Health Savings Account Blog

"We've been lucky." says Chapman, "I gambled when we opened our HSA that we could stay healthy. That helped us save on our health insurance premiums and invest it in our HSA. Every dollar we put in the HSA we took as a tax deduction. But if a family member had gotten ill, I don't know how I would have met our insurance plan's $5,000 deductible."

"But now, I have enough in the health savings account to cover health care emergencies, and our HSA is growing tax-free just like an IRA. And now we use it to pay for dentist and eye doctor checkups with pre-tax dollars."

Chapman says that Health Savings Accounts and high deductible health insurance plans make sense in the following circumstances:

First, the family members should be fairly healthy, requiring few doctor visits or meds on an ongoing basis. Therefore, families with infants should stick with a traditional plan that offers doctor visit and prescription copays that are absent in high deductible health insurance plans.

Second, you must be able to afford the risk of higher medical expenses for about a year and a half until you have enough money in your health savings account.

Chapman states that the most important factor is that you must be a disciplined saver. He recommends automatic maximum contributions into an HSA, at least until there is enough in the account to cover your insurance plan's deductible. If you aren't a saver, then don't bother with a HSA and high deductible health plan," according to Chapman.

No one health insurance plan fits all. But for healthy families, and especially older adults, HSAs are a great way to save on health insurance premiums and on taxes. "The older you are, the more you can save with one of these plans," Chapman states. "We have clients in their fifties and sixties from across the country who are not eligible for Medicare. They tell us that this is the only way they can afford quality health insurance."