AMAC Action In The Media / Politics

The New HSA

President Elect Donald Trump has said he will replace Obamacare by using Health Savings Accounts (HSA’s). What will these new HSA’s look like and how will they work? While present laws would have to be altered and various scenarios could be used to create the ultimate Health Savings Account, there is a strong likelihood the final version would be a simple plan composed of three parts: a local primary care provider, a savings account and a high deductible insurance policy to cover major expenses.

The HSA would act like a funnel receiving all contributions, including payments from an individual, from an employer, and from those receiving government assistance. The HSA would automatically make a monthly payment to the Primary Care Physician and the catastrophic insurance policy, with the balance being deposited in the savings account.

The first part of the New HSA would pay for a Direct Primary Care Physician. Direct Primary Care is where the patient (or HSA) pays a monthly fee for basic medical services directly to the doctor. Each patient would select a local participating doctor or practice for routine office visits, annual physicals, annual vaccinations, and various tests. There would be no copayment and no deductible for this care, although some additional tests performed in the office might require a small discounted fee.

The second component of the New HSA would be a savings account. The purpose of the savings account is to accumulate money on a pre-tax basis to pay the deductible for surgery or other medical bill not covered by the Direct Primary Care Doctor. The savings account would build up over time and part of those funds could eventually be used for retirement.

The third and most critical part of the HSA is a high deductible Catastrophic Insurance policy.  The deductible could start at $6,000 and be raised to $10-15,000 after the savings account builds up.

Why Direct Primary Care

DPC practices are popular because they allow doctors to spend their time with patients, instead of doing clerical or administrative tasks. As a result, physicians earn more income which is especially important at a time when many doctors are retiring or leaving medicine. In addition, these practices typically have lower operating costs, enabling savings to be passed on to the patient with lower fees. Conversely, the Affordable Care Act increased the regulatory burden for family physicians, but now the Direct Primary Care model all but eliminates them.

Doctors are opening Direct Primary Care practices or converting their present practices into Direct Primary Care offices at an astonishing rate. In 2005 there were only 140 practices, by 2014 there were 4,400 according to a report from the Heritage Foundation, and that number continues to increase.

Why Savings Account

The “Savings Account” within the HSA is simple. A portion of the deposit into an account is directed to savings. Those funds are reserved to pay for the insurance policy deductible or copayment. Should a patient require a surgical procedure before the funds have grown to cover the deductible, an automatic loan provision is activated to cover the shortage. The loan is paid off with future deposits.

Why High Deductible Plan with Cost Savings                  

The HSA is able to do something that Obamacare could not do: reduce medical care costs! It accomplishes that amazing feat in several ways. First, the Direct Primary Care component will lower the number of visits to the Emergency Rooms at hospitals. Since there is no charge to see their local doctor, patients will learn to see the doctor at the first signs of trouble. According to the Medical Expenditure Panel Survey a typical visit to the ER costs $703.

Direct Primary Care practices cover many services in their offices either at greatly reduced costs or via included in the basic monthly fee. (see chart). For example, a DPC practice in Florida charges $4.50 for a urology test compared to the area hospital that charges $231.79.

* This is an example of a typical Direct Primary Care Savings where the total charges represent 98% savings on the Hospital ER charges. This also allows Hospital ER’s to be utilized for their intended purposes – to render treatment of injured people and those afflicted with sudden, severe illness.
Note: These are actual charges by a Direct Primary Care practice in southwest Florida.

Another way medical care costs will be lowered is with preventive care. When the doctor knows the patient he or she will be aware of changes in the patient. A suspicious mole, for example, would be noticed early as possible cancer, not only reducing costs but more importantly, saving the patient’s life.

The approximate monthly cost of an HSA for a couple, age 35 in Florida would be: $125 for local doctor, $150 Savings account and $325 for high deductible insurance. At $600 per month with an employer paying half, we can have truly affordable health care. The free market competition allowing a patient to shop for services will likely serve to moderate any pressure to raise fees.

The new Health Savings Account, if properly constructed and administered could easily be phased in for groups and individuals to replace Obamacare. It will provide much improved benefits with a realistic opportunity to control health care costs.

Dan Weber is the President and Founder of the Association of Mature American Citizens (AMAC) with 1.3 million members. He has 35 years’ experience in the health Insurance field.

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Diane Fisher
1 month ago

I don’t think government or any type of government-involved savings plans should be involved in anyones’ medical care. Medical issues should be between patient and doctor. Period. The only time government should be involved at all is if a person does not have money for what they need and the cost is too much for their local church to help them with. We should ALL want LESS government intervention in our lives because “government” does not care about individuals. Government only cares about taking more from the people to feed government’s own desires to control and own everything in sight. Get government out of medical care. Get government out of peoples personal savings plans. Get government out of everything except protecting our borders, negotiating with other countries, and solving issues between individual states. This government that is imposing itself in every aspect of the peoples lives, including the VERY AIR WE BREATH and PEOPLES PRIVATE BUSINESSES is not what the Founding Fathers intended, and in fact it is what they attempted to PROTECT us from! Thank you for asking.

Tom singler
6 months ago

HSA will work if you make it easier to use. The problem I have had is that the HSA people question it almost every time I used it. It was just a pain in the ass to use and explain and prove what I used it for. If it is medical, it should be covered.

L D
7 months ago

What happens to self employed people under 65 that make less than 50K per year???? We just pay 600$ per month??? And still have a major deductible for things like a knee replacement?? Hhhmmm???

Jo
1 year ago

No way we can afford this. We are over 50 and only husband works a hard, low wage job. We are already having to get food from a food bank, my roof is leaking, our dental problems hurt at times, I need back surgery in 2 spots and Obamacare had me suffering for 8 years because of a high deductible.
I pray every day for President Trump to save us aging lower middle class that can barely eat and make our property tax.
I guess I was wrong to put my faith in healthcare relief, not more hands grabbing into my already empty purse

Eric Cruz
1 year ago

As a retired Firefighter I have to remain on my insurance for 10 years because of the Cancer Presumptive Law that requires we remain on our insurance and this would cost me $1500 a month, eating half of my retirement salary. What say you ?

Freud
1 year ago

HSAs suck. There are too many rules and only people with high deductible insurance plans are currently eligible to have them. Also, they have to be kept with a bank that charges monthly fees on them that eat up the value of them. I am against HSAs as a solution to health care costs. There has to be better solutions that HSAs.

MmeMoxie
1 year ago

I don’t like this plan, at all. It is too much like Obamacare. Someone asked, “What about Medicare patients???” Those of us who have Medicare Advantage Plans are truly on a Fixed Income … Meaning, we do NOT have the extra money needed for an HSA … Period, end of quote. Once again … All of the politicians are creating a Healthcare Plan and making guidelines to do THIS and THAT … Without ANY INPUT from the Healthcare Professionals, Hospital Associations, and truly the Health Insurance companies. You can’t REFORM Healthcare without good, solid input by all of Healthcare people, hospitals, insurance and products. Also, someone has said that this is STILL under US Government control and the US Government is well known to FAIL in keeping track of things and has a lot of FAILED Agencies and Organizations.

FAILED Agencies and Organizations:

1. The US Postal Services

2. The Railroad System – Amtrack and so on

3. Medicare

4. Medicaid

5. SNAP

6. WELFARE

7. The FDA – Not able to lower drug costs for everyone

8. SALLIE MAE – FANNIE MAE – FREDDIE MAC

And so on and so on …

To have true Healthcare Reform … It must be “shakened up completely” and totally revamped. It will NOT be easy, but it MUST be done. One other issue in Healthcare Reform … MENTAL HEALTHCARE!!! The amount of Mentally Ill patients that have been “kicked out” of a Mental Health Hospital due to that facility being CLOSED DOWN permanently is beyond concept. Way too many are living on the streets of large cities … HOMELESS!!! They need to be in a hospital where they are well taken care of and given their medicine on time and throughout the day!!!

Do I have any solutions… No … But there are many Healthcare Professionals that do have solutions and know what they are talking about. They fight the Insurance Companies daily for their patients. They are fighting for the drugs the patients need or trying to get paid for doing right by the patient after a procedure or just simply trying to get the “go ahead” on a surgical procedure and on and on and on …

I worked in the Surgical Field for over 25+ years proudly and saw so many things that were not right. I mean right for the patient. I also worked for an Othropedic Surgeon and had to get the “clearance” to go with surgical procedures that patients needed. There were many times when I had to ask the surgeon that I worked for to talk to the Insurance people to get “approval.” No patient should have to file a “grievance” for an appeal when all of the guidelines were followed, it is wasted time and energy for all involved.

These are my thoughts on this issue and I do know that many Healthcare personnel across the USA are not happy either.

James
1 year ago

Sadly most persons that have Medicare, as I do, could never afford to enjoy the benilefits of a HSA. I also didn’t see anything mentioned about perscription drugs such as covered or not and possible costs, nor durable medical equipment was spoken of, unless I missed some of the points that were made.

Greg Russell
1 year ago

Here`s the problem with all of this: government has zero authority per the United States Constitution to own, direct, provide or mandate healthcare. Period. And the Founders agreed:

In 1794, when Congress appropriated $15,000 for relief of French refugees who fled from insurrection in San Domingo to Baltimore and Philadelphia, James Madison stood on the floor of the House to object saying, “I cannot undertake to lay my finger on that article of the Constitution which granted a right to Congress of expending, on objects of benevolence, the money of their constituents.”
-James Madison, 4 Annals of congress 179 (1794)

Claire
7 months ago
Reply to  Greg Russell

 

Claire
7 months ago
Reply to  Claire

So did anyone do anything for these refugees?

P K
1 year ago

What is the current status of this plan? This article is two years old. Does AMAC keep up with President Trump’s efforts for health care reform?

Cindy Schiller
1 year ago

This sounds like a better plan for all ages. I hope it gets passed.

Ed Gauler
2 years ago

Most points here are spot on. The trouble with most issues is not having enough money after paying obligations to invest in anything. The wages paid today are 1980’s level in 2019. The latest example of inequity is that there are 26 individuals who have more wealth than 5.6 billion other people combined. The 1% elites have caused the government to borrow money to fund programs that placate the masses, this is in lieu of paying higher taxes, for everyone, rich and poor alike. It appears that people would trade every freedom they have for health care and college, as depicted by the last congressional election. I don’t see this program having more than 20% support.

Michael Miller
2 years ago

Michael
I like the plan also. BUT we are still waiting and after the mid term results, it seems unlikely anything will actually replace Obamacare which is anything but affordable for those of us that actually work and pay taxes.
I feel it is now or never and it seems obvious to any person whose taxes and medical expenses continue to rise.
I’m normally not one to add to these conversations, just thought it needed said.
What is going to be our grandchildren’s United States of America?

David
1 year ago
Reply to  Michael Miller

You just stated all my thoughts exactly

Glenn Rsmyr
2 years ago

I really like this plan. I think it’s a great start

Dan
2 years ago

Why are HSA’s still not allowed for people on Healthshare plans that are recognized by the government as acceptable health plans?
We have had a recognized healthshare plan for our healthcare costs for a few years now. We switched to it when I went a number of months between jobs rather than pay the unconstitutional Obamacare penalties or extremely high Obamacare healthcare choices. Healthshares have been lobbying for the ability for its members to use HSA’s for sometime. It makes no sense they have been denied thus far when they are a high deductible healthcare provider by definition. Healthshares are not insurance, they are high deductible member share pay. I can say I am pleased with hjow well a good healthshare works after an injury my wife sustained that required some high expenses that our healthshare handled terrifically. I have an existing HSA from a previous job provider but I am not allowed to add money to it since I lost that plan and because the government still has not allowed high deductible healthshares to be included for HSA contributions. It makes no sense and needs to change so we can put our own money aside for medical use.

David Van Vark
1 year ago
Reply to  Dan

Thanks for letting me know about this. It does seem like a no brainier to me too. As sad a condition as our legislators are my mind just naturally wonders what are the names of the people getting paid off to not fix this entire issue

Dave
2 years ago

I have been a proponent of exactly the ideas that Mr. Weber puts forth in this article. The only enhancement I would add is to encourage the growth of cash-only surgical centers which are proving that high quality surgery can be performed at lower prices than we currently see currently. This is accomplished by posting prices for procedures online and by requiring cash which by-passes the overhead of paperwork and dealing with government or insurance companies. As pointed out in this article when the paperwork diminishes so does the overhead. The doctor has more time to spend with patients and provide services at lower cost.

Hank
2 years ago

The main reason for going to the emergency room or to urgent care is because your doctor doesn’t have an opening. And, what happens if you need a doctor while you’re away from home? Is there a network? Does your Direct Primary Care Doctor foot the bill? It’s a step in the right direction, but there is a lot not covered in this article.

DrZ (not a physician)
3 years ago

Some of the problem with high health care is us. One of the ways we encourage higher prices is that we have been trained to demand first dollar coverage. All of us have hear the analogy about oil changes. You buy car insurance for catastrophic events, accidents, theft, etc. Can you imagine how expensive car insurance would be if we demanded that the insurance companies paid for oil changes – it would go up, a lot. It’s the same for medical care. We want insurance companies to paid everything thinking we are getting something for free. We are not. We pay for this “want” in higher premiums.

This is where the HSA comes in because it allows you to pay first dollar out of your account. In the case of Direct Primary Care, it allows you to pay a monthly fee to a doctor and receive unlimited services offered by a primary care physician. This keeps everyone’s cost down and allows the doctor to make a living free of government and private insurance paper work and conformance.

I would like to see Amac cover some more features of the HSA:
– Is the HSA part of a person’s estate. Can heirs inherit an HSA in HSA form or in cash?
– Can *anyone* contribute? The holder of the HSA, the employer of the holder, the government, parents, charities, etc.?
– Will contributions be limited on an annual basis?
– Is investment growth within an HSA tax free?
– Are contributions to an HSA tax free? (what does “pre-tax” mean?)
– What insurance do we have that state and federal regulators will not micromanage HSAs?

Furthermore I would like to see Amac spread the word beyond its membership if this is possible. The nascent DPC community and HSAs need all the help they can get.

I would also like to see some articles by Amac on cash-only surgical centers which are proving that surgery can be much less expensive at these centers than at hospitals with success rates that equal or exceed large hospitals.

Francis Pan
3 years ago

This seem like a very good plan. Will the doctors and hospitals sign on to this? I am fortunate that I never had to sign on to Obamacare, but my Medicare cost, which are deducted from my Social Security checks, has more than doubled. Will this plan help to reduce that?

DrZ (not a physician)
3 years ago
Reply to  Francis Pan

Hospitals will not likely sign onto this plan, at least those who have large staffs of salaried physicians. In a DPC world, there is no reason for primary care physicians to associate with hospitals in the way they do today. The DPC model would allow physicians to strike out in their own offices, or more likely work with a small number of other DPC physicians in a small co-op.

Hospitals want to keep a leash on everything from scanning equipment to primary care physicians – it’s their bread and butter.

Peter Musitano
3 years ago

I am retired and over 65. Thr new HSA sounds great for younger people but it does NOTHING for seniors on Medicare. I would like to see tax law changed so all necessary medical expenses were tax deductible with no minimum expense threshold. That would benefit everyone.

DrZ (not a physician)
3 years ago
Reply to  Peter Musitano

Would you be happy if medicare gave you a slug of cash in an HSA plan if you signed a waiver that you would have a limit placed on your medicare use that is more restrictive than otherwise, or perhaps if you were satisfied by he magnitude of this slug, you might forego all future demands on medicare? This slug of money would be used by you to start a DPC plan and buy high deductible insurance.

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