is it inevitable that doctors incomes are going to drastically drop?

[lex]

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to the 80-120K region, with hilary clintons impending plans, and even without that, universal health care seems like its coming.

dude.. that's lower than my current salary. I would not vote for hilary based on that alone... other than the fact she is sketchy anyway..

 

[Funky]

to the 80-120K region, with hilary clintons impending plans, and even without that, universal health care seems like its coming.

hillary requires everyone to have healthcare insurance but what would be the penalty for someone who doesn't buy coverage?

And as long as medical school debt stays high, doctor's incomes will stay around the same. The demand for doctors is high right now and will probably stay that way because of the difficulty in becoming a doctor and the limited amount of medical school/residency spots in america.

 

[badasshairday]

This I don't buy. As long as states own monopolies on government-supported education, they can continue to push tuitoin costs up with no backlash. They merely up the allowed loans from the federal government regardless of whether or not students know what their degree is worth. If you look at lower paying jobs like education, for instance, their salaries are not rising at nearly the rate that their tuition is going up, and that won't catch up to the profession until it is too late.

Medical tuition at my school has more than doubled in the last 8 years while reimbursements have actually dropped.

Please stop talking about this mythical Clinton health plan. It's not going to happen. She had 8 years to develop a workable plan in the White House and several more as a senator. If she had a solution to health care, we would have seen it crop up sometime in the last 16 years.

Regarding specialties, mid-levels have taken over for MD's in many primary care settings (not to mention CRNA's). Cheaper care and lower compensation out-compete doctors.

So what do you say we do?

 

[potato head]

i barely read any of these responses, but if i can live off of 30K now, i'm okay with 80K later.

and a 150K loan? pay off 40K per year, living off of 40K (which i can do), and i'm out of debt after four years. sounds okay to me.

 

[Drogba]

Hey johan nice to see you come over from the gas forums and spread some of your misery in pre-allo

 

[wanabdoc]

I do find it funny that premeds always freak out about hilary clinton and her health plans, but she always manages to get the highest percentage of campaign donations from physicians.

No, because physician salaries will go up with Hillary's plan

 

[dc5484]

that type of salary is enough to live more than comfortably. also, if you get married you can add your spouse's income

enough to live more than comfortably? depends where you live. certainly not in the bay area of california.

 

[notdeadyet]

No, because physician salaries will go up with Hillary's plan

I'd be suprised if that was the case, but I'd also be suprised if it dropped more than it is already.

What I find incredibly ironic is the number of Californians on this board who see doom-and-gloom in the idea of Hilary's health plan in which there is no hard numbers for a decline in physician salaries, but are pretty mum and complacement about the Governator's plan, which has an explicit additional 2% tax on all physician earnings.

Me thinks a lot of this indignation is sectarian...

 

[notdeadyet]

enough to live more than comfortably? depends where you live. certainly not in the bay area of california.

The kind of upbringing folks have had and the amount of time they've lived on their own sort of skews the definition of what "living comfortably" is.

You can live comfortably on $80,000-$120,000, even in the big bad bay area. Average household income is is about $58,000, so at the top of that $80-$120 curve, you're earning twice what the average household makes.

If you were born and raised rich and have had a comfortable life up until now, it may not seem like much (rule out buying the cabin in Aspen, etc.) and if you came from a working class family and haven't supported yourself, it may seem like a heck of a lot. For most folks, it's on the cush side of the middle.

 

[notdeadyet]

If your first contract as a doc is only 80K and you have 150K in loans, a mortgage, and/or a family, you will have a very hard time making ends meet in any part of the country ten years from now.

You're sort of right. If you're making $80K/year and have $150K in loans, you'll have to pay off your loans longer term. Can you still afford a mortgage and a family? Sure. Folks do it every day. But you won't be living the good life, that's for sure.

It's a good thing that there is no data of any kind prediciting that the average physician salary will be $80,000.

 

[lisichka]

Doctors in Europe who practice socialized medicine seem to be getting along fine.

Practicing medicine doesn't mean you are entitled to be rich, mmmm'kay?

ok my patience is over. i'll chime in...
in europe, doctors usually don't have a 250,000$ education debt; they finish at a younger age (they go to med school right after high school); and the competition to get into medical school is considerably less than in the US (they have more doctors per capita). So, when you make your argument, you cannot compare US and Europe, because their approach to medical education is completely different. And actually if you factor in all the debts, and the length of education, American doctors do not have such a high standard of living when compared to Europeans😱 oh yeh and i forgot to mention, European doctors work much less than their US counterparts and their residency hours are much more benign than here in the US. So if you think that US doctors are rich, you are deeply mistaken. I am just scared that with the current state of affairs in medicine, doctors will be forced into poverty. i, personally do not have anything against poor doctors, but the quality of patient care will suffer. (and ahem, it is not great now as it is).

p.s. and when the liability insurance cost is factored into medical practice, doctors with any profit should feel lucky.

i think many lay folk have this idea that doctors are rich because they don't understand the difference between income and net profit. income can be huge, but when all the costs (like insurance, employees, taxes) are factored in, doctor's net profit is not huge. and keep in mind that many need to pay rent, drive a car, feed their children, etc, etc, etc..... some docs these days even have a negative net profit/go bankrupt. eek

 

[Gut Shot]

their medical education is shorter (they go to med school right after high school)

Why is it that people insist on treating Europe like a single country? Anyways, the dominant medical education model in much of Europe indeed starts after high school, but it lasts six years instead of four. Hence, folks graduate a bit younger, but their training takes 50% more time.

 

[lisichka]

but their training takes 50% more time.

yes, and is more than 50% cheaper😛

in reality, more training time ain't so bad. students actually have time to digest the material. longer clinical exposure hurt no one yet either. and after all that experience thay graduate younger than us Americans.

 

[Gut Shot]

yes,

So it's not shorter. So there. 😛 yourself.

 

[lisichka]

So it's not shorter. So there. 😛 yourself.

gutshot, lisichka is mad. "stomps her foot on the floor" do not mess with lisichka

ok ok fine i changed it, look upstairs. see?!

 

[batman1983]

I don't know why some of us think $ is bad or somthing. It is not wrong to expect a high salary at all. Too much of this idealism "i'll practice medicine for food," is what makes physician's and their lobby groups impotent.

The aliens are coming... I'm sure a lot of premeds don't know about the repeal of the 20/220 in which residents are going to have to shell out a lot of dough because they can't defer there loans anymore. It's already hard enough to live on that resident salary.

And don't forget the ever decreasing reimbursements for practicing physicians.

Asking for money isn't really all bad, look at nurses. Everybody is looking out for there $; the hospitals, insurance companies, nurses are all looking out for there $. On the other hand, nobody is looking out for the salaries of physicians, not even physicians themselves. The aliens are here.

I agree. I believe it is this naivety that is hurting doctors, and in the end, healthcare as well. Unfortunately, you see it too much, especially in medical academia. In every medical interview I have had, I am always bombared with questions about why I worked so many hours or why did I work at certain places, and everytime, they look at it with negativity. Its because I want to pay off college as well as have money for medical tuition so that I dont have to incur debt.

 

[Drogba]

Why is it that people insist on treating Europe like a single country? Anyways, the dominant medical education model in much of Europe indeed starts after high school, but it lasts six years instead of four. Hence, folks graduate a bit younger, but their training takes 50% more time.

I'm not sure. If you are talking about England say England. Plenty of things Lisicha said are not true for the country I'm most familiar with. For example the competition to get in to a domestic school here is very stiff. Many people end up going out of the country to study medicine to try and return and do their residency here. All the sudden expenses start to build up if you have to do that. Also, I'm pretty sure the competition to get into a med school in England is at a pretty high level.

Also, their time spent in training might be shorter but the time between starting medical school and practicing their specialty can be much longer. This is because here you can pick whatever specialty you want to practice. Instead of rationing residencies by test scores (like the Step) they use waiting lists. I talked to a doctor yesterday who is waiting for a pathology residency. She has already waited one year, she only has 4 more to go. Many doctors have little or no employment during this period of time. Almost all specialties have a waiting time of atleast 1-2 years.

Furthermore those doctors taht choose to work for the public sector get paid around 35k euros per year, again regardless of the specialty. The minimum wage here is around 7.8k euros per year. Thats right folks, public doctors only get paid ~4.5 times minimum wage. Imagine getting paid around 50k as a doctor in the US, even with no educational loans.

Doctors that work in the private sector can often do much better, but the competition is fierce and even the most successful doctors often have trouble approaching patient volume anything near what a practicing doctor would have here. Many of those working in the private sector have done their residency in the US or England.

For the average doctor, practicing in the US is MUCH more lucrative then practicing anywhere else. This is an indisputable fact. Possibly, English doctors can approach this level, but they really are the only ones from my understanding. The only other doctors in Europe that can even come close are those working with private insurance not those working in the public sector.

If you mean England say England. Most people here have almost no familiarity with the European systems, yet are constantly commenting on them.

 

[lisichka]

.

if you are disputing my comments, how about using hard numbers? give me the stats for number of applicants/# of matriculants to your typical med school? from a respectable source, not ur assumptions. i do not mind being wrong, but when rebuffed with facts, not emotions. i see no facts as of yet. just because you didn't get in, does not mean competition is stiff/stiffer than in the US.

also for your info 34,000 euros is around 51,000 USD which isn't that bad if you consider that your docs don;t worry about debts, insurance costs, and HMOs. if they also work for a government, they don;t have to pay office rent, employee fees, and all that nonsense that US docs worry about.

 

[lisichka]

their time spent in training might be shorter

in most european med schools training time is longer (e.g. germany, france, italy).

so is it shorter or it "might" be? it seems that you don;t know.

 

[Drogba]

if you are disputing my comments, how about using hard numbers? give me the stats for number of applicants/# of matriculants to your typical med school? from a respectable source, not ur assumptions. i do not mind to be wrong, but when rebuffed with facts, not emotions. i see no facts as of yet. just because you didn't get in, does not mean competition is stiff/stiffer than in the US.

You are rather quick to assume based on limited information. There are no emotions here. I was born, raised, go to college and will be applying to medical school in the US. I have had a fair amount of exposure to the medical system in my country of heritage though as my family lives here, I've volunteered here and I've shadowed American trained private doctors here. You are the one making the broad assumptions that medical school is the most competitive in the US with no evidence to compare systems. Why should I have to provide statistics to rebuff you?

I also made many other relavent points that have nothing to do with competitiveness that are in direct contradiction to the arguments you were making. Based on what are you commenting so freely on European medical systems? Your statements indicate to me that you've not done much research on comaparitive medical systems or that you've spoken with practicing physicians across Europe.

 

[Drogba]

in most european med schools training time is longer (e.g. germany, france, italy).

so is it shorter or it "might" be? it seems that you don;t know.

I like how you respond to sentence clauses completely outside their context

 

[parto123]

Its incredible how little understanding of finance many premeds have.

Not that I ever believe this will happen, but to think 80k per year for a med school grad is enough to live comfortably is absurd. Do you have any idea what monthly payments will be like on 150-200k of loans? Or how much take home there is on 80k after fed, state, city tax. Also, good luck applying for a mortgage with 80k in income and 150k in loans. The days of zero down subprime mortgages are over.

 

[lisichka]

Why should I have to provide statistics to rebuff you?

you were the one that stated that i was wrong. now give me a good reason of why i was wrong.

don;t make hasty accusations, and others will not ask you to think. but if you dare to say i was wrong, give me the facts. and when compared to you, i volunteered in a european (as well as American) hospital for many years, and know their system well. i am not saying it is perfect, but at least i know what i am talking about.

 

[Drogba]

you were the one that stated that i was wrong. now give me a good reason of why i was wrong.

don;t make hasty accusations, and others will not ask you to think. but if you dare to say i was wrong, give me the facts. and when compared to you, i volunteered in a european hospital for many years, and know their system well. i am not saying it is perfect, but at least i know what i am talking about.

Where might you have volunteered that you feel that you can generalize all of Europe? You've given absolutely no facts to support the very broad generalizations you've made. Again you say "when compared to me." You are the one making hasty accusations about my person. You already presupposed that I applied to med school in Europe and didn't get in.

I don't know much about the french system but I just found a little tidbit that you might find interesting

The current medical education system involves initially studying for a two year Diplôme d'Étude universitaires générales (DEUG), which is taken in a scientific field of learning. Then follows a year of intensive medical study to pass an extremely competitive exam, which an astounding 85-90% of candidates fail. This failure rate keeps the numbers of medical students down to 7000. These successful candidates usually then study for another competitive exam, the internat exam, which, if passed, gives access to training for the most prestigious medical specialisations. Passing the internat usually entails following expensive, tailor made lectures—a form of cramming that is technically illegal in France. A third of those who fail the internat turn to general medicine, forming a two tier system of medical training.

http://student.bmj.com/issues/99/09/news/315a.php

Again, please say on what you are basing your wild assumptions of how all of Europe is.

 

[lisichka]

Again, please say on what you are basing your wild assumptions of how all of Europe is.

i already said everything i had to. now next time you randomly point a finger at someone, be prepared to defend your point, Drogba. b/c as of now, you have nothing...

otherwise, i have nothing against you. and only wish you good luck

 

[Drogba]

i already said everything i had to. now next time you randomly point a finger at someone, be prepared to defend your point, Drogba. b/c as of now, you have nothing...

otherwise, i have nothing against you. and only wish you good luck

As of now I'm the only one who has presented information that is not wild generalization and is actually based in some sort of experience. Here is some more information for you:

Regarding medical education in the UK

For example, UCAS figures show that the ratio of applications to medical school in comparison to places available is almost ten to one.

from the BMA website, http://www.bma.org.uk/ap.nsf/Content/becomingadoctor2008.

 

[Drogba]

if you are disputing my comments, how about using hard numbers? give me the stats for number of applicants/# of matriculants to your typical med school? from a respectable source, not ur assumptions. i do not mind being wrong, but when rebuffed with facts, not emotions. i see no facts as of yet. just because you didn't get in, does not mean competition is stiff/stiffer than in the US.

also for your info 34,000 euros is around 51,000 USD which isn't that bad if you consider that your docs don;t worry about debts, insurance costs, and HMOs. if they also work for a government, they don;t have to pay office rent, employee fees, and all that nonsense that US docs worry about.

What??? Thats pretax income, in a country that has a higher tax rate than the US. A full time primary care doctor in the US will conservatively make (after all malpractice insurance and overhead, but before taxes) at the very least 2x that, and accoring to salary surveys they will make 150k after expenses and before tax on average. This is just primary care. All the specialties make about 35k euros when many specialties in the US make after expenses and before taxes 200k, 300k, or more. Try telling a US radiologist to practice medicine for $50k before taxes and see what they think of that.

 

[Drogba]

[...]
Even if your 80K gross was after malpractice insurance was deducted, your student loans can't be paid before taxes. If you want to pay off 40 grand/year in student loans, your remaining take home would be below the poverty line.
[...]

Just wanted to point out that the federal poverty line for one person is ~$10k per year. I don't necessarily disagree with the rest of your post but the bolded comment is an exaggeration.

 

[whoisthedrizzle]

Where do people come up with these numbers? Out of that dark place where most people keep sticks? For years people have been predicting the fall of physician salaries, check out this article from one of the schools I applied too, it was published in CMDA magazine in 1989, although it is primarily religious, the last few paragraphs predict that physicians' salaries will go to he**.

Here is what has really happened to physician salaries since 1982, I researched this at my local library and have provided the sources.


Physician salary trends

no offense, but I can't trust anyone that cant spell "surgery"

 

[whoisthedrizzle]

theres too much talk on here about doctors salaries i think
i used to care a lot but I think I learned to chill out

and 80-120k is still great money...

I don't think theres enough talk going around about it.

It's a serious issue for those of us going into it for the money. And as countless people have posted before you, 80-120k is not great money for the amount of debt we're getting ourselves into.

 

[Drogba]

T

Right, he'll take home 50K out of 80K total when taxes, SSN, benefits, and retirement are taken out, and he wants to pay 40K back in loans. That leaves 10K.

My gross salary was roughly 80K before I started med school, my take home pay was about $1000/week claiming 0 exemptions and taking modest retirement and benefit adjustments, and still had to pay money back come April. Granted, I didn't have dependents or an income-deductable mortgage, but as the number of dependents goes up, so does the poverty line.

If I were going to take 40K of the 50K that I took out to pay off relatively low-interest loans, I would not have been able to pay my bills.

The poverty line doesn't refer to disposable income after taxes, ssn, benefits and retirement, it refers to taxable income. After federal taxes you would have 63k of your 80k taxable income assuming you have no deduction at all. Obviosuly that 63k will be reduced based on how much you want to invest and what benefits you want to take but your taxable income will fall as well.

I'm not saying that this would not be very difficult to do and that you probably wouldn't be able to live comfortably (or at all in some areas) but its not the same as being below the poverty line.

I do agree with your assesment that it is pretty unrealistic to pay 40k/yr in loan repayments with an 80k salary. If you are willing to live in a box apartment in the ghetto though it would technically be possible.

That kind of sucks that you can't deduct medical school loan payments. 🙁

 

[badasshairday]

If I get into med school i'm going to start an organization to unionize physicians. We can strike against private insurances one company at a time to demand better reimbursements and also strike if the government continues to reduce medicare reimbursements.

Are you with me?

 

[Drogba]

Agreed. All student loan payments should be tax deductible. It's easy to shelter retirement fund contributions, so I don't understand why the government doesn't allow us to pay loans back pre-tax.

It really is ridiculous especially with the repealing of the 20/220 law.

The real shame is that there is so much economic pressure to shorten medical education now that I think it will suffer. In England you have 5 years of med school plus 2 years of general post graduate education and then residency. That would never happen here because of the huge economic disincentives. Instead the trend here is to reduce education as in some of these integrated residencies.

Whether medical education should be longer or shorter isn't really the issue in my mind. I just don't think financial pressures should be shaping the medical curriculum.

 

[batman1983]

If I get into med school i'm going to start an organization to unionize physicians. We can strike against private insurances one company at a time to demand better reimbursements and also strike if the government continues to reduce medicare reimbursements.

Are you with me?

Ill be the first scab to cross and pick up all your patients

 

[lisichka]

If I get into med school i'm going to start an organization to unionize physicians. We can strike against private insurances one company at a time to demand better reimbursements and also strike if the government continues to reduce medicare reimbursements.

Are you with me?

me is here (can my cat join too? she is so so cute, so you'll have two people on your side in one strike)

 

[CaptainZero]

i barely read any of these responses, but if i can live off of 30K now, i'm okay with 80K later.

and a 150K loan? pay off 40K per year, living off of 40K (which i can do), and i'm out of debt after four years. sounds okay to me.

Wow - this is probably the most naive thing I've read on this board in a while.

 

[CaptainZero]

Its incredible how little understanding of finance many premeds have.

Not that I ever believe this will happen, but to think 80k per year for a med school grad is enough to live comfortably is absurd. Do you have any idea what monthly payments will be like on 150-200k of loans? Or how much take home there is on 80k after fed, state, city tax. Also, good luck applying for a mortgage with 80k in income and 150k in loans. The days of zero down subprime mortgages are over.

Couldn't have said this better myself. Once you move out of mommy and daddy's house (I don't mean literally - I mean being 100% financially independent paying for house, car, family), and start paying taxes hopefully you'll be less naive. But honestly, reading these posts is alarming

 

[Vihsadas]

All I want is enough to pay my loans off in a reasonable amount of time, and enough to live comfortably. I don't need 3 lexus SUVs, 1 mansion in florida and one in colorado. Right now, I live off of less than 30K a year tuition included. If I can do that, then I'm not too worried.

 

[batman1983]

Couldn't have said this better myself. Once you move out of mommy and daddy's house (I don't mean literally - I mean being 100% financially independent paying for house, car, family), and start paying taxes hopefully you'll be less naive. But honestly, reading these posts is alarming

I keep saying that it is this naivety with premeds, med students, as well as in medical academia(med schools choose the idealists over the realists) that is hurting medicine. By saying that its okay to work for $80k, with all the expenses and time value that a medical education costs, as well as the costs of living($80K is barely middle class in Southern Cal and NYC), is absurd. Thinking like this is the reason why medical unions will never work.

 

[JackDanielMD]

What proof is there that socialized medicine is a viable option for our healthcare system?

1) We're not socialist. Enacting an unwieldy social welfare bureaucracy is not going to go over to well with voters, especially Republicans. I think talking about anything "socialized" and that big and unknown won't gain easy passage.

2) Money. It would be much less costly to fix our existing system by helping the portion of the population that's uninsured or underinsured and proposing insurance reform.

These are just my thoughts though. I'm no expert. 🙂

Um.....Fixing the system by helping the portion of the population that's uninsured and under insured.....yeah....that's "socialized medicine." I don't like that word though. Socialized medicine is a term coined by the Republicans as a scare tactic. What we want is universal coverage. Besides, lots of things in the US are socialized: social security, the US postal service, libraries, etc.

 

[Kthanksbye]

Um.....Fixing the system by helping the portion of the population that's uninsured and under insured.....yeah....that's "socialized medicine." I don't like that word though. Socialized medicine is a term coined by the Republicans as a scare tactic. What we want is universal coverage. Besides, lots of things in the US are socialized: social security, the US postal service, libraries, etc.

You can (theoretically) have universal coverage without socializing. The two terms are not synonymous. And "socialized medicine" is not a republican term, it describes a system where the government owns the market. There is no proof that any government in the world could ever run health care better than the private sector. In the absence of such proof, it amounts to a mere power grab, which should be as derided in the US as it is in Venezuela when Hugo Chavez "publicized" virtually all the private industries in that country (unless you're Sean Penn). Your examples are also interesting:

social security....failing

the US postal service....basically a giant job welfare program which enforces a government owned monopoly. The BEST thing the US could do with the postal service is to privatize it.

Free markets are the best way to brings costs down and ensure the best quality for any system. What market in the world works better when it is run by government?

 

[CaptainZero]

You can (theoretically) have universal coverage without socializing. The two terms are not synonymous. And "socialized medicine" is not a republican term, it describes a system where the government owns the market. There is no proof that any government in the world could ever run health care better than the private sector. In the absence of such proof, it amounts to a mere power grab, which should be as derided in the US as it is in Venezuela when Hugo Chavez "publicized" virtually all the private industries in that country (unless you're Sean Penn). Your examples are also interesting:

social security....failing

the US postal service....basically a giant job welfare program which enforces a government owned monopoly. The BEST thing the US could do with the postal service is to privatize it.

Free markets are the best way to brings costs down and ensure the best quality for any system. What market in the world works better when it is run by government?

Another example... if you want a glimpse as to what would happen if the government controlled all hospitals/healthcare - just look at the VA system with their dilapidated buiildings and largely sub-par care.

 

[Jolie South]

Um.....Fixing the system by helping the portion of the population that's uninsured and under insured.....yeah....that's "socialized medicine." I don't like that word though. Socialized medicine is a term coined by the Republicans as a scare tactic. What we want is universal coverage. Besides, lots of things in the US are socialized: social security, the US postal service, libraries, etc.

I'm talking about tax credits, discounts, regulations or something to lower the cost of insurance such that those that don't qualify for medicaid could purchase insurance and not break the bank. I think that we're all responsible for our own health, but at the current insurance rates it's hard for many to do so.

Not another government instituted deal like Medicaid or Medicare.

 

[Kthanksbye]

I'm talking about tax credits, discounts, regulations or something to lower the cost of insurance such that those that don't qualify for medicaid could purchase insurance and not break the bank. I think that we're all responsible for our own health, but at the current insurance rates it's hard for many to do so.

Not another government instituted deal like Medicaid or Medicare.

What you're talking about already exists, but few take advantage of it as yet. I finally opened a health savings account last year and it's the best health decision I've ever made. I would encourage everyone to look into them.

You don't need health insurance to pay for every doctor visit and prescription. It is for catastrophes only. An HSA is cheaper because it's paired with catastrophe insurance only, and whatever you pay towards your savings account is tax deductible. You should set up the insurance separate from the account, actually, so that if insurance rules change or your insurance rates change, you're not locked into a plan because they also have your HSA. If you contribute the maximum amount to your savings account per year, your tax deduction can be more than your insurance premiums. The account is yours forever, and you can do with it whatever you want -- keep it in savings, put it in a money market, or invest it in stocks (with ameritrade for my HSA). Before you're 65, there's a penalty if you withdraw it for anything non health care related, after 65, you can withdraw it for whatever reason, no penalty. So it is like an IRA, but without the income restrictions IRAs have. And every year they are making them a better deal. The deductibles can be higher (making the insurance cheaper) and the maximum contribution per year can be more. It's really the best deal going.

This is a true market reform. It is an option, take it or leave it, no government mandates that you must enroll. But it's such a good deal, most people who are at all financially savvy will take it.

 

[lisichka]

What you're talking about already exists, but few take advantage of it as yet. I finally opened a health savings account last year and it's the best health decision I've ever made. I would encourage everyone to look into them.

You don't need health insurance to pay for every doctor visit and prescription. It is for catastrophes only. An HSA is cheaper because it's paired with catastrophe insurance only, and whatever you pay towards your savings account is tax deductible. You should set up the insurance separate from the account, actually, so that if insurance rules change or your insurance rates change, you're not locked into a plan because they also have your HSA. If you contribute the maximum amount to your savings account per year, your tax deduction can be more than your insurance premiums. The account is yours forever, and you can do with it whatever you want -- keep it in savings, put it in a money market, or invest it in stocks (with ameritrade for my HSA). Before you're 65, there's a penalty if you withdraw it for anything non health care related, after 65, you can withdraw it for whatever reason, no penalty. So it is like an IRA, but without the income restrictions IRAs have. And every year they are making them a better deal. The deductibles can be higher (making the insurance cheaper) and the maximum contribution per year can be more. It's really the best deal going.

This is a true market reform. It is an option, take it or leave it, no government mandates that you must enroll. But it's such a good deal, most people who are at all financially savvy will take it.

thanks for the info on HSA. but from what i understand you must have an employer in order to deposit pre-tax. if you are self-employed, then you pay taxes. what about students depositing from their previous savings, is that tax-deductable? prolly not. the negative part about HSA is that it is still good ol' employer-based system. it does not take into account unemployed (temporary/permanent), poor children. and self-employed still pay taxes.

please correct me if i am wrong on these conclusions. this HSA thing is still new to me.😳
p.s. i promise, i won;t bite i am in good mood now.

 

[Drogba]

What you're talking about already exists, but few take advantage of it as yet. I finally opened a health savings account last year and it's the best health decision I've ever made. I would encourage everyone to look into them.

You don't need health insurance to pay for every doctor visit and prescription. It is for catastrophes only. An HSA is cheaper because it's paired with catastrophe insurance only, and whatever you pay towards your savings account is tax deductible. You should set up the insurance separate from the account, actually, so that if insurance rules change or your insurance rates change, you're not locked into a plan because they also have your HSA. If you contribute the maximum amount to your savings account per year, your tax deduction can be more than your insurance premiums. The account is yours forever, and you can do with it whatever you want -- keep it in savings, put it in a money market, or invest it in stocks (with ameritrade for my HSA). Before you're 65, there's a penalty if you withdraw it for anything non health care related, after 65, you can withdraw it for whatever reason, no penalty. So it is like an IRA, but without the income restrictions IRAs have. And every year they are making them a better deal. The deductibles can be higher (making the insurance cheaper) and the maximum contribution per year can be more. It's really the best deal going.

This is a true market reform. It is an option, take it or leave it, no government mandates that you must enroll. But it's such a good deal, most people who are at all financially savvy will take it.

That sounds pretty awesome. I will definitely have to look into those more, though it will be a few years before I have a chance to contribute to one. Untaxed savings 😍

 

[Kthanksbye]

thanks for the info on HSA. but from what i understand you must have an employer in order to deposit pre-tax. if you are self-employed, then you pay taxes. what about students depositing from their previous savings, is that tax-deductable? prolly not. the negative part about HSA is that it is still good ol' employer-based system. it does not take into account unemployed (temporary/permanent), poor children. and self-employed still pay taxes.

please correct me if i am wrong on these conclusions. this HSA thing is still new to me.😳

I am currently unemployed (I'm a student). You do not have to have one through an employer. I opened it myself, using an insurance broker who specializes in them. You don't pay the broker, they are paid by the insurance companies. (HSA America is the broker I used -- not an endorsement, just a suggestion.) You're right that if you can get your employer to contribute to your HSA, it will be pre tax money. But I don't think you get the tax deduction if you do that, but I'm not sure how that works. If you contribute from your own account you can claim it on your taxes and you get a deduction, which is how I'm doing it. At any rate, no matter where the money comes from, there is an incentive to contribute to the account.

I personally would like to see employers get away from being responsible for the health insurance of employees. But the tax codes must be changed for this to be realistic (or more people must sign up for self directed HSAs).

This also gives you much more control over how your health care will be administered. I personally don't want some clerk without an MD at some insurance company telling me I can't get a test because it's not covered. Those types of decisions are between the patient and the doctor. Insurance companies should not be involved. But the reality is that the person who pays will ALWAYS control what is done, whether it is the government or the insurance company. With an HSA, you are in control of your own health care. It's your money. This is closer to how it should be.

 

[Gut Shot]

If I get into med school i'm going to start an organization to unionize physicians. We can strike against private insurances one company at a time to demand better reimbursements and also strike if the government continues to reduce medicare reimbursements.

Good luck.

 

[Jolie South]

What you're talking about already exists, but few take advantage of it as yet. I finally opened a health savings account last year and it's the best health decision I've ever made. I would encourage everyone to look into them.

You don't need health insurance to pay for every doctor visit and prescription. It is for catastrophes only. An HSA is cheaper because it's paired with catastrophe insurance only, and whatever you pay towards your savings account is tax deductible. You should set up the insurance separate from the account, actually, so that if insurance rules change or your insurance rates change, you're not locked into a plan because they also have your HSA. If you contribute the maximum amount to your savings account per year, your tax deduction can be more than your insurance premiums. The account is yours forever, and you can do with it whatever you want -- keep it in savings, put it in a money market, or invest it in stocks (with ameritrade for my HSA). Before you're 65, there's a penalty if you withdraw it for anything non health care related, after 65, you can withdraw it for whatever reason, no penalty. So it is like an IRA, but without the income restrictions IRAs have. And every year they are making them a better deal. The deductibles can be higher (making the insurance cheaper) and the maximum contribution per year can be more. It's really the best deal going.

This is a true market reform. It is an option, take it or leave it, no government mandates that you must enroll. But it's such a good deal, most people who are at all financially savvy will take it.

I didn't know that was how it worked. I thought that you put all the money in at once and that the money had to be used the same year that it was put in the account otherwise you lost out on the tax benefits or were penalized in some way.

The problem that I had with it was having enough disposable income to throw in there. How much are we talking on premiums? If I had to pay that and it was equivalent to what I'm paying now, there would be no extra money floating around for monthly contributions to the savings account.

Before the account builds up, how do you pay the deductible if you have a serious health problem? I know that they are currently a few thousand dollars with insurance compatible with the HSAs. My current deductible is $250, so it's pretty low.

and what would i do for contributions in med school when i have no income?

Another unrelated question. . .can you use the money for elective procedures such as LASIK or plastic surgery? not that I want that, i'm just curious.

 

[Kthanksbye]

I didn't know that was how it worked. I thought that you put all the money in at once and that the money had to be used the same year that it was put in the account otherwise you lost out on the tax benefits or were penalized in some way.

This is not an HSA. It's an FSA (flexible spending account). I would not recommend anyone use an FSA. Obviously, the biggest drawback is that if you don't use your contributions within the year, they are gone. With an HSA, the money is yours forever. And it's inheritable, so even if you die, it's not absorbed by your health plan. An HSA is kind of like a retirement account in that you can use it for anything you want without penalty after 65. Before 65, you can only withdraw from it for health care (which is actually pretty broadly defined) or suffer a penalty fee.

The problem that I had with it was having enough disposable income to throw in there. How much are we talking on premiums? If I had to pay that and it was equivalent to what I'm paying now, there would be no extra money floating around for monthly contributions to the savings account.

Generally, the premiums are less than what most people are paying for their standard insurance plans. You can look into it to find out, but you can get coverage for about $50/month and up, depending on your deductible and coverage. Mine is $47.36. You don't have to contribute to the HSA at all. But it would understandably be wise to at least get it up to the amount of the deductible, which I think is by law is $5100 max, but can also be less. I would actually like to have a higher deductible since it makes the insurance cheaper and I rarely go to the doctor and would rather pay out of pocket for most things. Health insurance is not for every random prescription or visit, it's just for getting hit by a bus or something that no one can reasonably be expected to afford. The reason most people pay so much for insurance is because they are over insured. Your HSA can cover the small stuff. Your insurance picks up the really expensive stuff.

Before the account builds up, how do you pay the deductible if you have a serious health problem?

This is a drawback of HSAs. You are limited to a fixed maximum contribution per year, so it can take some time to accumulate a sizable HSA. Although wise investing can make your HSA grow faster. Also, this is less of a problem for young people who are unlikely to experience significant health problems before they can build up their HSA. Although I would not say that HSAs are only for the young and healthy. I think they have something to offer for others as well...control of health care, tax free retirement savings, ability to invest, independence, and it puts the responsibility of personal health on the patient, where it should be. One thing you could do would be to start out with a lower deductible if it makes you feel more comfortable, then raise the deductible as the HSA grows to save money on premiums. Here are some sites that answer some questions:

US treasury department

Kiplinger FAQ