Health Savings Account Blog

Currently HSAs can only be opened and funded by those with qualifying high-deductible health plans. Roony explains that with a $2,600 deductible plan that has full prescription coverage, a senior would have enough money from Medicare to pay for his policy, and contribute $1,400 annually to his HSA. In addition, he would no longer have to pay $1,400 for Medigap and a $420 prescription-coverage premium. So even though the deductible is higher, the money saved in the Health Savings Account, and from not needing Medicap or prescription drug coverage, more than covers the deductible.

In addition to helping seniors save money and control their own healthcare, this proposal would save the U.S. Treasury billions annually. If nothing changes, estimates show that Medicare and Social Security will be 14% of GDP by 2079. And Medicare’s expenditures are estimated to be more than those of Social Security by 2024. This is a looming crisis that desperately needs a solution.

HMO’s, Medigap insurers, and the political left will certainly not like this idea. Neither will opponents of President Bush’s ownership society. Perhaps to their dismay though, the popularity of Health Savings Accounts are soaring, and it will become more and more difficult to oppose this type of legislation. Cutting government expenses, saving seniors money, and putting more control of healthcare expenses in the hands of those who use it – this sounds like a win-win to me.