can spend until my bank account is empty".

That's why most people choose impound accounts when they get a mortgage. Because they literally can not budget money for the bi-annual property tax bill, so they have the bank take the money every month.

It's also why teachers are offered a 10 check plan or 12 check plan. They get the same money, but most of them choose the 12 check plan, just so they don't have to remember to save money to live in the summer.

That's why the banks offer those "save your pennies" plans. Every time you make a debt card charge, they round up to the nearest dollar and then put the rest in a savings account for you. Because people are that bad at budgeting.

Can you imagine most of the people you know having the ability to set aside 20% of their check each month and not spending it ever?

I get this, and also that it's to help prevent the sticker shock of taxes that can lead to serious backlash. With that said, America is not supposed to be a place where the Nanny State must step in to manage people's lives for them simply because they can't do it themselves. I and my fellow citizens should not have to lose money simply because others choose to waste money.

I like the comment lotsofpulp made below: "The solution to people’s inability to save is not for the government to hold their money hostage."

The government doesn't hold anyone's money hostage. You are free to adjust your W-4 withholdings any time you want. They even have an online calculator to estimate your tax burden and set your withholding properly.

Yes they do, because there is still employer withholding. Almost 75% of Americans had too much withheld: https://www.cnbc.com/2018/08/01/30-million-americans-are-not...

And if you don't believe me on the reducing-sticker-shock part, here's a quote from the Treasury: "it... greatly reduced the taxpayer's awareness of the amount of tax being collected, i.e. it reduced the transparency of the tax, which made it easier to raise taxes in the future."

https://en.wikipedia.org/wiki/Tax_withholding_in_the_United_...

It is indeed a very underhanded way to con citizens into putting up with stupidly high taxes.

Oh, and for what it's worth, it hits lower incomes harder because they are less likely to hire tax advisors, fancy accountants, etc. to make sense of it all for them. Maybe we would end up with lower taxes on our poorest, too, if they realized how much they were being robbed.

For the record, I make good income for the area, which isn't amazing, and also have three kids. I had no federal tax burden this year and was in fact reimbursed $1800 of surplus child tax credit. So I find it hard to believe the poor are paying too much in taxes if they are anywhere near the same boat as me.

> Most people simply say "I can spend until my bank account is empty".

I don't think this comes down to just individual discipline/budgeting either. If you rejiggled things to that people who live paycheck to paycheck suddenly have non-zero amounts of money in their accounts for most of the year, I bet you'd suddenly see cost-of-living prices/rent adjust upwards so that they're living paycheck to paycheck again, except then they're fucked when taxes are due. Landlords etc aren't gonna leave money on the table.

IRS actually has a documented policy on the "12-check plan":

https://www.irs.gov/pub/irs-tege/409a_presentation.pdf

Wonder how many teachers understand that the net financial effect amounts to a zero-interest loan from themselves back to the school district?

That example teacher is very well compensated.

And what proportion of taxpayers would be sufficiently disciplined to make sure they have funds on hand to write that check at the end of the year (or quarter, or month)?

Maybe you'd have the foresight to get a 6-month CD, then pay your tax with the money at the end of that period (and pocket the interest), but the majority of your compatriots would have long since spent it -- whether on healthcare or a holiday in Vegas, either way it's gone.

This is what I do but I work for myself. Withholding is easier as most people would prefer to watch Tom Brady throw touchdowns vs manage their money.

I felt this way until I asked a tax accountant who said that the majority of taxpayers are just not capable of this discipline, planning, or in some cases math.

That's the entire point though. Those people presumably vote on tax policy, and have zero clue what they pay.

If the majority of the country were constantly being hounded by government tax collectors for being past-due, there would be very little political support for raising taxes in the future.

Right now it's an imaginary percentage the vast majority have no clue of. Ask 10 people in various social circles in your life what their all-in tax rate is. Almost zero will know, and those that think they know are often wildly wrong.

This isn't pleasant, but it's true. It wouldn't take many tax cycles of widespread IRS debt for average people to start pushing for lower taxes. It also might make people realize that 44% of Americans pay no income tax (source: https://www.marketwatch.com/story/81-million-americans-wont-...). Even accounting for children, that's a lot of people not contributing. It doesn't have to be a lot, but the average American will care a lot more about politics and about frivolous uses of their money when they've got some skin in the game.

For reference, the average American taxpayer pays over $10k in taxes (https://www.usatoday.com/story/money/personalfinance/2017/10...), which is roughly a 14% rate by the same source. How crazy is that? Americans will be much more willing to push for massive tax cuts after they realize that $10k is being stolen from them every year.

I feel similarly about incomes; employers ought to write a single check all at once. You get paid on Jan 1st and that's it. Perhaps as a stretch goal we can aim for decennial paychecks.

In seriousness, a steady flow instead of a lump sum has benefits for both sides of the transaction.

For example, I shudder to imagine what shopping sprees politicians might engage in, were they bequeathed with the nation's entire yearly budget in one day!

> For example, I shudder to imagine what shopping sprees politicians might engage in, were they bequeathed with the nation's entire yearly budget in one day!

The USG has more flexibility with spending relative to liquid resources than pretty much any entity in the world. I can assure that having tax receipts directly in the bank has nothing to do with the way we spend and would have even less to do with the psychology of our representatives

No offense but I'm not prepared to inform my policy opinions on the basis of your assurance.

We're rather far from discussing any substantive changes in policy, leaving aside the fact that you only have a single vote to cast.

This is an incredibly bizarre response to someone making the case that you have a factually inaccurate model of the way policy works. On the other hand, I appreciate your comment in that the psychology on display here is another data point in helping me understand the psychology of how an ostensibly voter-driven government can be so consistently stupid and backwards: If people's response to "you're misunderstanding how this works" is effectively "my opinion is as important as any fact"

someone making the case that you have a factually inaccurate model of the way policy works

Your case was basically "trust me, I'm right".

He's unfortunately right. I would like to think that slowly disbursing funds over the course of a year would help, but it doesn't. The feds have essentially unlimited capacity to borrow, as evidenced by their constantly running a deficit. It also makes things more expensive in terms of paperwork/administrative bloat on the part of the government, employer, and consumer.

> Withholding is an awful idea designed to favor the government over the taxpayer

I like taxes being withheld from my paycheck. Dealing with taxes can be incredibly confusing, and it's super easy to screw up. If I could choose between taxes being withheld and making payments on my own, I'd seriously consider having the money withheld.

> I like taxes being withheld from my paycheck.

I'm glad you prefer it. With that said, it ought to be a choice for those who prefer it, not a mandatory procedure. This is especially true in that it makes the taxpayer less likely to realize just how much he is paying. Quote from the Treasury: "it... greatly reduced the taxpayer's awareness of the amount of tax being collected, i.e. it reduced the transparency of the tax, which made it easier to raise taxes in the future."

Source: https://en.wikipedia.org/wiki/Tax_withholding_in_the_United_...

People pay way too much, and breaking it up into little payments makes them less likely to realize this. It's the same reason salesmen offer it for expensive purchases (cars, iPhones): low payments of $100-$400/mo are much more appealing than a big check all at once.

> Withholding is an awful idea designed to favor the government over the taxpayer

I don't understand this claim. Why wouldn't be the baseline be to pay tax on taxable events as they happen (ie per paycheck)? This seems completely reasonable to me.

I don't even see how it softens the psychological blow: again, the baseline of "every time I get paid, I lose X amount of taxes" seems like a pretty reasonable visceral signal of how much you're paying.

Quote from the Treasury: "it... greatly reduced the taxpayer's awareness of the amount of tax being collected, i.e. it reduced the transparency of the tax, which made it easier to raise taxes in the future." (https://en.wikipedia.org/wiki/Tax_withholding_in_the_United_...)

Same reason payment plans are offered for cars and iphones. Technically, many people are payed by the hour; should they have to immediately pay tax? Yearly taxes were the norm for a long time, and helped keep resentment of taxes high. It also led to a drastically reduced paperwork burden, which was cheaper for the government, businesses, and consumers.

> Quote from the Treasury: "it... greatly reduced the taxpayer's awareness of the amount of tax being collected, i.e. it reduced the transparency of the tax, which made it easier to raise taxes in the future."

Sorry, that may have been unclear. I don't doubt the psychological effect is greater when it happens in a lump sum. I'm saying that it's just as easy to say that people overestimate their taxes when they pay in a lump sum and accurately estimate them (at a per-paycheck level): there's nothing about once a year that's special and justifies privileging it.

> Technically, many people are payed by the hour; should they have to immediately pay tax?

No, they're not. Their pay is measured by the hour, but they are _paid_ on different schedules (eg once every two weeks), at which point they're debited for the tax (in that they receive net pay). I don't see how anything else wouldn't be the reverse of having a large refund: ie, an interest-free loan from the government to the taxpayer.

> It also led to a drastically reduced paperwork burden, which was cheaper for the government, businesses, and consumers.

This is belied in the part you elided from the quote you pulled. from the same sentence:

> "This greatly eased the collection of the tax for both the taxpayer and the Bureau of Internal Revenue. However, it also greatly reduced the taxpayer's awareness of the amount of tax being collected, i.e. it reduced the transparency of the tax, which made it easier to raise taxes in the future"

Also, I'm not making the claim that there's no pragmatic argument for annual payments (though I personally disagree). My complaint was that part of your argument rested on treating annual payments as arbitrarily natural and measuring the downsides of withholding from that flawed perspective.

Canadians with their great health care system seem to think that they need ~250K salary/year to feel comfortable [1] So most people are either too desperate or aspiration too high that no government in the first world can make them happy.

1. https://www.huffingtonpost.ca/2018/11/03/average-salary-cana...

Comfort and “being alive” are different.

And Canadians think they need $750k for retirement - are they expecting to retire for three years and then die?!

https://business.financialpost.com/personal-finance/the-magi...

Are you saying that people would blow through $250k/year? lol

Does everyone spend 100% of their salary, no matter how large it is?

I need to recheck my W-4. As far as I know, I pick the right things there and still get a stupidly large refund.

Make sure you've done 2018 taxes first. For a lot of us the total tax owed went up by some amount while the withholding went down. And just put whatever additional net shows up in your account somewhere for next year.

Why are they over-withholding?

In Canada, people wait much longer than Americans do for ordinary diagnostic tests.

https://www.fraserinstitute.org/studies/waiting-your-turn-wa...

Rationing access to healthcare is not the answer.

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