Healthcare Moment

HSA 2: HSA ADVANTAGES

In January more Americans bought Health Savings Accounts than in all of 2004. In February, that number doubled again. There are good reasons why HSAs work for most individuals, families and companies. I’m JoAnn Laing and this is Healthcare Moment. I’ll be back to tell you more after this.

Despite misgivings by some experts, health savings accounts are thriving. The reasons are many.

HSAs are a tax saver. Not only does an HSA let you cover your medical costs tax-free, but also your contributions can nudge you into a lower tax bracket — saving on your tax bill, not just your health care costs.

HSAs pay for more healthcare procedures than traditional insurance plans… acupuncture, visits to the chiropractor, fertility treatments, therapy, and laser eye surgery — just to name a few.

HSAs are portable, just like an IRA, they travel with you from job to job, and pay for COBRA when you don’t have a job.

Plus, an HSA gives you control and choice over your healthcare decisions and spending.

(For more information, contact your insurance broker and your financial advisor. I’m JoAnn Laing with Healthcare Moment.)

HSA 3: SPEND LESS

Seven out of ten American spend less than five hundred dollars each year on medical procedures and visits. I’m JoAnn Laing and this is Healthcare Moment. I’ll be back to tell you more after this.

Most Americans spend more on healthcare insurance premiums than professional medical services. For more than 70% of Americans, doctor costs do not exceed five hundred dollars each year. Of the remaining thirty percent, most usually spend under five thousand dollars in any 12-month period.

Given the fact that HAS premiums usually cost less and you can decide how to spend your service dollars, most Americans with HSAs will come out ahead this year. The catch is that HSAs require you to be a smart shopper for medical services.

Check the Internet for comparative information, and ask your insurance as well as family and friend about cost and efficacy.

Then, you decide which physicians or other health care professionals to see, and which treatments are right for you.

One caveat --- be prepared for sticker shock when you find out just how much that visit to the doctor’s office really costs. Remember, after your deductible the bills are paid by your insurer.

(For more information, contact your insurance broker and financial advisor. I’m JoAnn Laing with Healthcare Moment.)

HSA 4: SAFETY NETS

Polls show most Americans worry about what happens when a catastrophic illness hits them or their families. HSAs are affordable safety nets. I’m JoAnn Laing and this is Healthcare Moment. I’ll be back to tell you why after this.

Because most Americans fear a catastrophic illness will bankrupt their families, finding low cost health insurance is a major goal. But, cost and coverage often collide.

HSAs are aimed squarely at this problem. Besides having lower premiums, most HSAs have two safety nets built in. The first is your deductible --- the point at which the insurance plan starts paying for most, if not all, of your healthcare.

The second is your out-of-pocket maximum, the point at which you don’t have to spend another dime on covered services for the rest of the year. Combined with their low cost health insurance in most states, HSAs go a long way to easing the bankruptcy fears of most Americans.

(For more information, contact your insurance broker. I’m JoAnn Laing with Healthcare Moment.)

Most Americans qualify for a Health Savings Account. That doesn’t mean HSAs are right for you. But there are some things to consider. I’m JoAnn Laing and this is Healthcare Moment. I’ll be back to tell you more after this.

Because HSAs have two purposes --- reduce total healthcare costs for employers, employees and their families while building a retirement nest egg…more and more Americans are interested in owning and using them.

The IRS makes eligibility simple. You need to be under 65, not dependent on someone else for income tax purposes, not receiving Medicare or Social Security benefits, and only covered by a qualified high-deductible health plan. This high deductible plan can be as low as one thousand dollars for an individual and two thousand for a family.

Like every government ruling, there are exceptions but in the broadest sense those are the requirements. Given the rising cost of healthcare insurance --- up seventy percent since the year two thousand ---- in most states, HSAs are a bargain.

(For more information, contact your insurance broker. I’m JoAnn Laing with Healthcare Moment.)

HSA 6: 2-PART PROGRAM

HSAs are high deductible plans that can work for most American families. I’m JoAnn Laing and this is Healthcare Moment. I’ll be back to tell you more after this.

There are two parts to any HSA --- a high deductible insurance policy and a medical savings program much like an IRA.

The key feature of any HSA is that after you pay for all the medical expenses up to the deductible limit --- as low as one to two thousand dollars --- the insurer picks up almost all other expenses.

Most Americans do not spend $500 on their medical bills each year. With a funded HSA account, the money that remains each year goes into a retirement account or for use in later years to pay tax-free for any large medical expenses that occur later in life. This year the maximum HSA contribution amount is twenty six hundred and fifty dollars for an individual and fifty two hundred and fifty for a family.

While HSAs aren’t for everyone, they are a new, viable opportunity for millions of Americans to have healthcare insurance, and build a tax-free retirement nest eggs for when they really need it.

(For more information, contact your insurance broker or financial advisor. I’m JoAnn Laing and this is Healthcare Moment.)

Some people call HSAs “Medical IRAs.” Like IRAs they are designed to save on tax dollars. I’m JoAnn Laing and this is Healthcare Moment . I’ll be back to tell you more about saving at tax time after this.

Health Savings Accounts, HSAs to you and me, can save you money at tax time. While reducing your taxable income, the funds set aside are available anytime for any approved medical procedure --- with no tax or withdrawal penalties.

Any earnings (e.g., interest or dividends) they may accumulate over time are never taxed, even after age 65, if the money is used directly for medical expenses. As with IRAs, the money is yours. You decide how much to contribute up to the allowable limit and you own the account even if you change jobs or stop working.

An added bonus, you don’t have to itemize your HSA contributions to get the tax write-off for medical expenses. It comes right off the top — above the line — and gets deducted from your gross income.

(For more details, contact your insurance agent or accountant. I’m JoAnn Laing and this is Healthcare Moment.)

Besides being cheaper healthcare insurance, Health Savings Accounts have other financial advantages. I’m JoAnn Laing, and this is Healthcare Moment . I’ll be back to tell more after this.

HSAs are more than a healthcare program. They are a source of investment income for handling medical emergencies and building a retirement income. HSAs are there when need to withdraw funds for medical procedures --- no tax or withdrawal penalties. And the money you don’t withdraw has the potential to grow and accumulate interest and dividends tax free.

HSAs are much like 401(k)s or IRAs, but with an important difference. Money in a typical retirement account is there to stay — you incure tax penalties if you withdraw it before reaching retirement age. With an HSA, when you use the money for medical expenses, your withdrawals are tax-free. HSAs don’t replace your current retirement accounts, but they can be a major supplement to your retirement savings.

There are drawbacks to HSAs: the most off-putting is learning how much a medical procedure costs. But sticker-shock aside, HSAs have many advantages including being a safety net against catastrophic healthcare bills and tax savings.

(For more information, check with your accountant or financial advisor. I’m JoAnn Laing and this is Healthcare Moment.)

An educated consumer is a better consumer. Health Savings Accounts will force Americans to be better consumers. I’m JoAnn Laing and this is Healthcare Moment. I’ll be back to tell you more after this.

HSAs require more thought by patients. Because the first dollars spent are your money, HSAs require that you know more about any medical treatment and the people who are helping you.

Help in this area is on its way. Right now, we are seeing the continuing explosion of information. In California, hospitals now must post their rates. Drug prices are being posted in some venues and drug trials are being publicized.

Knowing when and how to buy healthcare services can save you, your family and company large amounts of money. HSAs are the first step towards a more rationale healthcare payment system.

The Internet has made healthcare information more available, and HSAs give consumers reasons to find out as much as they can.

(I’m JoAnn Laing and this is Healthcare Moment.)

HSA 10: POOR HEALTH, LOW INCOME

Seven percent of Americans consume a majority of healthcare resources and costs, and the majority of the working uninsured have low incomes. They won’t be left behind by HSAs. I’m JoAnn Laing and this is Healthcare Moment. I’ll be back to tell you more after this.

Critics of HSAs worry that those with poor health (the 7% who spend more than 50% of the country’s healthcare resources) will be forced out of the healthcare system because they will use up their high deductible faster. Because most HSA policies pay for the lion’s share of expenses above the deductible, and everything above the out-of-pocket maximum, which is $5,200 for an individual and $10,200 for a family, HSAs will actually work in the favor of those with ill health.

Also, critics of HSAs worry that those with low incomes will not have health insurance. HSAs with lower premium cost puts insurance within reach for more Americans at all income levels. And, the tax deductible of contributions may put the individual/family into a lower tax bracket, perhaps making eligible for an earned income tax-credit.

(Check with your insurance agent about HSAs. I’m JoAnn Laing and this is Healthcare Moment.)