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September 11, 2006

You Don't Say

From a new General Accounting Office report on HSAs:

HSA proponents see the accounts as a way to incentivize account holders to shop carefully for health care services, but GAO did not find that to be the case in questioning members of focus groups. "Few participants researched the cost of hospital or physician services before obtaining care, although many participants researched the cost of prescription drugs," the report found.

"Participants said they would recommend HSA-eligible plans to healthy consumers, but not to people who use maintenance medication, have a chronic condition, have children, or may not have the funds to meet the high deductible," GAO said.

This would seem to confirm the fears of detractors: The plans aren't spurring more cautious health decisions, and are far better for the healthy than the sick. For now, my guess is that most adopters don't know that, and so those actually switching to HSAs are doing so for a mish-mash of reasons. If it becomes better known that HSAs advantage the young and well, healthy folks could flee traditional plans and risk sharing could disintegrate. I guess we'll see.

September 11, 2006 | Permalink


Remember, President Bush said that HSA plans are the wave of the future, and he is the only person in human history to be absolutely correct every time he speaks. Also, I heard that a Democratic mayor in a small town somewhere once cheated on his bowling score. Some people you libs are.

Posted by: Ron Greeder | Sep 11, 2006 5:38:07 PM

Wait, wait! The participants say the plans are good for healthy people, bad for sick. Isn't that the opposite of what you say? Are you confused or am I?

Posted by: David in NY | Sep 11, 2006 5:39:16 PM

far better for the sick than the healthy

Did you mean this the other way around?

Posted by: Neil the Ethical Werewolf | Sep 11, 2006 5:39:32 PM

The core problem is cost and without competitive shopping on the part of the participants, there is no incentive for providers to contain costs. So, now the question becomes "How do we get consumers to make value choices?"

All Ezra does is say "Well, that didn't work..fuck it, let's have big government one-payer." What Ezra should be doing is finding a solution to the core problem.

Posted by: Fred Jones | Sep 11, 2006 6:17:00 PM

If we wanted to help taxpayers out with health care expenses, we could make all medical expenses tax deductible.

If we wanted to encourage people to save for healthcare expenses, we could allow the accounts to last more than a year, or have year-end leftovers returned to the saver (at the taxed rate, naturally).

Instead, we ask people to gamble on their health. Guess your expenses will be higher than they are, and you end up saying "crap, it's December and I have two hundred bucks left in my HSA, lemme buy a new pair of glasses and stock up on Tylenol." Guess low, and you'll pay more for care.

What HSAs are is a giveaway to companies like Paychex, which takes a cut for handling the programs.

Posted by: Aaron | Sep 11, 2006 6:18:32 PM

As Neil's already pointed out, you reversed "sick" and "healthy" in one sentence.

Encouraging healthy people to bail on traditional insurance is the whole point of HSAs. They're like school vouchers: an attempt to wreck a system buy skimming off the cream (healthy consumers; children with achievement-motivated parents). Every time a right-winger suggests a program, the operative question should be: "How does this help the rich by screwing the rest of us?" Their proposals make a lot more sense with this analysis.

Posted by: Rebecca Allen, PhD, ARNP | Sep 11, 2006 6:53:21 PM

And if Ezra thinks single-payer (or, more accurately, high-floor multipayer) is the answer to the problem?

Posted by: Ezra | Sep 11, 2006 7:00:48 PM

Ezra, here's something I've been meaning to ask you about. I see how single-payer cuts costs by eliminating lots of insurance bureaucracy. Why don't the costs come back in a multiple-payer system with a high floor? Is it that only a few people will be buying insurance from private specialty vendors, so the costs of the multiple-payer system will be minimized?

Posted by: Neil the Ethical Werewolf | Sep 11, 2006 7:19:29 PM

In a French-style system, the floor is primarily provided by the government. In any case, the administrative costs are a bit complicated (while a good talking point, I'm becoming increasingly convinced they're an apple-to-oranges comparison), and they don't even save all that much. While I'm convinced that moving towards am ore government-run system will get us better returns on our health care dollar, I'm far from convinced we'll be spending fewer health care dollars.

Posted by: Ezra | Sep 11, 2006 7:35:08 PM

without competitive shopping on the part of the participants, there is no incentive for providers to contain costs.

This is the Big Lie at the core of Fred's thesis.

Posted by: NBarnes | Sep 11, 2006 8:00:03 PM

On the bonus side, Fred Jones and Ron Grenier have taken up residence so crazy libs don't get the idea there would be no opposition to proposals where, like mechanical engineering suggests, form ( organizational base ) follows function.
Anyone who makes an argument about sick/dying/confused/desperate( Yah,disparate too) people "incentivized" to do anything deserves to be thought of as a babblegaffingbullshitter. That's being charitable.

Posted by: opit | Sep 11, 2006 9:03:28 PM

I actually meant to use the combined prefix "baffle-gab" : "babble" and "gaffe" don't look too far off, however.

Posted by: opit | Sep 11, 2006 9:09:02 PM

ezra, Liberals shy away from the HSA like vampires to the cross. What are you doing?

Neil: You should just throw in the towel and quit. You can't win. LOOK at what you said, "Why don't the costs come back in a multiple-payer system with a high floor? Is it that only a few people will be buying insurance from private specialty vendors, so the costs of the multiple-payer system will be minimized?"

Your answer in NO.

You two remind me of poodles. That isn't all bad I guess. Nobody is ever going to repeat what you say because you have "Non-Transferable Skills." You will never be able to harness the power of a popular movement with this drivel, sorry.

Unbind your minds. Like President Bush says, "You have to get rational." ezra you already know that the tax-free HSA is the doorway to the 21st Century Financial Service Sector, get real. Someday people will make more each year in tax free growth, in their HSA, than you will working for a living.

My HSA balance is bigger than most because it is the oldest. However, at first I was too scared and only took tax free interest. I was too timid. That faulty timidness has been correct. I now have my tax free HSA balance in one stock, so I'm safe. I gave myself a choice of UNH or AIZ. I know you ezra and Neil would go with UNH at $51.60 per share. I would go with AIZ at $52.67. I know it costs a bit more but you get what you pay for. UNH is part of the old economy and last year the stock was about $50 a share and the P/E is 19.33. In contrast, AIZ is part of the future economy even if they do own the oldest health insurance company in the country. Last year at this time AIZ was at $37 and the P/E is 12.69.

If you had $20,000 in your HSA in 2010 and your stock went up 20% you would have a big smile on your face in 2011 with a $24,000 HSA balance. Then we would have a pair of grinnin' poodles saying, "I made more in tax free growth in my HSA than the expense of my health insurance last year."

But Neil doesn't understand taxes so he would probably spend some of his HSA balance on his dentist. That would be foolish Neil. I mean, if you could take $100 out of your 401k, that is growing tax deferred, would you? Neil probably would whip out his 401k VISA if there was such a thing. The problem with the HSA is that there are too many choices. Neil has immediate access to HSA balances, it's the law. So every chance Neil gets he will be draining his balance screaming, "Dude, I feel empowered. I wish I would have voted for President Bush and the Ownership Society. Thank goodness my guy was such a loser."

ezra, do you really want to argue with every single financial institution in the future about how rotten their tax free savings accounts are? That sounds like a bazaaar plan for a pair of poodles. What will you argue about next? I know, "All 401ks and IRAs are old-boring taxed-accounts but we don't like those savings accounts either. Down with all Americans who try and save a greedy buck for retirement."

President Bush is coming to meet with my brand new guy in Congress next week, right here in Tampa Bay. I wish I wrote the President's speeches because I would have him say, "Got the Blues? Paying way too much and feeling bad? I feel your pain on those expensive and dangerous employer-based health insurance plans. You must be frightened. Be like me. I enrolled into a tax-free HSA, 8 years to the day, behind Ron's HSA. Now I understand that the HSA stops Socialized Medicine dead in its tracks. Before I go I just want to say, get your HSA from where the palm trees sway. Maybe you knew that America's oldest HSA sales team is located in tampa Bay. I would go there and don't delay. Its like a government special on tax free money."

But of course I couldn't get that lucky.

Come here little puppies.

Posted by: Ron Greiner | Sep 12, 2006 7:47:21 AM

ezra, LOOK at this FOOL. ezra hsaNewsFlash:

//The Price of Cheap Insurance
By Tim Beyers (TMF Mile High)
September 11, 2006

A few weeks back, my fellow Fool Anders Bylund spilled plenty of digital ink praising the virtues of Health Savings Accounts, or HSAs. His thesis, in a nutshell, was that the higher premiums that come with more comprehensive plans do more to pad the pockets of insurers than to protect the families they're supposed to cover.

He's mostly correct; HSAs can be wonderful, in that they allow you to pay common expenses in pre-tax dollars and invest the remainder in interest-bearing savings, bonds, or even blue-chip stocks such as General Electric (NYSE: GE), UnitedHealth Group (NYSE: UNH), or Aetna (NYSE: AET). But "can be" is the key catchphrase, Fool. Not all insurance plans are created equal, especially if -- like Anders and I -- you're among the millions of self-employed Americans...."

Too funny. This self proclaimed fool sure knows what to call himself. He just doesn't stop with a little stupidity but he must go all the way.

You're smarter than this guy ezra. Shoot, Neil is smarter. This fool loves the "security of COBRA."

Posted by: Ron Greiner | Sep 12, 2006 8:11:06 AM

Like President Bush says, "You have to get rational." ... If you had $20,000 in your HSA in 2010 and your stock went up 20%... in 2011

Who's being irrational now? 20% return in a year? Only someone delusional or a con-man would claim this has any bearing in reality.

Ron, the ineffectiveness of HSAs can be summed up as follows-- when people need treatment, they want to be able to go to a doctor and get it taken care of. They don't want to run a miniature insurance company out of their homes.

Posted by: Constantine | Sep 12, 2006 8:12:36 AM

ezra: Start attacking these people from Des Moines, Iowa.

ezra hsaNewsFlash: //DES MOINES, Iowa--(BUSINESS WIRE)--Sept. 11, 2006--As consumer driven healthcare continues to expand at a rapid pace, The Principal Financial Group(R) is setting out to educate brokers on the state of the health care industry and advancements in new products such as health savings accounts (HSAs) and wellness programs. For the third year, leaders from The Principal(R) will tour the country, holding seminars in eight cities.

"Brokers are on the front lines of the health care transformation as the focus begins to shift from a sick care system to one that promotes and encourages good health care," said Jerry Ripperger, director of consumer health for The Principal and presenter of the seminar. "We're touring the country again this year to arm brokers with the tools and information they need to provide valuable counsel and effective health benefit programs for their clients." //

ezra, maybe you, Neil and I should go listen to the pioneer in HSAs. Principal has a few billion. They used to be a competitor in Individual Medical before they threw in the towel and gave their block of business to Mutual of Omaha. Then Mutal of Omaha gave up too. Those poor battered clients.

Now there just isn't much choice when it comes to Individual Medical in America.

Posted by: Ron Greiner | Sep 12, 2006 8:24:10 AM

Even if you were 100% correct, you would still sound like a retard. I thought salesmen were supposed to be good at communicating things to people?

Posted by: Adrock | Sep 12, 2006 9:33:51 AM

Man (Eric Idle): You sit here, dear.
Wife (Graham Chapman in drag): All right.
Man (to Waitress): Morning!
Waitress (Terry Jones, in drag as a bit of a rat-bag): Morning!
Man: Well, what've you got?
Waitress: Well, there's egg and bacon; egg sausage and bacon; egg and spam; egg bacon and spam; egg bacon sausage and spam; spam bacon sausage and spam; spam egg spam spam bacon and spam; spam sausage spam spam bacon spam tomato and spam;
Vikings (starting to chant): Spam spam spam spam...
Waitress: ...spam spam spam egg and spam; spam spam spam spam spam spam baked beans spam spam spam...
Vikings (singing): Spam! Lovely spam! Lovely spam!
Waitress: ...or Lobster Thermidor a Crevette with a mornay
sauce served in a Provencale manner with shallots and aubergines
garnished with truffle pate, brandy and with a fried egg on top and spam.
Wife: Have you got anything without spam?
Waitress: Well, there's spam egg sausage and spam, that's not got much spam in it.
Wife: I don't want ANY spam!
Man: Why can't she have egg bacon spam and sausage?
Wife: THAT'S got spam in it!
Man: Hasn't got as much spam in it as spam egg sausage and spam, has it?
Vikings: Spam spam spam spam (crescendo through next few lines)
Wife: Could you do the egg bacon spam and sausage without the spam then?
Waitress: Eewwww!
Wife: What do you mean 'Eewwww'? I don't like spam!
Vikings: Lovely spam! Wonderful spam!
Waitress: Shut up!
Vikings: Lovely spam! Wonderful spam!
Waitress: Shut up! (Vikings stop) Bloody Vikings! You can't
have egg bacon spam and sausage without the spam.
Wife (shrieks): I don't like spam!
Man: Sshh, dear, don't cause a fuss. I'll have your spam. I love it. I'm having spam spam spam spam spam spam spam baked beans spam spam spam and spam!
Vikings (singing): Spam spam spam spam. Lovely spam! Wonderful spam!
Waitress: Shut up!! Baked beans are off.
Man: Well could I have her spam instead of the baked beans then?
Waitress: You mean spam spam spam spam spam spam... (but it is too late and the Vikings drown her words)
Vikings (singing elaborately): Spam spam spam spam. Lovely spam! Wonderful spam! Spam spa-a-a-a-a-am spam spa-a-a-a-a-am spam. Lovely spam! Lovely spam! Lovely spam! Lovely spam! Lovely spam! Spam spam spam spam!

Posted by: I'm Not Ron Greiner and This Isn't Spam | Sep 12, 2006 9:57:59 AM

Can't get 20% growth. The words of a clown.

$37/share 12 months ago and $52 a share now.

That's almost 20% tax-free growth isn't it?

Remember guys, you don't need a group to have a plan.

Posted by: Ron Greiner | Sep 12, 2006 10:24:03 AM

Oh No - maybe you guys are right with UNH, it is up today to over $52/share. Its probably that goofy FOOL story today.

Trust me, I'm right and the Motley FOOL is wrong.

Posted by: Ron Greiner | Sep 12, 2006 10:31:09 AM

Look what Kevin Combest writes:

//What has the GOP done in the last five years on those fronts that the libertarian wing would appreciate?

Sager: At the risk of sounding a bit harsh: nothing. OK, next to nothing. Taxes have been cut, but when you explode spending at the same time, you’re just guaranteeing a future tax hike. The health-savings accounts tucked into the Medicare bill may yet prove to be a significant free-market reform of health care, or at least the seeds of one, but they could have been won at a less drastic cost. Other than that...."//

Don't vote Libertarian because they can't see the big picture. The MSA was the bright-white-light before the ShockWave of reform. Which leads us to where we are at present.

Duck and cover, ShockWave due soon.

Posted by: Ron Greiner | Sep 12, 2006 10:44:43 AM

how can you expect people to be rational about their own life and death- because when you are talking health care that sums up most people's thinking.

Posted by: akaison | Sep 12, 2006 11:23:02 AM

Ron Greeder: the Billy Mays of HSAs.

Posted by: ahem | Sep 12, 2006 11:30:33 AM

AIZ UP - $53 (.63% today)

Posted by: Ron Greiner | Sep 12, 2006 11:55:51 AM

When people use my comment threads to tout products they sell, I ban their asses.

But far be it from me to tell Ezra how to run his blog...

Posted by: Tom Hilton | Sep 12, 2006 12:14:57 PM

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