Have you ever heard of an HSA – also called a Health Savings Account? If not, you may want to. Barb and I have one and are delighted.
The Wall Street Journal reports, “Healthcare expenses are becoming an even bigger part of the retirement equation, and more experts are recommending a health savings account to help solve it.”
Because, the WSJ says, “Money from HSAs can be used not just for current healthcare expenses, such as co-pays and deductibles, but to save for future expenses, such as Medicare premiums, on a tax-free basis.”
This year, “the maximum annual contributions are $3,000 for individuals, and $5,950 for families.”
The Journal notes that, “to qualify for an HSA in 2009, clients need to be enrolled in an insurance plan with a deductible of at least $1,150 for individual coverage, or $2,300 for a family.”
Typically, “HSA-qualified high-deductible health plans have lower premiums than more traditional types of plans, such as preferred-provider organizations, PPOs, or health-maintenance organizations, HMOs.”
Even Clark Howard, who claims on his CNN Show, Radio Show, and website to help people “save more, spend less and avoid rip-offs” has become a big advocate of HSAs.
Admittedly, the most interested folks in HSAs are the self employed and small business owners, but more corporations are starting to offer HSAs to employees, as well.
Each HSA has two sides to it. (1) a high-deductable medical insurance policy for which you pay a monthly fee, and (2) a health savings account into which you put money into a tax- free account, which earns interest and can be used down the road to pay for healthcare.
It will change your approach to healthcare because you become the customer, not the company supplying the insurance. And, you purchase basic health care with your dollars.
Barb and I find this makes us better consumers. We look for the best price and the best value for everything from OTC medications, to prescriptions, to dental cleanings, to preventive health exams.
But, buyer beware. Not every company offering HSAs is a winner. One Web site lists the 10 worst companies out there today.
I recommend you find companies that charge no up front fee at all. When setting up your HSA, be aware of what charges are involved. There shouldn’t be any!
We all know that health care in the United States is outrageously expensive. And I think a big reason for this with that employers offer to provide employees health coverage in lieu of pay raises and other benefits.
The problem with this system is that it lead to people who do not care how much health services cost because they weren’t paying. It was “someone else’s money.”
Health Savings Accounts (HSAs) will provide us with an alternative to that incredibly expensive system. HSAs are tax-advantaged accounts that allow you to shop around and keep track of how much health care costs you.
And, if you remain healthy and are a good shopper, you can end up with a big pile of cash.
Now, if you see the doctor frequently, an HSA may not be a good idea for you. But for many, it’s a huge improvement because you will be more conscious about how much you’re spending.
But even Kaiser Permanente, one of the largest health care companies, is getting in on the HSA game early.
Why? Simply put, the company is concerned about losing customers to individual HSA plans.
Information is slowly trickling out about HSAs and now the U.S. Treasury Department has an HSA information website and a FAQ website where you can learn more.
Also, Wikipedia has an article on HSAs.
You can shop and compare plans at the HSA Insider website.