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Comment by ghaff | Hacker News Reader

When I was covered by an employer plan, a lot of people seemed to gravitate towards high deductible plans because they were cheaper so long as you didn't consume a lot of healthcare. (Personally, I never did but a lot of people were adamant that you saved money that way.)

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I’ve long been a proponent of high deductible plans. The part you’re missing is that you also get the opportunity to contribute pre-tax money to a Health Savings Account, which is money that you get to keep (and even invest) over the long term. You can spend that HSA money on medical expenses but if you save it, it turns into another tax-advantaged savings account like your IRA and 401(k).

I agree. I think I just had a very conservative mindset with respect to medical insurance which led me to a traditional plan. HSA would certainly have been a better choice in retrospect given that deductibles were never really an issue.

It's kind of silly they tie these together. Why can't I also open an HSA if I'm on a traditional PPO plan? Or if I have no health insurance as all.

Because a healthcare plan isn’t insurance. You used the correct term. If you want a prepaid healthcare plan that’s fine, just stop calling it insurance since it’s not.

Totally agree it should be available for cash pay.

It's insurance in the sense you have annual out-of-pocket maximums--which is really the key feature for a lot of people. I can cover $5K or $10K for a year but not, say, $100K or more.

HSAs can be wonderful, but you absolutely have to have a good one. Some of them still pay less than 1% interest and charge monthly fees. The ones which can be invested and have no fees are an amazing savings tool.

Indeed—the people who get by far the most benefit out of them are those who can afford to pay for everything without taking money out of the HSA, then claim those expenses much later in retirement (when you can also just start taking money out). To them, it’s another tax-advantaged retirement account, significantly raising their max annual contribution limits.

But--most importantly--it's a retirement account that you can spend early, if you have to, if you have unexpected medical expenses (which is the main reason an otherwise financially responsible person would have unexpected expenses). And in that scenario it's a much appreciated buffer for needing to withdraw money from another retirement account.

But frankly, even if you are spending the money on medical expenses in the same year, you're also getting a lot of benefit out of spending pre-tax rather than post-tax money.

This is true, but you can always roll over an HSA from a bad provider to a better one.

> The part you’re missing is that you also get the opportunity to contribute pre-tax money to a Health Savings Account

Post-ACA, high-deductible and HSA-compatible are not the same thing anymore. In my state, for example, there are no longer any HSA-compatible insurance plans but there are several high deductible ones.

That's unfortunate.

HSA contributions max at $8300 for a family.

If you require care for chronic medical issues, that often not even one treatment. So, the annual numbers might work out, but you're still left with a massive cash-flow issue at the beginning of every year (because there hasn't been time to fund the HSA, you have to float the deductible + co-pays/% up to your max OOP).

And that's assuming your income supports the max HSA contribution in the first place. Maybe after a few years, it balances out a bit, if you're lucky.

You really need to look at how the employer funds it but often those are cheaper no matter what.

I won't argue. I'd have saved a lot of money over the years with a high deductible plan.

not if you have a chronic illness. my wife hits her deductible every year just getting the annual MRI she's required to get.

My high deductible maximum out of pocket is lower than the available other plan's premiums+deductible with equivalent care policies. I save money on a high deductible plan no matter what happens to me medically.

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