Health Savings Accounts (HSA) Gain
Momentum for Lowering
Consumer Healthcare Cost
The need for reduced
healthcare cost brought about the formation
of Health Saving Accounts about four and a half years ago and
their use has grown in use by American consumers exponentially.
Most consumers will agree that health insurance is too expensive
especially if you have a family to cover. Deciding what policy
makes the most sense can be confusing regarding co-pays and
deductibles, and features because the ones with the most
features and lowest deductibles cost the most so you are left
with the dilemma of determining how much will you actually use
if you pay for all the bells and whistles. This is where the
Health Saving Account can make it possible to get great coverage
with a reduced premium and have a reserve expense account for
when a major medical expense does occur.
Why Use A HSA Health Savings Account?
Most consumers choose health plans with low to medium
deductibles and co-pays for doctor visits and prescription drugs
to defray the cash outlay for health related expenses.
Deductibles are the amount you the consumer pay before your
insurance kicks in to cover the difference. While these
traditional plans can ease the pinch on the pocketbook at the
initial appointment or at the pharmacy, you actually pay for
these features in the form of a higher premiums.
The concept behind Health Savings Accounts (HSA's) is that you
choose a plan with a high deductible because plans with higher
deductibles have much lower monthly premiums. The savings in
premium for the high deductible plan is then placed into a HSA
account owned by you. The contributions to the HSA are 100% tax
deductible from your income up to the legal limits and the money
accumulates tax deferred sort of like an IRA for healthcare. As
long as the money is used for any qualified healthcare cost then
it is also tax free. The best part is the contributions are
yours to keep and they continue to accumulate interest. If you
change jobs or become self employed the HSA account goes with
you, and unlike Flexible Spending Accounts that have the "use it
or lose it provision" these accounts do not forfeit your
contributions.
Is A HSA Right For Me?
HSA's were originally created as a tax deductible medical
insurance program with the self employed consumers in mind, but
were quickly recognized as a viable solution to better manage
healthcare cost for all Americans. Some advocates believe that
HSA's are geared primarily toward wealthy self employed families
in good health who need a low cost plan for any major medical
expenses. Clearly it makes more sense for somewhat healthy
individuals to benefit more from the cash accumulation than
someone who actively is tapping into their insurance because of
health issues. The consumer market says these plans are growing
in favor within only a few years over 3 million have signed up
for HSA plans and that number is expected to be over 30 million
by 2010. Determining if an HSA is right for you will require you
to consider your current health insurance cost and how you feel
about covering the smaller healthcare expenses in exchange for a
lower premium. The savings in premium can be substantial and
once you have fund accumulation you will have enough to cover
doctor visits co-pays prescription and deductibles. The benefits
of the HSA are twofold; Lower overall insurance premiums and a
self managed tax deductible medical expense account. One of the
greatest uses in our current economy with the suffering
employment market would be the ability to use a HSA account to
fund a short term medical plan for a consumer or family income
earner who has lost their employer sponsored health insurance
plan.
How Do I Enroll in an HSA program
Most major health insurers such as Assurant, United Health Group
" Golden Rule and Aetna provide Health Savings Accounts
right alongside their traditional medical insurance programs.
Agent websites with carrier links will actually spreadsheet the
different plans side by side for you to compare. Agents also can
provide you a personalized comparison to show how you might save
by making the switch from traditional plan to an HSA plan. Many
of the carriers have already established bank accounts with
debit cards allowing you to sign up for the programs all at the
same time.
Health Savings Accounts are clearly a viable option and will
likely continue to offer more features and options as more
consumers learn about them and employers begin to introduce
them. The long term benefit is better managed healthcare and
lower overall cost to consumers.
About the author:
Chris Beard is a virtual insurance agent providing automated
online and tele-service insurance services to protect Florida
families with health insurance, HSA's and life insurance. www.trinity1financia
lgroup.com Instant online quotes: Health Savings Account
