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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