If you’re wondering what some of the 2008 Candidates think about HSA’s and the Consumer Driven Health Care Movement - at least one has come out strongly in favor - Rudy Giuliani. Here is his Op-Ed piece from the Boston Globe, here’s an excerpt - go to the site for the rest:

Americans without employer-based insurance, or those who would rather have individual coverage, should enjoy the same tax benefits as the 175 million Americans with employer-based coverage.

We can do this through a new tax-free income exclusion up to $15,000 for Americans without employer-based coverage. Any amount a family pays less than $15,000 — for individuals, less than $7,500 — could be put tax-free into a Health Savings Account. This would create a powerful incentive for more Americans to own their private health insurance — making it portable instead of dependent on an employer.

If millions of people go into the marketplace looking for less expensive health insurance, it will drive the insurance companies to create less expensive products that meet individual needs instead of government mandates. Americans should have the option to buy health insurance similar to their auto insurance — covering major costs while leaving decisions about minor expenses to the consumer — while those happy with their current coverage can keep it.

Empowering people with real choice will improve markets and lower premiums. Expanded tax-free Health Savings Accounts could be used for insurance premiums, deductibles, and other expenses. With more flexibility and individual control, Health Savings Accounts can become a major source of tax-free savings and security for America’s middle class. As savings are created and there are reductions in the cost of health insurance, we will develop a new health insurance credit for low-income individuals and families so they can purchase private insurance tailored to their needs. We want to empower individuals, not the government.

The Health Business Blog has a funny anecdote about the ramifications of forced health insurance enrollment - excerpt here:

I almost laughed out loud when I read the Economist’s article on US health care reform: Economics focus, Creeps and bounds (July 21, 2007)

…Massachusetts obliges individuals to buy insurance or else face higher taxes. This requirement lowers premiums overall, by forcing relatively healthy, low-risk people into a system they might otherwise avoid. Their premiums help to cover the costs of people who are more likely to need health care.

Sounds logical doesn’t it? But it’s hard to square with my 26.3 percent premium increase for next year, which coincides with the mandate’s phase-in. Am I supposed to believe that my increase would have been 30 or 40 percent otherwise? What does “lowers premiums overall” really mean in a market where premiums are rising rapidly for most everyone?

I have yet to hear of an economic system that forced people to increase demand lowered prices. That just makes no sense. However, if the uninsured were to go to individual HDHP’s with lower premiums - that could help drive down the cost of not only premiums, but health care itself, which is really the only way to fix this problem.

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!

Recently - a new site, Tennessee Hospitals Inform launched, making health care information more transparent to the public. It actually tells people about what they can expect to pay for some procedures.

This is yet another side-effect of the consumer driven health care movement - transparency in pricing. While this site isn’t everything you could wish for, it is a great step forward.

As a former resident of Tennessee, I was there when TennCare cuts left hundreds of people who really needed health care on the streets. Kind of makes you stop and think what could happen if we went to a National Health Care plan, doesn’t it?

That’s why you should look into whether or not an HSA and HDHP would work for you, you can take back control of your health care destiny today!

Technorati Tags: HSA, Health Savings Account, TennCare

Here’s a great overview if What is an HSA?

Thanks to the Jewish Exponent for the info.

Created under the 2003 Medicare Act, a Health Savings Account is a tax-favored savings plan offered by many banks, insurance companies, brokerages and other financial institutions that can be used to pay for qualified medical expenses.

According to the Pennsylvania Institute of Certified Public Accountants, HSAs offer significant tax benefits to individuals who qualify.

But first, to establish an HSA, you must have health-care coverage under a high-deductible health plan. For 2007, these plans are defined as having deductibles of at least $1,100 for individuals and $2,200 for families.

HSAs are designed, in part, to help those with high-deductible policies pay for health expenses until insurance benefits kick in.

To be eligible for a HSA, you cannot be covered by any other type of medical plan.

Each year, you, your employer or both can contribute up to the amount of the deductible for your high-deductible health plan. An individual who is age 55 or older and not enrolled in Medicare may make a catch-up contribution of $800 for 2007.

HSA funds can be used to pay for qualified health expenses that the account owner, and his or her spouse or dependents incur. Qualified expenses include costs for doctor visits, prescription drugs, over-the-counter remedies, Medicare premiums — but not supplemental Medicare benefits — and more.

Once you meet your deductible, your health-insurance policy covers your medical expenses according to your policy provisions.

Funds withdrawn before age 65 for nonmedical purposes are subject to a 10 percent penalty, as well as taxes on the amount withdrawn. Taxpayers who are 65 and older have to pay taxes, but not a penalty, on amounts withdrawn for nonmedical reasons.

Be aware that funds remain in your HSA from year to year. This means the HSA funds continue to accrue tax-free until needed.

If you had an HSA in 2006, you may deduct up to the amount of your policy’s deductible, but not more than $2,700 if you have individual coverage or $5,450 for family coverage. For 2007, the maximum HSA deduction will move up to $2,850 for individuals and $5,650 for families.

The HSA deduction is an above-the-line deduction, meaning you don’t have to itemize to benefit from it. There is also no income or phase-out limit.

If your employer makes an HSA contribution for you, it is excluded from income and not subject to income tax or FICA. Additionally, Pennsylvania allows you to take a state income-tax deduction for HSA contributions.

Dividends and interest in the account are tax-exempt, which means the account grows tax-free until funds are withdrawn.

I just got done reading this article over at The Buffalo News - or, really more of an editorial on why government should take control of health care, and we should avoid free markets in the health care industry.

WHOA! Eric (the author) mentions people going to Canada to buy prescriptions, but he fails to mention that Canadians get to sit on waiting lists to see doctors to get scrips written. If he wasn’t trying to hard to downplay the benefits of free markets in health care, he would have probably mentioned that no form of socialized health care gets top quality physicians.

What he does get right is that, up until the movement towards consumer driven health care and transparency in pricing - the free market DID fail. But, there is evidence every day that it is starting to work. The generation of people just starting out in the workforce have a great option in Health Savings Accounts - and they have the ability to slowly take control of their own health care destiny, and get the power out of the hands of HMO’s and Insurance Companies.

I saw this great post over at TheSunsFinancialDiary about how to save money on health care. It lists 50 ways to cut costs, many of which revolve around the fact you have flexibility with your health savings account.

Check it out:

1. Ask for a deal: Call your insurer and ask about the rates it pays physicians in your area. Then ask your doctor if he’ll accept a similar amount.
2. Get the facts: The more you know about the real cost of your care, the better you’ll be able to negotiate discounts.
3. Pay up front, in cash: If you shoulder your own medical bill, paying in advance of treatment can get you a 10% discount.
4. Look for mistakes: As many as eight out of 10 hospital bills contain errors, increasing the tab by 25% on average. Keep a log of every test and medication you get, and check it against your medical file.
5. Check up before you check in: Call your doctor to get the names of the medical providers who will be involved in your treatment, and verify with your insurer that they’re in the network.
6. Track your spending: Use programs such as Quicken’s Medical Expense Manager to track your spending and alert you to potential savings such as overlooked tax deductions and possible billing errors.
7. Follow doctor’s orders: Simply doing what you’re told can save you your out-of-pocket share of the average $8,200 cost of a hospital stay.
8. Equip yourself: Bring (or buy) your own equipment such as crutches or braces instead of letting your hospital get them for you.
9. Seek smart counsel: Use a certified counselor or clinical social worker (average fee: $90 an hour) instead of a psychologist for mental-health therapy.
10. Visit a retail health clinic: Visit a walk-in clinic found at retail stores like CVS and Wal-Mart for minor illness such as Got an earache or upset stomach to save up to 25%.
11. Choose wisely: Don’t keep the same health plan year after year. Use your past annual medical spendings as a guideline to choose a plan that best suits your family’s medical needs.
12. Widen your network: If you have to use out-of-network providers, call your insurer’s pre-certification department to explain your situation and ask for coverage at in-network rates.
13. Follow the rules: Read the fine print on your plan to find out your insurer’s requirements for referrals and pre-certification.
14. Get what you deserve: Check your insurer’s website or call the help line to see if your plan covers alternative medicine treatments.
15. Don’t be denied: Don’t just let it go if your insurer denied your claim. Fight back by calling customer service or putting your appeal in writing. Document everything, including the times of calls and the names of the reps you spoke with.
16. Hire expert help: Consider hiring a professional billing and claims specialist to help you resolve disputes. The fees may be steep, but your savings could be big.
17. Check yourself out: Before signing up for a new insurance policy, go to MIB.com to see whether this insurance industry antifraud group has a file on you. Request a free copy to make sure the information provided about your health status is right.
18. Consider an HSA: If you have a high-deductible health plan (at least $1,050 for individuals; $2,100 for families), you are eligible to fund a health savings account (HSA).
19. Stay insured: Leaving your job next year? Switch to the lowest-cost plan during this year’s open enrollment. Then, after you quit, federal rules (known as COBRA) will let you stay on your employer’s health plan for up to 18 months, although you’ll usually have to pay the full cost.
20. Be flexible: Add up your co-pays, deductibles and other out-of-pocket medical expenses from last year to figure out how much to put into your flexible spending account. For every $1,000 you put in, you’ll slash about $300 in taxes.
21. Don’t lose it: You’ll forfeit any funds in your FSA that you don’t use by the end of the year or by March of the following year. Why not stock up on over-the-counter medical supplies like Band-Aids, cold and flu tablets and aspirin?
22. Game the system: If you’re close to the dollar limit for doctor or dental visits in a calendar year, book half your appointments in December and the rest in January.
23. Take the write-off: The IRS allows you to deduct medical bills that exceed 7.5% of your gross income.
24. Grab generics: Whenever you can, opt for generic drugs, which on average cost less than a third as much as their brand-name counterparts.
25. Go postal: Call your drug insurer and ask if you can order your prescriptions directly from the plan, which can save you 15% to 35% on your monthly co-payments at the pharmacy.
26. Split ‘em up: Ask your doctor if you can safely split a higher-dosage pill in half as high-dose pills are generally priced the same as their low-dose counterparts.
27. Ask for samples: Your doctor may be able to supply you with several weeks’ worth of medication at no charge.
28. Shop Mom and Pop: Your medicine costs can vary widely depending on where you buy. Go to discounters like Costco, Wal-Mart, and other drugstores for the best prices.
29. Find a cheaper alternative: Ask your doctor about a therapeutic substitute or an older drug in the same category as the brand-name drug.
30. Buy online: The best deal may be just a few clicks away.
31. Sign up for Medicare part D: If you’re 65 or older and don’t currently have drug coverage, sign up the government’s drug plan for seniors as soon as you can.
32. Go for the discount: Visit the Partnership for Prescription Assistance website (pparx.org) for more than 400 patient-assistance programs offering discounts on more than 2,500 medications.
33. Stick with the plan: Use in-network dentists as well.
34. Join a discount club: Enroll in a discount dental plan, offered through major insurance companies like Aetna, Cigna and WellPoint if you don’t have dental coverage.
35. Go to dental school: A clinic at a major dental school may save you even more on dental bills.
36. Choose cheaper fillings: Choose amalgam fillings over resin-based fillings. They are not just cheaper, but last longer too.
37. Don’t pay retail: Don’t buy your contact lens from optical retailers or your doctor’s office. Go to Costco or go online for better prices.
38. Forgo pricey extras: Forget about the anti-reflective coating on your lenses and pass up ultralightweight titanium frames.
39. Take an aspirin: because it can sharply lower your risk of a heart attack, especially for men over 40, women past menopause or a smoker.
40. Stress less: Reduce stress by taking a yoga class, listening to music and exercising for at least 30 minutes a day.
41. Stub your butt: Quit and save on health-care costs, homeowners insurance, individual life insurance, and dry-cleaning and dental bills.
42. Put a cork in it: Save money and stay healthy - have no more than one drink a day if you’re a woman, two if you’re a man.
43. Get moving: Keep yourself in shape so you don’t have to worry obesity and related medical costs.
44. Get a lunchbox: Why not? Taste good, save money, and consume less fat.
45. Drink from the tap: Bottled water has no proven benefit yet you keep drinking it.
46. Wash up: The best way to prevent flu: soap and water. Get into the habit of scrubbing your hands for about 15 seconds.
47. Let the boss help: Take advantage of any wellness benefits that your company offers.
48. Adult-proof your home: So you won’t have an accident at home and won’t need emergency room visits.
49. Floss daily: It’s the best way to prevent periodontal disease.
50. Question your tests: When it comes medical tests, sticking to the baseline exams rather than going for cutting-edge medical tests may means thousands in savings. And be sure to check U.S. Preventive Services Task Force (ahrq.gov/clinic/uspstfix.htm) for recommended tests.

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

Marty over at First Horizon MSaver’s Agent Portal makes a nice post about the DOL’s new guidance on health savings accounts. I’ll repost most of what he had to say here, but be sure to head over to his place and check out all the new HSA Information he has posted.

The Department of Labor (DOL) has just issued further guidance on HSAs, addressing how the contributions that employers make to an HSA might make HSAs subject to ERISA. Here is a brief summary from a news bulletin published by the American Bankers Association.

The new guidance makes it clear that even if an employer opens an account on behalf of an employee and even if the employer pays any fees associated with that account, the account is still under full control of the employee, and therefore is not considered to be an employee benefit plan and would not become subject to ERISA.

Another concern of employers has been the use of a limited number of HSA providers. It is logical that employers want to limit the number of checks they write. Nevertheless, the legislation is very clear that participants have flexibility as to where they place their accounts, unlike a 401(k). Employers have been concerned that by providing only one or just a few HSA providers, they are “making or influencing” the investment decisions of their employees. The DOL says that’s not the case, and provides some guidelines as to how to avoid the perception of “making or influencing.”

Finally, not surprisingly, the DOL affirms that HSAs are subject to the prohibited transactions provisions of section 4975 of the Internal Revenue Code, although provider incentives are not considered to be prohibited transactions if the incentive is deposited into the HSA.

For more than a year the American Bankers Association HSA Council, of which E. Craig Keohan, president of First Horizon Msaver serves as Chairman, has been arguing to allow plan sponsors more latitude to help employees make selections in their HSA program without incurring Title I liability under ERISA.

Technorati Tags: Department of Labor, HSA’s, Health Savings Accounts

From the Consumer Driven Health Care Institute:

On Thursday, the full committee of House Ways and Means held a Mark-Up session on a Bill introduced by Rep. Eric Cantor (R-VA) that would expand the application of and coorditaion of health savings accounts (HSAs) and health reimbursment accounts (HRAs). Click here for a complete text of HR 4511 (The Flex Health Savings Account Act of 2005).

Click here for more.

Technorati Tags: Ways and Means, Legislation, Health Care, Health Savings Accounts

Compliments of the treasury department:

FACT SHEET:DRAMATIC GROWTH OF HEALTH SAVINGS ACCOUNTS (HSAS)
THEN (2004)…
• 438,000 — Individuals were covered in November 2004 by HSA-type insurance plans — according to the America Health Insurance Providers (AHIP).
• 113,000 (roughly 240,000 individuals) — IRS data on individual tax returns reporting HSA deductions in tax year 2004.
NOW…
• 3.2 million — Seven fold increase to individuals covered by HSA type insurance plans (November 2004 to December 2005) — according to AHIP.
o 31% — Previously uninsured individuals buying health insurance on their own.
o 33% — Small businesses not previously offering coverage.
o Nearly 50% — Age 40 or over.
• $1 billion — Dollars invested in HSAs by Americans, according to data gathered by Inside Consumer-Directed Care (ICDC) newsletter Feb. 24 issue — based on financial data provided by more than 60 financial firms including JPMorgan Chase, Wells Fargo and The Principal Financial Group.
• 42% — Number of Individuals or families with incomes below $50,000 buying HSA type insurance on their own, according to “Health Savings Accounts: The First Six Months of 2005” report by eHealthInsurance.
THE FUTURE…
• 14 million by 2010 — Treasury Department projection of HSA policies (covering 25 to 30 million people) — based on current law.
• 21 million by 2010 — Treasury Department HSA policies estimates rise by 50 percent (covering 40 to 45 million people) — based on the President’s health care initiative.

Technorati Tags: HSA’s, Health Savings Account Growth