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August 30, 2012 at 04:43 AM
Like many other people, I thought up the health savings account (HSA) before HSAs existed.
It seemed pretty obvious to me when I got my first real job, back in 1988, that giant insurance plans ought to exist to cover giant bills, and that people should take care of small bills out of their own personal savings. Especially in the days before the Internet, it seemed unlikely that having an insurance company pay a $10 claim was a good idea. What could be simpler than cutting insurance administration costs by setting $100 aside every month and earmarking that for everyday medical expenses?
Congress has tried to get health insurers out of paying $10 claims, and even many $1,000 and $2,000 claims, by creating the HSA program. But the Democrats got their wonks to go after the Republicans’ wonks, and, eventually, the wonks created an HSA structure that only a wonk could love.
To get the HSA tax break, the taxpayer has to combine the HSA with a health insurance plan that has a deductible that’s high, but not too high. The HSA-compatible high-deductible plan must provide coverage for the preventive services required by the Patient Protection and Affordable Care Act of 2010 (PPACA) without imposing out-of-pocket cost-sharing requirements, but the plan cannot provide zero-dollar coverage for any preventive or “penny foolish, pound wise” services other than those in the PPACA preventive services package.
Because if, say, an HSA-compatible plan decided that every enrollee should be able to get one funny-looking mole biopsied “for free,” just to reduce mole-related anxiety, that would make HSA-hating wonks very, very angry, for reasons I no longer recall.
The Internal Revenue Service (IRS) never came up with fabulous, clear-cut guidelines consumers could use to show whether they’d been making acceptable use of HSA funds, so, many consumers put the receipts in a shoebox and hope for the best.
