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July 09, 2005
Health Savings Accounts are the Obvious Choice for the Self-employed
According to an article in Forbes magazine, Health Savings Accounts (HSAs) are becoming the obvious choice for the self-employed.
Stephen Parente, an assistant professor at the University of Minnesota's Carlson School of Management, recently reviewed individual health insurance offerings throughout the U.S. and found that "in some cases the premiums for high-deductible plans are so much cheaper that buyers can fund almost the entire deductible with their premium savings."
Of course, we’re selling HSA-qualified health insurance plans every day at HSA for America, so the advantages of Health Savings Accounts are obvious to us. Rates vary tremendously based on age, zip code, insurance company, deductible and plan choice. When I look at rates with Blue Cross Blue Shield for my family, a $500 deductible traditional plan will cost $566/month. If I instead go with a $5,000 deductible HSA plan, my premium will be $259/month. So I’m saving in premium $3,600 of the $4,500 difference in deductible. Also, the HSA plan gives me a family deductible, while with the other plan each member of my family must meet the deductible.
We've noticed another interesting money fact: some people can actually pay for their premium with their tax savings. If I put $5,000 into my HSA each year, and I'm in a 28% tax bracket, I’ll save over $1,500 in taxes. That doesn’t quite pay for my health insurance premiums, but it basically cuts them in half.
It is an obvious choice when you look at the numbers, and we're investing energy and we're investing in the technology we'll need to spread this message further and wider.
Posted by Wiley Long at July 9, 2005 11:54 AM