Health savings accounts (HSA) teamed with eligible health insurance can lower your monthly medical insurance premium. HSAs are often less expensive than other health insurance plans.Health savings accounts give you all of the advantages of a 401(k) with an added benefit ñ you can take money from the account, tax free, to pay for qualified health care expenses. One-hundred percent of what you spend from your health savings account is never taxed.Once your out-of-pocket expenses reach the annual deductible (unless you have chosen a program with co-pays), your health insurance then pays for your covered expenses, including medication and office visits, up to a lifetime maximum that can vary according to your plan. Since you pay the negotiated fee determined by your insurance carrier, your health care dollars buy more care. You can even spend your health savings account dollars on certain qualified expenses not normally covered by your health insurance, such as glasses.Health savings accounts typically require you to have a higher deductible. This is done so that insurance companies do not have to process and pay claims for routine, low dollar medical care. Your monthly premiums may be much lower, however. An HSA allows you to put your deductible into your account, tax free. If you have a balance in your HSA at the end of the year (or if you choose not to use your HSA), you do not lose it, it accrues interest and it continues to accumulate from year to year like an IRA, only better. This is great for accruing money for long-term care or even for retirement. At age 65, the money can be withdrawn penalty free for any reason.When comparing between an HSA and traditional family plan insurance, you must look carefully. At first glance, the typical family insurance may look like a better deal, but you need to see how you use your health insurance and what you use it for. Lower deductibles may mean your insurance kicks in earlier, but at what expense? You could easily pay $2,000 more in premiums for a traditional insurance plan, all of which is GONE once it is paid, whether or not you use your insurance. With an HSA, the premiums are less costly and the money you need to pay towards your deductible could be earning interest instead of being paid to your insurance company.From a practical standpoint, we hated spending so much money in yearly premiums for services that were not needed, especially when we still had to come up with money to meet a deductible. To us, it seemed like we paid out so much money before we could even start to benefit from the insurance. Traditional health insurance no longer seemed like a financially sound use of our hard earned dollars.HSAs put competition back into the health care arena. Medical expenses have soared since most first dollar expenses have been paid for by insurance companies. Individual consumers are better able to decide how, when and where to spend their health care dollars with an HSA. People who buy medical services using their personal HSA funds will shop around for the best VALUE for their dollars, NOT the least expensive (which is a major problem with insurance companies and managed care contracts). The shift is for providers to serve their patients, not insurance companies.HSAs encourage people to stay healthy by making many preventative expenses eligible for coverage through the HSA accounts. By letting people keep any money they donít use, HSAs provide a powerful incentive for people to take a more proactive approach to their own health care. People are able to find the type of health care that works for them by allowing HSA funds to pay for alternative, holistic and preventative treatment in addition to making investments.A Health Savings Account can help both short and long term money savings bydeducting 100 percent of the HSA contribution from your taxable income, having money in an HSA accrues interest on a tax free basis, paying no penalties or taxes when you use the HSA to pay for qualified medical expenses and having lower than typical premiums because of the high deductibleA Health Savings Account gives you more personal responsibility for your health. But in thinking of our future, one where Medicare will probably be in serious financial trouble and health care costs will grow incredibly, an HSA makes good financial sense. Because you are spending your own money, you are no longer subject to the allowances or rejections by a managed care company or review that may or may not decide to approve your choice of care.There are eligibility requirements for HSA contributions, so if this is something that interests you, contact your insurance agent or financial advisor and find out if this program is beneficial for you.Palmer Chiropractic494-1395www.palmer-chiropractic.com
