I ran across The InsureBlog the other day, and today they had a great article that I wanted to comment on. It gets summed up pretty well in this excerpt:

“A 50% cut in health insurance premiums would only reduce the number of uninsured Americans by 3%, estimates a Rand study out Monday, which suggests that incentives and government tax cuts won’t lead to universal coverage.”

Thankfully - the guys at InsureBlog get it right, by pointing out that these comments are made, despite compelling evidence to the contrary.

High Deductible Health plans may not be attractive to the chronically ill, of course - their premiums are going to be higher (although not up in the stratosphere, as they would with a PPO, if they even qualified).

My personal opinion is that the HSA+HDHP is attractive not only because of the cheaper health insurance (no one gets excited about HAVING to pay for something), but also the financial benefits of the HSA (tax diversion, interest income). THAT is where the interest comes in. If you were able to contribute $15k over 7-8 years to your HSA, the interest alone would pay your premiums (not that you can actually pay premiums with the HSA, it’s a bottom-line thing). That’s not considering the tax benefits on top of that.

Marty over at The HSA Focal Point has some good stuff to show you how much an HSA can save an employer:

Anyone looking for proof that an HSA-style health plan can save an employer money should read the article posted on jsonline.com.

The article said that thanks to an HSA plan, Manitowoc County (Wisconsin) will save $1.1 million in 2008. Its employees will save $685,000. On top of that Employees pay none of the insurance premium and the county puts $3,000 a year into the employee’s HSA, which fully covers the deductible.

Now - Check this out as well:

An individual can deposit up to $2,850 into their HSA, and a family can deposit up to $5,650. For a family in a 28% tax bracket, this will reduce their taxes by $1,582. If they start their coverage July 1 and apply the tax savings towards their premium, they will reduce their monthly premium by $263. In many cases this will be enough to entirely cover the premium of their high-deductible health insurance plan.

So in other words, your coverage may not cost you a penny for the remainder of 2007.

I suggest, especially if you’re young, that you look into HSA’s as an alternative to traditional health care plans. If you have a great PPO/HMO plan from your employer, congratulation…but don’t rest too easy. Traditional health care plans are becoming too expensive for businesses to manage!

The HSACrusader has posted a nice article outlining more of the benefits of Health Savings Accounts - and in the following excerpt, he’s outlining the different approaches one can take as an individual HSA Consumer:

The number-one reason to get an HSA: the potential to plan and save for a lifetime of benefits.

The first option for using HSA dollars is to spend them now in order to maximize one’s health. This might mean paying for services not normally covered by traditional health plans. For example, a diabetic or a person with heart disease risk factors, such as elevated cholesterol, blood pressure or stress, might use tax-free HSA dollars for nutrition counseling from a registered dietitian to lower cholesterol and weight; exercise counseling to develop an exercise program; and stress-management counseling to lower stress in life. It can mean using HSA dollars to pay for “health coaching” from a wide variety of traditional and alternative health care professionals.

The second option is to save for future deductibles. Accumulating enough money in the HSA to pay several deductibles creates a comfortable feeling—you know you have already saved for your future health care expenses.

The third option is to accumulate unused dollars to spend during retirement. Fidelity Investments estimates that the average couple going into retirement will spend $190,000 in health care expenses not covered by Medicare. In a perfect world, maximizing health and savings now will lead to a substantial accumulation of money that ultimately pays health care expenses for the rest of one’s life.

Go there to read the rest of the article.

Technorati Tags: HSA Strategy, Health Savings Accounts

The creatively named “YoungNHealthy” asked a question in the previous post concerning what options are available for the balance of your HSA account.

The answer to that is good news for anyone that has an HSA account. Your unused balance can draw interest as long as you want it to.  If you choose to withdraw before the age of 65, you have to pay taxes on the amount.  However, after the age of 65, you are allowed to use that money for anything.

So, besides helping you control your own health care dollars, and offering tax advantages, someone who is, say, 25, contributing the maximum contribution each year can have a great nest egg built up by retirement.  You can even pass the account on to your children!

Technorati Tags: HSA Benefits, Retirement, Nest Egg

This is the official launch of the “Truth about HSA’s” website. The mission of this site is to help get HSA information in front of people who need it, and let people who wouldn’t benefit from them know as well. This site will strive to be a resource for unbiased HSA information - without all the political mumbo-jumbo that has come along with them.

So - come back soon, and check out what we have to offer.

For more information - check out the About and Legal pages.

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