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Are High Deductibles the Enemy?

Lively · August 31, 2017 · 3 min read


Healthcare costs are soaring and steadily increasing at a higher rate than inflation. Who or what is responsible and are high deductibles the villain of healthcare?

Health Costs Are Rising

Heatlhcare is a delicate race for most Americans and seems to be running a furious rate. Health costs currently account for 18% of the US GDP and ranks as the #1 cause of credit card debt. It’s top of mind socially, politically and economically and maybe, more importantly, it seems to be stuck in the mud.

We know out of pocket costs are rising for individuals and families, both relatively and in terms of real dollars illustrated by the fact that healthcare costs are increasing at a higher rate than inflation. The average healthcare cost for an American has now breached $10,000 per person per year.

High Deductible Health Plans (HDHPs)

In order to compensate for these rising costs, and still offer healthcare plans to their employees, employers have driven adoption of high deductible health plans (HDHPs). In fact, HDHPs now account for 29% of all employer-sponsored health plans, up from 20% in 2014. This has been an expected compromise on the employer part. Employers see lower costs per employee and employees often see lower deductions from their paychecks, which is great for both sides. However, these plans by definition have higher (short term) out of pockets costs. Are they a major factor in driving health cost up in the US?

On the surface, it seems like an easy scapegoat, but as we dig deeper high deductibles plans might open the door to a long-term healthcare savings opportunity. What if I told you, you could pay less for healthcare today and save more money for the long term? This might not be universally true, but let us show you why it might apply to you.

The Opportunity

The one ray of sunshine that accompanies higher deductibles, specifically an HDHP (high deductible health plan) is an HSA. HDHPs are HSA eligible (full eligibility details here). HSA allows individuals and families to save pre-tax dollars for health costs or long term health savings. In 2018, IRS guidelines allow for $3,500 for individual and $7,000 for family HSA contributions. These pre-tax dollars that include tax-deductible contributions, tax-free interest, and tax-free withdrawals (for medical expenses) can offset the financial costs of high deductible health care plans. In that way, short term cost might rise, but it provides a clear path and tax vehicle to save for healthcare for years to come.

These nuances of short-term vs. long-term health costs and savings require more research, insight, and education for individuals and families. There is no one sizes fits all, but we all must do our best to strike a balance to mitigate costs and increase savings in a healthcare landscape that sure isn’t making this easy. Let’s start with HSAs and go from there!



Lively is the modern HSA experience built for—and by—those seeking stability in the ever-shifting healthcare landscape. By harnessing modern innovation and deep industry expertise, Lively is committed to bridging today’s savings with tomorrow’s unknowns. Unlike traditional institutions hindered by bureaucracy, Lively’s commitment extends beyond initial set up to providing dedicated, ongoing support and education for every step. So each HSA can reach its maximum potential with minimal headache.

piggy bank on pink background


2024 and 2025 HSA Maximum Contribution Limits

Lively · May 9, 2024 · 3 min read

On May 9, 2024 the Internal Revenue Service announced the HSA contribution limits for 2025. For 2025 HSA-eligible account holders are allowed to contribute: $4,300 for individual coverage and $8,500 for family coverage. If you are 55 years or older, you’re still eligible to contribute an extra $1,000 catch-up contribution.

comparing hsa versus fsa


What is the Difference Between a Flexible Spending Account and a Health Savings Account?

Lauren Hargrave · February 9, 2024 · 12 min read

A Health Savings Account (HSA) and Healthcare Flexible Spending Account (FSA) provide up to 30% savings on out-of-pocket healthcare expenses. That’s good news. Except you can’t contribute to an HSA and Healthcare FSA at the same time. So what if your employer offers both benefits? How do you choose which account type is best for you? Let’s explore the advantages of each to help you decide which wins in HSA vs FSA.

Benefits of HSA employer matching

Health Savings Accounts

Ways Health Savings Account Matching Benefits Employers

Lauren Hargrave · October 13, 2023 · 7 min read

Employers need employees to adopt and engage with their benefits and one way to encourage employees to adopt and contribute to (i.e. engage with) an HSA, is for employers to match employees’ contributions.

Disclaimer: the content presented in this article are for informational purposes only, and is not, and must not be considered tax, investment, legal, accounting or financial planning advice, nor a recommendation as to a specific course of action. Investors should consult all available information, including fund prospectuses, and consult with appropriate tax, investment, accounting, legal, and accounting professionals, as appropriate, before making any investment or utilizing any financial planning strategy.



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