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Strategies & Market Trends : The Residential Real Estate Crash Index -- Ignore unavailable to you. Want to Upgrade?

To: NOW who wrote (212009)	7/23/2009 3:12:46 PM
From: GraceZ	Read Replies (4) \| Respond to of 306849

You need better friends if you don't have even one that you could trust to make important decisions for you in the event of being incapacitated. Having had a few friends and family members who I did have to make life or death decisions for on the spot, I know I can... so I know what to look for in choosing someone to do that for me. Low deductible plans or HMOs are just "dollar swaps", you pay up front, way up front, to have regular routine costs taken care of for you somewhere down the line. The most important thing to consider is whether or not "down the line" they (either your private or public plan) will actually pay for those costs or end up denying you those services you already paid for. Ask anyone who has ever had Medicare or Medicaid deny payment for a particular treatment and I think you will find government programs are not any less likely to deny than private insurance. Wouldn't you be happier having those decisions back in your own hands? OTOH high deductible plans, coupled with a HSA you fund every year pre-tax, come with an ATM card (presumably you keep it in your wallet next to your insurance card so they can find it). The difference is that you decide (or your trusted family member or friend) how it is spent (and you earn the income on that upfront money) Spending it only involves swiping your card in a credit card reader. I wouldn't hesitate a minute to bring a friend or family member into an emergency room on account of their high deductible/HSA plan if I felt they urgently needed care and were unable to make that decision on their own. What I wouldn't do is use it frivolously or recklessly because there is a much closer connection in my mind between those costs and the work put in to pay them. There is zero incentive to avoid frivolous or wasteful use of insurance benefits when the cost is the same whether you use it for every stupid minor problem or only for those problems that are really important. Insurance is a classic example of what economists call an "incentive trap". The HSA removes some of this but not all in that the money is tax free therefore the real cost is lower than the nominal. Money that is not "dear" is more easily spent. This has been WELL documented right here on this thread, while all of us watched cheap money create the RE bubble. Money can't be any less dear than when you perceive it to be someone else's money, OPM, money from some anonymous third party. People are the most responsible when they spend their own money on themselves than in any other possible configuration of spending (i.e. spending their money on someone else, spending someone else's money on themselves, spending someone else's money on someone else). The high deductible/HSA also puts you back in the position of being the customer (instead of some third party) and it goes a long way towards reducing the free rider problem inherent in all socialized systems.