Thursday, April 11, 2013

Stupid IHCNews Tricks

So I'm on the mailing list (correction: I was on the mailing list) of some outfit called IHC News. They send out weekly (?) tidbits about various industry goings-on. Today brought forth this gem:

"HSAs Will Thrive Under the ACA"

Oh, do go on....

"Roy Ramthun, who was the senior health policy advisor to former President George W. Bush and now runs his own HSA consulting company, has done the math and can say for sure that HSAs are most likely not going anywhere any time soon."

Oooh, that's good - if surprising - news.

Oh, wait:

"The problem that HDHP options face is whether they meet this standard by themselves, as it was previously unknown whether HSA contributions could be taken into consideration. To this day, it is still an unanswered question." [emphasis added]

And how, exactly, was this bit of fluff even worth my time?

So this genius has "done the math" and his answer is "we still don't know."

Wow, how insightful.

Now, co-blogger Nate points out that "an HSA with anything short of max deductible and no contribution would pass," and that's a fair cop. But without the ability to sock away tax-advantaged dollars in anticipation of future claims, you're not talking "HSA" at all.

Back in the early 90's I became an early adopter of MSA's (Medical Savings Account plans, the forerunners of what came to be known as HSA's). At the time, these were simply very high deductible plans, and folks were encouraged to set up their own savings plans at their local bank (or mutual funds, etc). The idea was to take the dollars one saved versus a typical co-pay plan and sock those away. There was no special tax advantage to this (although a lot of my clients set up mutual funds using tax-free options - and no, I can't recall what those were called - tax-free funds?). They would discipline themselves to use the money only for medical expenses. And these worked just fine.

But they were not "HSA's" with special tax advantages and legislation (and no rules, either, of course: you picked the plan that worked best for you).

Now, would this idea work under the ObamaTax? I don't see why it wouldn't. But again, words are important, and these would not be proof of "thriving HSA's." And it certainly doesn't take a special former presidential advisor to see this.
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