Comment by cullenking | Hacker News Reader

Comment by cullenking | Hacker News Reader

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I manage a health plan for our smallish business of 19 employees. We offer "pretty good" health insurance, meaning, we pay around $600 per employee per month for health and dental. It gets worse every year. I am considering moving toward a HSA based plan, because upon analysis, it's actually probably better for everyone involved. The max out of pocket per year is the same, but instead of a $1000 deductible you have a $5k deductible. This works for our business (and I am assuming a bunch of other tech businesses) because our employees are generally young and in good health. It's a cheaper plan, the worst case scenario for an employee is the same, and I can give raises for the difference in price, and once every few years someone will need more than a $1k deductible, but the raise from the last couple years greatly exceeds the one time cost.

Anyway, just trying to frame my logic here, because I don't consider myself an evil employer trying to skimp on health insurance for my employees (which many I consider friends), but an employer that has to approve health plan changes annually which each increase cost by a considerable amount. If this trend continues, each employee will cost $900 a month within 5 years, and the coverage will be half as good. That's $5k a year per employee that I could put into their salaries, while not screwing anyone over on the worst case scenario.

From my perspective, I am unlikely to hit the out of pocket maximum but quite likely to spend more than $1k/year. All the high deductible does is discourage you from seeking care for things before they become serious. Not sure how it worked from the employer’s end, but $5k/year will get taxed at roughly 50% before I see it so it’s not clear whether that will be greater than my out of pocket costs

The missing link here is premium savings. HDHP plans exchange higher deductibles for a nontrivial premium discount. Insurance companies like to assure employers that employees will bank this discount into a tax-advantaged HSA. So the theory goes, a reasonably healthy subscriber will have sufficient savings to meet their deductible.

This falls apart in practice when employees, who are already spread thin financially, elect an HDHP but can't or won't set aside cash to cover expenses.

Late to reply, sorry. Yes there are ups and downs, but you can setup automatic deductions from paychecks straight into an HSA. I haven't done the full analysis and asked everyone at work, but if the trend continues for the next few years it's going to be really hard for a high deductible HSA plan to not come out ahead. Whether or not we eat the extra cost to keep the convenience will be a decision to be made then.

My comment was only to serve as counterpoint that companies aren't all looking at an HSA because they want to screw people over. Many are looking at an HSA based health plan because they are increasingly becoming more attractive as benefits shrink while becoming more expensive. Again, I am friends with my coworkers, my family is on the same health plan, and I have everyone's best interest in mind, and I wouldn't approach the decision lightly. Obviously there are shitty people out there managing employer plans, I don't speak for them!

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