I am a huge fan of Health Savings Accounts. I have one for me and my husband. (The kids were cheaper on their own plans. Go figure.) They bring consciousness to your well-being and your health care expenses. The basic concept is that you buy health insurance from a company (Blue Shield, for example) with a high deductible. You then put a lump sum of money into a Health Savings Account. This amount has increased a bit each year. You use the policy as you would any other policy, and you use the lump sum to meet the difference between what the policy pays and you pay with PRE-TAX DOLLARS. Of course, you have to use the money for medical expenses (or pay taxes and penalty for non-qualified withdraws) but you can use the money for a much greater variety of services and products (like dental visits and acupuncture). If you don’t use the money, it rolls over and grows tax-free through retirement. Save money and be healthy—what’s not to like?
Reasons to Use an HSA
While it takes a bit of time to get the hang of how to use the plan, once you understand it, it’s not a big deal. Complain, consternate, and confabulate all you want about national health care and the lack thereof. In the meantime, if you’re self-employed, consider an HSA. Look at these statistics, as provided by my account holder:
• People enrolled in HSA-type plans spend 5% to 10% more on preventive care, have 5% to 10% lower emergency room utilization, experience 10% lower medical costs, and are much more likely to use online health tools. (Source: Aetna national survey, April 2010)
• In a study of 2 million members enrolled in HSA-type plans, Cigna found that members used more generic drugs and that medication compliance improved while costs decreased. They also received recommended care at similar or better compliance rates. Members with chronic diseases such as hypertension, joint disease and diabetes experienced between 15% to 27% reduction in medical costs. (Source: Cigna study, January 2010)
HSA-type plan enrollment has increase 25% from January 2009 to 2010, and most of the enrollment was through employer-sponsored plans. Why? Because they’re cheaper for the employer, they give the employees more flexibility (which is seen as a huge benefit), and employees are healthier and at work as a result.
If you want to explore how an HSA might work for you and need a referral, give me a call or send an email. I’m happy to help.