One Down Forty-Nine To Go
The Medicare HSA is a simple new option that needs to be enacted on a national level. The concept is simple. If you are currently on Medicare and the tax payers are paying $9,000 a year to the Medicare HMO for you, this is how the HSA would work;
First: Instead of the Federal Government sending $9,000 a year to the HMO they send it to the citizen’s Tax Free HSA at the bank.
Second: You can give all of the funds to the HMO and have a “Zero Deductible” and you would also have a “Zero HSA balance.” Or, you can pick a higher HSA deductible that costs less and keep the difference in your HSA, plus tax free interest.
Example: If a $5,000 deductible HSA plan dropped the premium to $5,000 a year, the senior would still have a $4,000 HSA balance.
Even starting your HSA at 65 years of age, after 20 years of $4,000 a year deposits, growing tax free, with interest or invested in mutual funds, the HSA balance will become a large financial estate, all federally funded.
The HMOs fight tooth and nail to stop the HSA option in Medicare because they say it’s like paying a senior $4,000 a year, tax free, not to join an HMO. I say HMOs need the HSA competition in Medicare and another option never hurt anybody.
Posted by Z Woof
05/14/2005 at 01:30 PM
OCM: You ask is there any special utilization review of HSA funds going for basic medical care?
No, your HSA funds can be spent on medical, vision and dental expenses with a debit card. You could get new prescription sunglasses if you so choose.
You can get 5 pair of sunglasses if you choose. It’s your money.
Posted by Z Woof
05/14/2005 at 02:50 PM
OCM: I would of been surprised if you had an HMO in Medicare where you live. HMOs are only in certain counties in America.
Your neighbors, like my Mom, get only one choice in Medicare. Her only choice is traditional Medicare that pays 80% of medical bills so she has to pay for a Medigap policy that pays the remaining 20% and her cost is $171 a month for her Medigap coverage. Here in Tampa HMOs advertise there are no premiums, just sign on the dotted line and the Federal Government will pay the bill.
The HMOs in Medicare can’t go everywhere in America but the HSA can. You can’t have the HSA option yet because HMOs in “special counties” will lose customers.
Posted by Z Woof
05/14/2005 at 03:02 PM
OCM: Medicare is a disaster. Everybody pays the same Medicare tax so that is equal. But Medicare pays more for New York City seniors on HMOs than they do for your Colorado county, that is unequal. If Medicare paid the same for your county’s seniors as it does for New York City or Boston HMOs your hospitals would be swimming in money, like those in New York.
That’s why New Yorkers call the rest of us smucks
Imagine a New York City Medicare couple enrolling into an HMO and the Federal Government sending $18,000 per year to the HMO. The HMO takes the money for 10 years then the old guy get’s cancer. Then the Medicare Rights Center has the old cancerous New Yorker sign a document and switches him back to traditional Medicare and the tax payers pay the $500,000 for cancer treatment anyway. What a scam on the US tax payer.
That is another reason New Yorkers call us smucks
Posted by Z Woof
05/14/2005 at 03:51 PM
Z,
I just read this very carefully. There is much I don’t understand (vocabulary), but this sounds like a complete outrage. The HMOs get this money as soon as a person signs up… say that person doesn’t use any of it for 20 years and dies in a wreck. The HMO is in big bucks, then. HMOs can arbitrarily just switch someone to Medicare after getting money for them for years?? sheesh..
Sigh.... kind of confusing… But thanks for trying to help.
Posted by Phoenix
05/14/2005 at 04:43 PM
Phoenix: It is not confusing. It’s just like paying for home insurance then when your house burns down you pay the cost of repair anyway, with no help from the insurer.
Of course the HMOs are not suppose to switch sick HMO seniors back for the tax payers to pay the medical bills, so they use the Medicare Rights Center for their dirty work.
You are right Phoenix, it’s a complete outrage. I call it a scam.
Maybe Hillary will run for President and say that New York seniors on Medicare should get no more than the rest of America. Don’t hold your breath.
Posted by Z Woof
05/14/2005 at 04:59 PM
Speaking of Hillary - There’s a great article in National Review this week about immigration, the illegals, etc. by Mark Krikorian. He’s the executive director of the Center for Immigration Studies. He talks big about Hillary.
This is off the topic, Z, but the Hillary thing reminded me....
I’ll keep reading your stuff...... I want to understand it. But, I don’t get how I pay out all this money for house insurance, my house burns down and *I* pay for it??? I suppose my insurance company will pay .. I don’t know....what do they pay - to build it back?
Posted by Phoenix
05/14/2005 at 06:04 PM
Phoenix: That is the point, tax payers pay the HMO Medicare premiums and then when some get sick, tax payers pay the medical bills too and the HMO is laughing all the way to the bank.
I’m just saying it’s not fair that Medicare pays so much more to New York City seniors on Medicare and Iowa has the lowest reimbursement rates in America. It is so low that HMOs won’t go to Iowa (or OCM county) in Medicare. In Iowa seniors are forced to buy Medigap insurance for $171 a month (My Mom) and here in Tampa with the Medicare HMOs getting higher payments, their is no premium.
All of America pays the same Medicare tax but when it comes time for paying out the Medicare benefits, most counties are getting the Medicare hoze job by the federal government.
Posted by Z Woof
05/14/2005 at 06:30 PM
I’m a bit confused. I’m from Iowa originally. Is this medicade thing a good or bad thing.
Posted by Annoying Little Twerp
05/14/2005 at 07:06 PM
Twerp: If you like poor people it’s good. If you like “Monopoly Corporations” sucking the tax payers dry, its bad, real bad.
Medicare is health insurance, paid by tax payers, for all Americans “over the age of 65” and is administered by the Federal Government. Medicaid is health insurance, paid by the tax payer, for poor people, under the age of 65, and is administered by the state governments. (there are some exceptions)
In Florida, Medicaid is costing tax payers over $7,000 a year, per person. Let’s say Iowa tax payers are spending half that for a poor child’s health insurance or $3,500 a year. The cost for HSA health insurance for a poor child in Des Moines is only $750 a year but it has a $2,600 annual deductible, then pays 100%. If the State pays $750 for the insurance and then gives the child the deductible of $2,600, tax free, in a Health Savings Account (HSA) the state tax payers save money ($750 + $2,600 = $3,350). If the child is sick or hurt the parents use the child’s HSA State deposit to pay the deductible. If the child doesn’t get sick they keep the HSA money and get interest on the funds.
The choice for the poor child is:
1) Stay with a “Zero deductible” and get nothing in your HSA which costs the tax payers $3,500 a year.
2) Switch to a $2,600 deductible and get $2,600 in your HSA which costs tax payers $3,350 a year.
Let’s say the poor child is 8 years old. In ten years if the child used 50% of their funds, or $1,300 every year, the child would have $16,233 at 18 years old (using 4% interest).
Benefit to tax payers: Health insurance costs are going up 10% a year. The HSA deposit does not go up. Over 10 years the state tax payers will save a ton of money if the poor choose the HSA option.
Should the poor Des Moines child take the HSA option and pocket $2,600 per year and save the tax payers a mountain of money?
Jimmy Buffett says, “Math Suks”
Posted by Z Woof
05/15/2005 at 07:43 AM
Good morning OCM: Trust me, if you had a $20,000 HSA balance and you could get your Rx for FREE you wouldn’t take it out of your HSA.
You ask, “Show an example of a $1K doctor bill and how it would be paid by Medicare (Traditional) VS an HSA.”
Traditional Medicare and Medigap Insurance: First of all, all docs that accept Medicare patients accept the amount that the Government says they can get for medical treatment. Lets say the Government says that the total allowed amount is $500. Medicare would pay 80% or $400 and private Medigap Insurance pays 20% or $100. The senior pays nothing on the bill but my Mom’s Medigap coverage costs $171 a month.
Medicare HSA: The $1,000 charge must still be reduced to $500 and that amount would be paid by the HSA.
Five years before my Dad died he had a surgery on his eye and they made him stay in the hospital the night before the surgery. He looked at the charges afterwards and he said, “There were charges for drugs, as long as your arm, the night before the surgery and I didn’t even take one pill. I asked the doctor what all these drug charges were for and the doc said, “Why do you care?” My Dad went crazy and said, “I’m an American and I don’t like people ripping off my country.”
With an HSA everybody will look at the bill because it is their money. Most people don’t care about someone else’s money.
Its kind of like you OCM, you don’t care about State Farm’s money, you think they should give a lot of it to you. And I hope you get a bundle without giving any of it to a lawyer.
Posted by Z Woof
05/15/2005 at 09:14 AM
OCM: HSAs are not considered insurance coverage. Maybe the drug company will someday ask, “Do you have an HSA?” Did the drug company ask if you have an IRA?
People on tradition Medicare don’t have Rx coverage now anyway.
A Medicaid HMO in Iowa would not know about the new HSA option, not alone one in Colorado. Oh I’m sure upper management of the HMOs know, but not anybody you will be able to talk too. In Iowa the HSA option in Medicaid was just passed and it won’t start for a year.
Posted by Z Woof
05/15/2005 at 10:34 AM