[dheera]

I mean, it's instilled into society at every level in the US. If your company offers an FSA, it's asking to make a gamble on how much medical needs you'll have in the next 1 year. The "smart" way to write the tax law would be to just let taxpayers deduct whatever medical expenses they have at tax reporting time. But instead, they want you to make a bet because you're highly likely to either (a) not use all of it and lose it, or (b) realize you haven't spent all of it and spend it on random shit you wouldn't have otherwise bought, handing over profits to some suppliers who are in on the whole game, or (c) underestimate your medical needs and the tax man gets to tax some more of your money.

Stuff like this is all over the place in American life.

[smelendez]

I’d put working for tips in here as well.

From the worker’s point of view, it’s adding a gambling element to every transaction, complete with the usual gambler’s folk wisdom about which ones are going to pay out and how to maximize your luck, which I think is part of what makes it popular.

Everyone who’s ever worked for tips has stories of unexpected “wins” and the biggest jackpots are reported on like big lottery wins.

[ambicapter]

Conflating unavoidable risk in life with games designed to entice you to play while guaranteeing that you will lose is certainly some sort of perverse argument.

[dheera]

I'm not conflating anything here.

Nobody should be asked to make bets on their medical needs. They should just be allowed to tax deduct everything when the need arises.

You ARE almost-guaranteed to lose the FSA game, basically. You'll either bet too much or too little, and the collective house wins either way.

In my opinion, it's even more sickening that the system is designed to scalp a few extra bucks off of peoples' medical situations in this way. The gambling on sports, I could care less about.

[reaperducer]

Nobody should be asked to make bets on their medical needs.

Your entire argument sounds very much like how certain religions are against insurance because they view it as gambling.

It's led to the rise of an even riskier practice of shared health benefit pools, which market themselves as not being insurance even though they're pretty much the same thing as "mutual insurance," except that when you need them most, suddenly they're not insurance at all.

It also sounds very young. When you get over a certain age, you WILL use up that FSA. Every. Single. Year.

And if you're young enough not to, there are plenty of over-the-counter everyday goods that qualify for FSA, like Tylenol.

[dheera]

> there are plenty of over-the-counter everyday goods

Yep, that's how you've been sucked into the system. Oh, you didn't spend as much as you planned? We'll steal the rest of the budget unless you go buy some name-brand Tylenol that you don't actually need just to fill up the hard-earned money that you marked up as FSA that are on the verge of being stolen. That's the flip side of the casino: either the FSA admin pockets your cash, or Tylenol (TM) pockets your cash, or the IRS pockets your cash, depending on which direction in the triangle you mis-priced your needs.

Also, generic acetaminophen is cheap, and works just as well. If you're buying name-brand Tylenol just to fill up remnant FSA dollars, you aren't saving money.

> you WILL use up that FSA. Every. Single. Year.

It's strictly better to abolish the FSA and just let you tax-deduct your medical expenses. You win, the young ones also win. But no, the system wants to put the FSA casino in the way so that it can bank a few extra dollars off the young folks.

If you don't see it blindingly obvious that this is strictly better, and STILL want to play the FSA game, you've either been brainwashed by the system as well, or you've become part of the system in upholding something that is predatory.

[SoftTalker]

An FSA should not be a "bet" it should be set up for expenses you know you are going to need to pay: dependent care, recurring care and prescriptions, planned procedures. Your employer, not you, owns the account and keeps any balance remaining at the end of the year so you should not really guess at how much you contribute. An advantage of the FSA is that the full contribution is available immediately but the payroll deductions are spread over the whole year.

[everforward]

Those things are less static than you seem to believe. Eg recurring prescriptions; at least once a year my insurance gets mad about my scripts and requires a pre authorization that occasionally contains a stipulation that I try their “preferred” (read: cheaper for them) alternatives.

My planning is now wrong. Likewise I can only do FSA for planned procedures if I know close to a year ahead of time, which isn’t super likely. What portion of procedures are serious enough that insurance won’t call them elective, but also tame enough that you can put it off for a year for your FSA?

I don’t think I’ve ever had my FSA be completely correct. I’m always either over-stocked and losing money, or under-stocked and paying with post-tax dollars when I don’t have to.

[SoftTalker]

Again, the FSA is for known expenditures, not unknown or variable. It's not perfect and I'm not really even defending it; I think an HSA is generally a better idea but the FSA does have certain specific advantages.

[vel0city]

But for a ton of people that amount is extremely variable. Do you plan on getting into a car accident? Do you plan on getting an appendectomy in June when making your elections the November before? Sorry doctor, getting cancer wasn't in the plans for 2026, can we reschedule that to 2027 after my open enrollment?

I hate FSAs. Anyone have a good argument on why we should have them instead of just making HSAs open to everyone regardless of healthcare plan?

[topgrain2]

Requiring certain healthcare plans to access HSAs is the only thing that keeps HSAs from primarily being (in terms of amount of tax income lost to the program) a benefit for the upper-middle-class and higher, i.e. a regressive redistribution scheme.

Optimal (maximizing your benefit... and also cost in lost tax receipts) use of HSAs requires not touching the money until retirement. You pay medical bills with non-HSA money and keep the HSA money invested and growing tax-advantaged, like an extra retirement account. Spending the money you put in every year offers relatively tiny gains compared to keeping it in those accounts for decades.

Your options to mitigate this are to limit access, or to make it undesirable to keep money in them long-term, approaches to which look kinda FSA-like.

[vel0city]

> to make it undesirable to keep money in them long-term

We could just continue to enforce the 20% penalty indefinitely to get rid of the concept of these accounts turning into retirement accounts.

FSAs benefit the upper-middle-class and wealthy more than poor people as well. You'll see quite a bit more savings when your top end tax rate is 35% than 12%. They're also far more likely to be able to plan on setting aside some portion of their incomes into a FSA at enrollment time rather than the bigger effects of the gamble with lower income earners; the outcomes of the risk of overfunding is way more impactful for someone making little money.

The tax benefit helping the wealthy more seems to me to move more towards eliminating the tax advantages of healthcare spending entirely.

[SoftTalker]

Even if you spend the money you put in to an HSA every year, you still saved the marginal income tax on that money, which is a lot better return than most other short-term "safe" ways you might save for unexpected expenses.

[topgrain2]

Yes, it provides some benefits to fund one's HSA even if one spends all that money in the same year, but the cost of the program (in terms of tax income lost, including the time-cost of it) is far higher for accounts that don't do that, and instead spend none of the money on healthcare.

Like, remove the eligibility restrictions and just about 100% of people with a financial planner would soon have an HSA they intend not to touch until retirement, and those accounts would represent a large proportion of the cost of the program (most of it, in fact, I'd wager). At that point much of the program's cost isn't going toward helping people pay for healthcare, which is the nominal point, but toward helping people who (evidently, as they don't need to dip into their HSA before retirement) don't need help with medical bills have an even-more-advantaged retirement, meaning program efficiency for its stated purpose would suffer significantly, with much of it being diverted to improving the retirements of the already-well-off.

That's why it's gotta be restricted in some way. Not because it isn't beneficial to have even for same-year spending for people using such programs, but because the cost of the program going toward things that are not alleviating healthcare costs would go way up, which is to say, the program's efficiency (at achieving its intended goals) per dollar it costs would drop.

[SoftTalker]

Interesting. My financial planner has never suggested using my HSA as an auxilliary IRA. Maybe because he wouldn't earn any management fees from that....?

[deepsun]

Well, then any insurance is also gambling, according to your argument. Mean return of buying insurance must be always worse than not buying, but you don't want it to happen to _you_.

PS: except for home insurance in hurricane areas, government allows insurance plans to be non-actuarial, so essentially all other taxpayers pay for destroyed homes there. Gov even promotes rebuilding destroyed homes in the same place, instead of people moving out, only exacerbating the problem. Whether it's good or bad I don't know.

[carlosjobim]

> Well, then any insurance is also gambling, according to your argument.

That's what they are. Three big industries are net-losses to the economy by definition: banking, insurance and gambling.

[dheera]

> Well, then any insurance is also gambling

It literally is. You're buying a YES token on a black swan event that pays you if that event happens. The entire American system is built on gambling, and that's my point.

If you want, and you're good at math, you can even buy such insurance from Kalshi. Hell, if you're worried about an alien attack, you can buy insurance against that on Kalshi by buying the $0.05 YES for that. If aliens attack and mess us all up, you get a payout of $1. You can insure yourself against politics, against a market crash, against war, lots of other things. See my point? Insurance IS gambling.

BTW, there are other countries where healthcare is almost free and you don't need to buy insurance.

[nradov]

But will those other countries protect you from an alien attack for free?

[ar_lan]

> If your company offers an FSA, it's asking to make a gamble on how much medical needs you'll have in the next 1 year.

Conflating this with gambling is dishonest. I'll grant you that I've always viewed the way FSA is structured is weird, but this is absolutely not gambling unless you're completely unaware.

If you have any regular, annual medical expenses that are out of pocket, or plan to purchase any of the very wide variety of items that are eligible for FSA (e.g. gym equipment, many foods, glasses, contacts, etc. that might not be fully covered), then you can estimate this with exceptional accuracy.

This is not the same as playing roulette.

[dheera]

The non-gambling way of doing this would be to just tax deduct all of that stuff at tax time based on what you ACTUALLY spend.

Being forced to plan it and "lose it if you don't spend it" IS gambling, in my book.