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The HSA... Getting Past the Spin
By Erin Shaughnessy
An HSA, or Health Savings Account, is an alternative to traditional health insurance coverage. With most Americans seeking affordable health insurance, Health Savings Accounts are being touted as an excellent option for those who want more control over their health care expenses.
Those interested in establishing Health Savings Accounts have a number of issues to address, the first being eligibility. In order to set up such an account, one must also purchase a High Deductible Health Plan, or HDHP. High Deductible Health Plans are often referred to as catastrophic plans. While the insurance premiums are low, as opposed to comprehensive health plans, high deductible plans will not usually pay for the first several thousand dollars of health care expenses. Before considering a Health Savings Account, you should determine whether or not you can afford the High Deductible Health Plan. If you decide to get an HDHP, the amount of your deductible is extremely important because it will determine the amount of money you are permitted to deposit in your HSA. For example, if your HDHP deductible is $1,000, you will not be able to contribute more than $1,000 to your Health Savings Account in a given year. As of 2006, the minimum deductible of your High Deductible Health Plan must be $1,050 for individual coverage, and $2,100 for family coverage.
Seniors enrolled in Medicare are not eligible for Health Savings Accounts. If you are a Veteran, and have received any health benefits from the Veterans Administration within the past three months, you are not eligible for an HSA. If you are an active-duty member of the military, and have Tricare coverage, you are not eligible to establish an HSA. If your spouse has a Flexible Spending Arrangement (FSA) or a Health Reimbursement Account (HRA), you cannot set up a Health Savings Account if your spouse's plan can pay for any of your health care expenses before your High Deductible Health Plan deductible is met. You and your spouse cannot establish a joint HSA. You cannot set up an HSA on behalf of your child. If you have any health insurance, other than the required High Deductible Health Plan, you are not eligible to establish a Health Savings Account.
Even if none of the eligibility restrictions apply to you, there are additional issues to consider before deciding to establish a Health Savings Account. Managing an HSA is not an easy task. You, the consumer, are totally responsible for the management of your account. Should you spend all of the money in your savings account, you will be responsible for providing all necessary receipts and paperwork to your insurance provider in order to prove that you have met your deductible. Additionally, the consumer is responsible for researching and deciding on quality health care services. Because Health Savings Accounts are consumer-driven, it is up to the individual to decide which medical expenses are necessary. On the surface, this sounds like a good thing. We all want maximum control over our health care spending. The drawback is that you may choose a superficial test ($500) over a more advanced test ($1,000) to save money. As a result, you may sacrifice your health to save your money. With comprehensive, or traditional, health insurance coverage, you would not generally have to face such a decision.
Supporters of Health Savings Accounts have concentrated on a few key advantages. The most frequently cited advantage is that HSAs are tax-free. This is true; Health Savings Accounts are tax-free when used for qualified medical expenses. Which products and services are considered qualified medical expenses? That is the sole responsibility of the consumer to determine.
Senate Republicans have used the increasing number of Americans establishing Health Savings Accounts as an argument for their legitimacy. While over one million Americans are currently receiving health care through HSA-eligible health insurance plans, this does not speak to whether such plans are a good choice. While many Americans are enrolled in plans that are compatible with Health Savings Accounts, supporters of such plans do not offer any information regarding the level of satisfaction experienced by HSA users.
If you are considering a Health Savings Account, it is extremely important that you thoroughly research your options in the interest of making an informed decision.
About the Author
Erin Shaughnessy is a free lance writer of political and consumer advocacy articles for online publications, and is a frequent contributor to Fast Health Insurance at: http://www.fast-health-insurance.com/
Article Source: http://www.simplysearch4it.com/article/23062.html
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