What I've seen (and really like) is doing a great High Deductible Health Plan (i.e. HSA-eligible) -- something where you get top quality coverage for extreme things, and get access to the best doctors, and negotiated prices for everything from the first dollar each year, but are on the hook for the first $5k or so of costs.
Then, your employer gives you $5k/yr tax-free into your HSA account; if you don't use it, it's basically equivalent to a Roth IRA. It's actually better to spend cash out of pocket and then leave the full amount in the HSA, since it can be invested tax-free forever, and all gains are themselves tax-free. You can easily end up with a few hundred thousand dollars extra.
This accomplishes the useful goal of getting people to be price conscious for their medical services, but doesn't impoverish them. The one thing it might do is promote time shifting expenses (if I know I'm over the $5k limit in one year, I'll get all my other elective stuff done that year), but it's not a big deal otherwise.
IMO, the HSA thing was one of the best reforms in health care in a long time, and one of the (few) good things GWB did.
My current employer does this. Deductible is 2400/year for a family. Then they give us 200 per month into the HSA and we could contribute more. The insurance companies like this because it gets people to be more cost conscious. It is cheaper for my employer to offer the high deductible plan and give us the deductible than it is to give us a no deductible plan.
Comments
What I've seen (and really like) is doing a great High Deductible Health Plan (i.e. HSA-eligible) -- something where you get top quality coverage for extreme things, and get access to the best doctors, and negotiated prices for everything from the first dollar each year, but are on the hook for the first $5k or so of costs.
Then, your employer gives you $5k/yr tax-free into your HSA account; if you don't use it, it's basically equivalent to a Roth IRA. It's actually better to spend cash out of pocket and then leave the full amount in the HSA, since it can be invested tax-free forever, and all gains are themselves tax-free. You can easily end up with a few hundred thousand dollars extra.
This accomplishes the useful goal of getting people to be price conscious for their medical services, but doesn't impoverish them. The one thing it might do is promote time shifting expenses (if I know I'm over the $5k limit in one year, I'll get all my other elective stuff done that year), but it's not a big deal otherwise.
IMO, the HSA thing was one of the best reforms in health care in a long time, and one of the (few) good things GWB did.
My current employer does this. Deductible is 2400/year for a family. Then they give us 200 per month into the HSA and we could contribute more. The insurance companies like this because it gets people to be more cost conscious. It is cheaper for my employer to offer the high deductible plan and give us the deductible than it is to give us a no deductible plan.