In an article written for the The Pueblo Chieftan, U.S. Rep. Bill Thomas (R-California) had this to say about HSA’s:

Similar to the growing list of Americans buying hybrid cars to combat the high cost of gas, today more than three million Americans have opted for an innovative health insurance option called a health savings account to rein in the cost of health care. Here’s how it works: like a hybrid car powered by a combination of gas and electricity, HSAs combine a high-deductible health plan and a tax-free savings account.”

Hat Tip: HSA Focal Point

Technorati Tags: HSA’s, Health Savings Accounts, Rep.  Bill Thomas

If you are under 65 and withdraw funds from your HSA for a non-qualified expenses you must pay income tax and a 10% penalty tax on those funds.  If you are 65 or older, you can spend out of your HSA for non-medical and non-qualified expenses, and are not penalized the 10%, but you must pay income taxes on the amount you withdraw.

See also: Health Savings Account FAQ’s 

Technorati Tags: HSA’s, Health Savings Accounts, HSA FAQ’s

Can you purchase a Pharmacy Discount Card and still be eligible for an HSA?

The answer to this is yes, however, you cannot pay for the card with your HSA funds, since it is not a qualified medical expense.

Technorati Tags: HSA, Pharmacy Discount Cards

Tarren Bragdon has an article at The Maine Heritage Policy Center Website covering why Health Savings accounts are good for Maine. The big point in the story is to show how Maine residents can accumulate thousands of dollars in an HSA, while still maintaining comprehensive health care coverage. Here are some other key points to his report:

Premiums for HSA-eligible plans are typically 28-35 percent lower than traditional health insurance premiums.

HSA plans provide individuals the same discounted prices for health care services given to insurance carriers and large companies.

HSAs put real money in the pocket of employees.

30 percent of those buying HSA-plans were uninsured.

HSA enrollment spans all demographics - young and old with low to high incomes.

HSA premiums are increasing at the rate of inflation, as opposed to their traditional counterparts that are increasing two to three times that rate.

HSAs promote fiscally conscious health care consumers.

Click here to read the full PDF version of the report.

Technorati Tags: Maine Policy, Health Savings Accounts

The HSA Savings come from the money you save on health insurance premiums. In 2003, the average family spent around $9000 on health premiums.

Remember HSA’s are two parts: an insurance policy and a tax-free account. So, if you take $3,000.00 of that $9,000.00 (leaving $6,000.00 unspent) and you or your employer purchase a health insurance policy that covers your medical expenses above $5,150.00, the high deductible health insurance plan is in place.

Now, according to the law, you are allowed to deposit – tax free – up to $5,150.00 to pay for the routine medical care. Withdrawals for medical care are tax-free. Your insurance company may administer the account or you can open the account with an HSA administrator or a bank that offers Health Savings Accounts. To review, out of the $9,000.00, you spent $3,000.00 on a health insurance policy with a $5,150.00 deductible. The insurance covers your family’s health care costs that exceed the $5,150.00 deductible. Out of the $6,068.00 remaining, you and your employer deposit $5,150.00 into your health savings account. It is now your money. If you leave your employer, it is still your money. It follows you. What you do not spend out of the account rolls over, so if you and your family only have health costs of $2,000.00 this year, you and your family would have $3,150.00 remaining in your Health Savings Account. So, next year, you will start your Health Savings Account with $3,150.00, plus the interest you earned, and you and your employer will add another $5,150.00 to your account, giving you ($5,150.00 + $3,150.00 = $8,300.00) to spend next year. So, you and your employer just saved $918.00 in health care costs in the example above.

Over time - you will see dramatic savings with this plan - up to thousands of dollars a year after a few years.

Technorati Tags: HSA’s, Health Savings Account Savings

If you’re not lucky enough to work for an employer who is offering health savings accounts as an option to traditional health care coverage, or you’re self employed, or unemployed, you can use the combination of a high deductible health plan and a health savings account to provide for your own medical coverage.

The process is actually quite simple - you can shop around numerous insurance carriers, as many of them offer a qualifying health plan in conjunction with a health savings account. Your other option would be to determine a carrier for your HDHP, and then locate an HSA administrator to create the account for you.

You can find HSA Specialists like First Horizon MSaver to tell you more, and help you get started.

Technorati Tags: Personal Health Care, HSA Questions, Opening your own HSA

See also:
What is an HSA?
Health Savings Account Eligibility.

The recently passed Massachusetts law requiring everyone in the state to purchase some sort of health insurance is likely to increase HSA enrollment - as other private insurance options are most likely too costly for the currently uninsured.

From a recent article on the Kaiser Network State Watch:

Amy Lischko, director of the Division of Health Care Policy at the Massachusetts Department of Health and Human Services, said HMOs tied to HSAs will help the state meet two of the law’s goals — appealing to uninsured individuals by offering plans with lower monthly premiums and encouraging residents to use health care services more responsibly by imposing high-cost out-of-pocket deductibles (Krasner, Boston Globe, 5/17).

While I sincerely hope that government mandated coverage will help the uninsured discover that HSA’s are a cost effective means of health coverage, I’m not sure that the legislation will do anything to address the real problems in the private health coverage sector - in fact, by legislating demand, it may be a reason for private health care coverage to increase their premiums even more.

Technorati Tags: Massachusetts Health Care, Health Savings Accounts

Wikipedia is a well known Internet resource, and their entry on Health Savings Accounts is no different.

Check it out here.

This is one of the most comprehensive histories of HSA’s that I’ve seen.  Enjoy.

Technorati Tags: HSA’s, Health Savings Accounts, Wikipedia

Good news from the May 5th article from BlackEnterprise.com - HSA (Health Savings Account) Participation has tripled since March 2005.

From the article:

The plans have grown in popularity since President Bush signed HSAs into law in 2003. In January 2006, more than 3 million people were covered by high-deductible health plans linked to health savings accounts, according to a survey by America’s Health Insurance Plans, an industry trade group. That’s up from one million in March 2005.

That’s good news for the industry as a whole - as more and more people open their HSA’s and High Deductible Health Plans - the critics will begin to quiet as they see the improvements they are making in the lives of consumers.

See also:
What is an HSA?
Health Savings Account Eligibility.

Technorati Tags: BlackEnterprise, HSA Participation Numbers

Martin over at The HSA Focal Point recently attended the Consumer Driven Health Care Conference in San Francisco - and had some interesting paralells to share regarding the health care industry and the automotive industry:

Herzlinger said that consumer driven industries need three components: 1) innovative entrepreneurs like Henry Ford, 2) good marketers like Alfred P. Sloan and 3) information providers like J.D. Powers.

She said that Henry Ford discovered how to make cars cheaply, Alfred Sloan realized that the public wanted choices, and J.D. Powers provided the information needed to evaluate cost and quality.

Those are some very interesting points - and I have to say that I greatly agree - this is definately the direction that the health care industry is headed - innovation and price transparancy are going to be of paramount importance in the coming years.

Technorati Tags: Consumer driven health care, health care, HSA’s, price transparency