Health Savings Accounts. What you need to know
Here are some things you should know before you consider switching health plans to a Health Savings Account (HSA):
1.Health Savings Accounts can cut overall healthcare costs by about 30% over the long term for most people but they are not designed to reduce your immediate out-of-pocket expenses for a medical insurance plan. For example, if your family pays $500 per month for total medical and dental coverage right now, you should still plan to pay $500 per month in a new HSA plan. The only difference is that about half of this monthly cost will go directly into your own account and only about half will go to the health insurance company.
Over the long run, this should be much more cost effective for you, but it takes time (usually about a year) to build up enough reserve in your account to be fully secure with the higher deductible insurance policy that HSAs require.
2. Many people who apply for a Health Savings Account do not qualify. Those applicants who are most likely to save the most money and be approved for coverage are young, self-employed, and healthy with historically few medical expenses. Those over age 60 generally do not realize any savings.
3. HSAs reduce income taxes. The amount you deposit into your HSA account each year is deducted from your taxable income in the same way an IRA contributions do. Interest and investment earnings also grow tax-free.
What You Need to Know about HSAs continued...
The links below will provide specific resources that will help you choose health insurance in your state, as well as multiple carriers offering online health insurance quotes.
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