HEALTH SAVINGS ACCOUNTS (HSA'S)- The future of health insurance

I get a lot of questions about HEALTH SAVINGS ACCOUNTS ( HSA's), these days. I am normally asked what are they and why are they good. What makes them unique.

So he we go, All about HSA's in a 10 minutes or less.

I refer to Health Savings Accounts as more like the Jiffy Lube of health insurance. I say that because with car insurance, if you need tires, your insurance does not pay for it, if you need an oil change your car insurance does not pay for that either. An HSA,kind of works the same way.

HSA's were created in Medicare legislation and signed into law by President George W. Bush on December 8th 2003. They were originally called Medical Savings Accounts (MSA) designed by Senator Bill Archer of Texas.

Mr. Archer realized that the two major benefits of health insurance that added the most cost were having prescription medication and doctor vist co-pays as part of the insurance policy. He believed if you eliminated that part of the plan,but still had the catestropic coverage, you would reduce premiums. He was correct.

IS IT WORTH GIVING UP DOCTOR VISITS???

The same question was proposed to Mr. Archer in the late 1990's. He said we have to make it worth it.

They came up with what in simplifed terms is a MEDICAL IRA. ( which is what the hsa is). It functions like an IRA, grows tax deffered and you fund it the same way. It is a 100% tax deductible account.

You can take the money you put into the account out for doctor visits or any medical expense. You put it in tax deferred, it comes out tax deferred ( for medical expenses).

For the year 2010 single policy holders can fund their HSA up to $3050 per year. A family plan can fund it up to $6150. Like an IRA if you are over age 55 you may add an additional $1000 per year.

The great thing about HSA's is you are not paying for benefits that you are not usings. If you do not see a doctor more than once a year, these plans are ideal for you. Of course, you save on premium.

ADDITIONAL FACTS:(sourse- Government Accountabilty Office)

In 2009 HSA's covered 10.5 Million lives in America

33% of all HSA participants have incomes of less than $35,000 per year.
36% of of all HSA participants did not previously have health insurance.
Consumers save and average of $1900 in the first year of owning the policy.

ADDITIONAL RESOURCES:

www.treas.gov
www.irs.gov/publications/p52/index.html


Eric Wilson, is the owner of the insurance agency I Sell Health, Inc. in the Chicago area. He services, Ohio, Wisconsin, Indiana, and Illionis. You can reach him toll free at 888-448-5370 or online at www.isellhealth.net.