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April 26, 2007
Health Savings Accounts Continue to Grow as a Viable Solution to Rising Medical Costs
There are two things a small business or a self-employed person dreads the most -- taxes and health care costs. Tax season is a painful reminder of both.
However, the small businesses and self-employed entrepreneurs have been increasingly turning to a solution that provides a much-needed break: Health Savings Accounts. Health Savings Accounts help control costs and provide attractive tax advantages; both for people who purchase their own insurance (self-employed) and for small business owners.
The market is headed in this direction. The U.S. Treasury estimates the number of Americans with Health Savings Accounts will grow to 25 million to 30 million by 2010. Many insurance companies are seeing the growth in HSA popularity and are marketing a variety of products.
United Healthcare's Golden Rule Insurance Co., based in Indianapolis, pioneered the HSA concept about 15 years ago and now 40 percent of its customer base -- almost half -- have HSA accounts. Other companies such as Aetna and Blue Cross Blue Shield, continue to enter the HSA market in large part because of their attractiveness to small business and self-employed individuals.
That attraction is being driven, in part, by prohibitive costs. According to the Kaiser Family Foundation Employer Health Benefits 2006 Survey, health insurance premiums have "increased more than twice as fast as workers' wages and over all inflation." Premiums have actually increased by 87 percent over the past six years.
The same report noted that the self-employed pay an average of $11,480 for family health coverage. This is where Health Savings Accounts become an increasingly attractive solution.
A self-employed HSA policyholder doesn't dread the coming tax deadline with as much trepidation. The HSA allows that self-employed business owner to put money into the account tax-free, where it grows tax-deferred, and can be withdrawn at any time for qualified medical expenses without any tax penalty.
Any money left in the account at the end of the year rolls over to the following year, which allows the money to grow and be available for medical needs for years to come. Congress, in fact, just made Health Savings Accounts even more worthwhile by expanding the maximum one can save in the accounts to $2,850 for an individual and $5,650 for a family, per year.
Congress also made it possible for someone who opens a Health Savings Account in mid-year to contribute the maximum amount allowed by law to their HSA without penalty. Additionally, the new law allows a one time transfer from your IRA to your HSA as long as it does not exceed the annual contribution limit. Can Congress do more? Yes, it can help advance tax parity for the self-employed by allowing them to exclude health insurance premiums from self-employment tax. Thankfully, this idea has solid bipartisan support and federal legislation has been proposed.
As more people open self-employed businesses, the demand for Health Savings Accounts is going to grow. In 2005, almost one-third of the nation's 13.1 million self-employed people had no insurance at all.
In the meantime, those with Health Savings Accounts have not only been covered but have been saving money for future medical needs. According to Golden Rule Insurance Co., as of the middle of last year. their HSA customers had saved $165 million in their accounts, and that's just since early 2004. In total, HSA policyholders nationwide have accumulated over $5 billion in the accounts at the close of 2006.
Every single dime in these accounts is protected from the tax collector, which allows a small business or a self-employed business to focus on growth and success instead of worrying about rising health care costs.
Visit http://www.health--savings--accounts.com for more information on how a Health Savings Account can work for you.
Posted by Wiley Long at 11:23 AM | Comments (0)
April 24, 2007
New United Healthcare HSA Website
United Healthcare/Golden Rule insurance company has launched a new website which offers consumers a convenient, one-stop location to find comprehensive, straightforward information on Health Savings Accounts (HSAs) and how they work.
Among its features are an extensive question-and-answer section and five key questions that help individuals determine if a Health Savings Account is the right choice for them and their families.
Launched by United Healthcare's Golden Rule Insurance Company, an Health Savings Account pioneer and leader in the individual and family health insurance market, www.HSAcenter.com provides consumer-friendly information presented in multiple formats including text, video, flash and audio. Additional and updated content, including an HSA calculator, will be added on a regular basis.
America’s Health Insurance Plans recently reported that 4.5 million Americans are now covered by a Health Savings Account; Consumer Driven Market Report puts that number at 6 million. Moreover, the U.S. Department of Treasury estimates that the number will expand to 25-30 million consumers by 2010.
“These numbers will continue to grow as more Americans come to understand the affordability, tax savings and control over health care spending that HSA plans offer. In fact, one-third of customers purchasing HSA plans from Golden Rule last year were previously uninsured. We developed HSAcenter.com as a valuable tool for consumers looking for affordable health insurance, tax savings and a way to save for retirement health care needs,” Golden Rule CEO Richard A. Collins said.
Golden Rule’s experience and expertise in the consumer-driven health care market goes back more than a decade to when it introduced the first medical savings account (MSA) in the early 1990s. Today, 40 percent of Golden Rule customers are covered by HSA plans, and these customers have accumulated more than $165 million in their savings accounts for current and future health care spending, including retirement.
A leader in the individual and family insurance market for 60 years, Golden Rule became a United Healthcare company in 2003. United Healthcare’s individual line of business, which includes Golden Rule, PacifiCare, American Medical Security (AMS), MAMSI and United Healthcare underwritten by Golden Rule, offers PPO health insurance and HMO products to individuals and families in 37 states and the District of Columbia.
Posted by Wiley Long at 01:31 PM | Comments (0)
April 22, 2007
Wal-Mart Catering to Health Savings Account Owners
Wal-Mart Stores Inc. is forecasting more than 6,600 in-store medical clinics will open their doors in the next five years in retailers nationwide. With the additional clinics, Health Savings Account owners will have an opportunity to save even more money.
"I think it's an indication of how bullish on these clinics individuals are," Alicia Ledlie, senior director for Wal-Mart's health business development, said at a health care retailers convention in Orlando.
With 75 clinics in Wal-Mart stores in 12 states, the company has ended its pilot program and plans a faster roll-out of additional clinics nationwide.
Ledlie said Wal-Mart is considering providing its in-store clinics with a common electronic medical records system so patient care can be tracked from store to store.
"My vision is the different clinic operators could all be on a common platform," she said. "We are looking at it actively now."
Wal-Mart's move into retail health care also includes a program of providing certain generic drugs for $4 for a 30-day supply. In the program's first three months Wal-Mart said consumers and the government saved more than $200 million on prescriptions.
These additional clinics will be a great help to individuals and families who own a Health Savings Account. To learn more about Health Savings Accounts and what they can do for you, visit: http://www.Health--Savings--Accounts.com
Posted by Wiley Long at 08:43 PM | Comments (1)
April 20, 2007
Pre-Tax Health Savings Account Contributions
Federal employees enrolled in high-deductible health plans will be able to use pre-tax dollars to schedule automatic contributions to their Health Savings Accounts by the beginning of 2008.
Currently, employees with HSA plans make contributions on their own with after-tax earnings and then declare the contributions on their annual tax returns to get the tax benefit. The new service will allow employees to schedule the payments so they're automatically drafted from their paychecks before taxes are taken out.
Payroll providers will roll out the pre-tax service gradually through Jan. 1.
After their covered payroll provider switches to the new system, employees will be able to make pre-tax contributions using the same method they would use to establish other allotments, such as through the payroll Web sites Employee Express or MyPay. Employees will be able to modify their allotments at any time.
For 2007, employees can set aside $2,850 in a Health Savings Account for single coverage or $5,650 for family coverage, while those who are 55 or older can make an additional catch-up contribution of $800. The maximum contribution includes the premiums contributed to the Health Savings Account by each health plan.
Learn more about Health Savings Accounts at: http://www.health--savings--accounts.com
Posted by Wiley Long at 11:05 AM | Comments (0)
April 18, 2007
Humana CEO promotes Health Savings Accounts
Humana President and CEO Michael McCallister visited South Florida to promote Health Savings Accounts that he says are the future of health care.
McCallister met with local hospital executives at the Westin Fort Lauderdale and encouraged them to be more transparent with the medical pricing and quality data that he's seeking to provide to members.
His goal is to design a website where members can enter the procedure they're going to have and receive a spreadsheet comparing hospitals on mortality rate, infection rate and price for that procedure.
With HSA enrollees in charge of spending money in their accounts or their own dollars, such information is needed so they can make cost-effective choices.
"There's a big opportunity for us to integrate all of this information," he said. "We're still pretty far from that today."
Humana has some price and quality information on South Florida hospitals available to its members, but there are more components that need to be added, according to McCallister.
In instances where companies were using consumer driven plans like Health Savings Accounts, the emergency room visits were down, while visits to doctors and orders of prescription drugs were up, McCallister said. That has held the claim increases at these companies to the single digits. One reason for that is members in these plans are more likely to pursue lower cost medications, he said.
"There's no question we find engagement and information drives consumer behavior," McCallister said.
But many local hospital executives are concerned that the data being provided to consumers is out of date or not relevant, according to Linda Quick, president of the South Florida Hospital and Healthcare Association. They're also troubled that Humana's website doesn't include data from outpatient surgery centers, which often price procedures below hospitals, she said.
Membership in HSA plans is growing in South Florida is growing, but not as fast as expected compared to the national rate, said Colin D'Arcy, president of Humana's South Florida operations, which covers about 160,000 people.
"HMOs are so embedded in our society that to get people away from them is like pulling teeth," D'Arcy said.
Learn more about how a Health Savings Account can help you with your health insurance at: http://www.health--savings--accounts.com
Posted by Wiley Long at 01:41 PM | Comments (0)
April 16, 2007
Health Savings Accounts are a Perfect Fit for the Self-Employed
While Americans and the medical community have been a little slow to take up the idea of a Health Savings Account, or HSA, as a way to control medical costs, flexibility and tax-friendly changes to how HSAs work are getting people's attention.
There are about 10 million people enrolled in "consumer-driven health plans," and about 6 million of those are Health Savings Accounts. The U.S. Treasury Department estimates that 25 million to 30 million people will be enrolled in an HSA by 2010. And while many americans are enrolled in an HSA, self-employed individuals are finding them a perfect fit.
Music-store owner Scott Hillje was concerned for his 11-year-old son last year when he fell at the school playground and was taken by ambulance to the hospital. Unlike many self-employed people, Hillje wasn't worrying about how he was going to pay the medical bills.
Every month, $500 is automatically deducted from Hillje's account to go to HSA Bank. From that account, he pays for qualified medical expenses, while the remainder awaits spending on future medical needs and grows from year to year if there is anything left at the end of the year.
Laws passed late last year allow an individual to contribute up to $2,850 a year to an HSA and to allow a family to contribute up to $5,650
Although that's up only slightly from last year's allowance of $2,700 per individual and $5,450 per family, it comes with the advantage of being fully tax-deductible. In previous years, only the amount of the health plan deductible could be written off.
Deposits can be spread out throughout the year, but taxpayers also can take advantage of fully funding an HSA before April 17 for a break on their 2006 taxes.
"I think Health Savings Accounts are the greatest thing since sliced bread," said insurance broker Kevin Cooley of San Antonio's Integrated Health Plans. "Most clients who are open to the HSA idea are self-employed, and they have a different view on money."
That view is one of watching every dollar and weighing options more carefully than workers with company-provided health benefits, low co-payments and a low deductible.
HSAs mean more out-of-pocket expenses than traditional insurance because of the high deductible; but for those without coverage, putting any amount toward tax-free health savings "is still better than no coverage," Cooley said.
A family health plan in San Antonio with a $1,500 deductible and 20 percent co-payments to health providers would cost $1,020.69 a month, under one illustration Cooley provided. That can be a tough nut to crack every month for most families.
But with a Health Savings Account and a higher deductible of $5,650, the same family would pay $322 a month in premiums and any money not spent out of the HSA would roll over into the next year.
Managing those savings also is becoming more sophisticated.
United Healthcare's Golden Rule Insurance Co., one of the pioneers in the HSA field, recently launched mutual fund investment options that provide higher returns on health savings that go unused. After the savings account balance reaches $2,000, excess amounts can be invested into one or more of eight no-load mutual funds.
Golden Rule spokeswoman Ellen Laden said another advantage to the new HSA rules includes a one-time transfer from an IRA to help fund an HSA. This is especially useful for early retirees who are no longer covered by employer-based plans and aren't old enough to qualify for Medicare.
The law also allows money to be moved from a flexible spending account — the use-it-or-lose-it part of many employer-based plans — to an HSA.
Laden said about one-third of people signing up for Health Savings Accounts with high-deductible plans were previously uninsured.
In Texas, Golden Rule found that most of their HSA clients were self-employed or a husband-and-wife business, followed by part-time workers and farmers and ranchers.
Long-term-care insurance premiums also can be paid out of HSA accounts beginning this year.
"There are young families that are concerned about the braces and the eyeglasses with the HSA," Laden said. "But there are older people who are worried about who is going to take care of them."
The growing use of the accounts is prompting new forms of banking to deal with unexpected expenses.
For example, if a person has made one contribution to the savings account at the beginning of the year, but gets hit with a big deductible right away, it can create problems, said Bart Halling, vice president for consumer-driven health products at Fiserv.
That could create a market for specialty lending against future HSA contributions, he said.
"My call to action on the consumers' side is to have a little bit longer horizon on planning for health care expenses," Halling said. With traditional health plans, "people are used to planning in nice one-year blocks." With HSAs, they need to plan for larger expenses before a health event, he said.
Hillje said the health savings account has made him think differently about medical expenses.
"The HSA has just made it more workable for a self-employed person," Hillje said. And because the first few thousand dollars of medical expenses each year will come out of his pocket, he says the family is more cautious about how they use the health care system.
The family still goes for regular doctor visits at provider network discounts to stretch their dollars further, and preventive medicine remains the way to control costs down the line.
"We don't just run to the doctor every time somebody has a cold," Hillje said. "It makes you really think, 'Do we need to go?'"
Learn more about Health Savings Accounts at http://www.health--savings--accounts.com
Posted by Wiley Long at 08:56 AM | Comments (2)
April 13, 2007
Enrollment Up in Health Savings Account Plans
A new census released by America's Health Insurance Plans (AHIP) found 4.5 million Americans are now covered by lower-premium, high-deductible health insurance plans that are offered in conjunction with Health Savings Accounts (HSAs), a 43 percent increase since last year.
The census found that more than one-fourth of those purchasing HSA plans in the individual market were previously uninsured and that almost half of those enrolled in such plans were over the age of 40.
The census also reveals that HSA plans provide value-added services. Most companies offer HSA plans that cover preventive care before the deductible is met, provide disease management programs for chronic conditions, and include a wide array of Web-based tools to help consumers make more informed decisions.
This is the first AHIP census that compiled information about Health Savings Accounts that work in conjunction with HSA plans. Eighty-eight percent of accounts in place in 2006 had average annual balances of $2,500 or less, while 4 percent had average annual balances over $5,000. As of January 2007, 65 percent of accounts had been in place for less than one year.
"Consumers and employers want coverage choices," said Karen Ignagni, President and CEO of AHIP. "Our members have worked effectively to create HSA products that are built on the widespread availability of first-dollar preventive coverage, disease management services and online decision-support tools."
Other key findings from the census include:
-- An increase of 1.3 million Americans enrolled in an HSA plan. Previous censuses found 3.2 million enrolled in January 2006 and 1.0 million enrolled in March 2005.
-- Slightly over 1 million were enrolled in the small-group market and 2 million in the large-group market.
-- HSA plans accounted for 25 percent of new products in the individual market, 17 percent of new policies in the small-group market, and 8 percent of new policies in the large-group market.
-- Most companies (over 90 percent) offered HSA plan options with preventive benefits that are covered before the deductible is satisfied.
-- Most companies offer disease management services for patients with asthma (82 percent), chronic obstructive pulmonary disease (65 percent), congestive heart failure (84 percent), coronary artery disease (84 percent), and diabetes (91 percent).
-- Most enrollees have access to consumer information tools such as online access to account information (90 percent), online health education tools (95 percent), hospital-specific quality information (85 percent), physician-specific quality information (50 percent), health care cost information (88 percent), and Personal Health Records (70 percent).
Posted by Wiley Long at 11:03 AM | Comments (0)
April 11, 2007
Despite Congressional Doubts, Health Savings Accounts Will Continue to Grow
Amid growing Congressional pressure to make some changes in Health Savings Account regulations, a new forecast on their expanding usage and popularity may give some political leaders pause.
Information Strategies, Inc. (ISI) has issued a new estimate on year-end and future growth based on interviews with Health Savings Account, Consumer Driven Healthcare and more traditional plan users as well as corporate and custodial managers.
"Many people are just now learning about the Health Savings Account changes effected in the closing days of the last congress and they are taking advantage of the new higher savings limits and the greater flexibility in rules," said JoAnn M. Laing, ISI's President & CEO.
ISI expects these changes, which some in Congress indicate they would like modified, to drive the popularity of Health Savings Accounts even higher.
Speaking at a Washington, DC meeting of industry leaders, Laing provided the following estimates of sector metrics at the end of 2007:
-- The number of Health Savings Accounts will reach 8 million.
-- Deposits in custodial accounts will total $13.6 billion at year-end.
-- Average accounts will pass $1,700 mark, with those accounts being in existence two or more years hovering at $4,400.
-- 22% of employers will offer HSAs.
-- More than 40% of all companies will fund 50% or more of the first year's deductible.
-- New HSA-covered lives will exceed eight million, bringing the HSA-insured total to 18 million.
-- Number of institutions offering HSA custodial accounts will pass 1,600.
-- Investment options for custodial accounts will become more numerous and diverse with major giants such as Fidelity taking a leading role.
-- Online portals and other integrated offerings will surge in the fourth quarter.
Laing said her company this year had surveyed more than 400 custodial institutions, 2,300 companies as well as 2,000 Americans about their HSA plans. In the past 30 months, the company has interviewed or survey almost 20,000 Americans.
"What we are seeing is a growing desire by respondents to take more control of their healthcare and retirement efforts," she added.
"Clearly HSAs, along with Health Reimbursement Accounts (HRAs) and Flexible Spending Accounts (FSAs) are gaining popularity both with individuals and employers of all sizes," Laing said.
"HSAs are popular with individuals and smaller company managers as a healthcare insurance alternative and even the larger firms such as Deere are jumping in with plans that require more effort on the part of employees but give them some part of their insurance premiums back in the form of savings," Laing said.
Posted by Wiley Long at 11:03 AM | Comments (0)
April 09, 2007
Health Savings Accounts and HRA Plans for Small Business Owners
With group health insurance rates continuing to rise, more small business owners are turning to Health Savings Accounts combined with a Health Reimbursement Arrangement (HRA) as a way to help their employees obtain health insurance. With this type of arrangement, the business reimburses employees for the cost of their individual health insurance plans, instead of offering a group plan. Employees end up with less expensive, permanent coverage that they can take with them if they ever leave the business thanks to their Health Savings Account plan.
What Is an HRA?
A Health Reimbursement Arrangement (HRA) is simply an arrangement where an employer reimburses employees tax-free for qualified medical expenses, including health insurance premiums. HRAs are also known as Section 105 plans, named after the section in the U.S. Tax Code that governs them.
Group health insurance is “guaranteed issue,” meaning that the insurance companies must accept any applicant, regardless of pre-existing health conditions. As a result, group insurance premiums are about twice as expensive as individual plans, and approximately 40% of small business owners can no longer afford to offer health insurance to their employees.
Companies cannot purchase individual health insurance for their employees, but if they have an HRA set up they can reimburse them for their medical expenses, including the cost of health insurance. The reimbursement is considered a tax-free fringe benefit to the employee, so it is a much better value than simply receiving a pay increase.
Because some companies are now offering online HRA plan set up, they are also now extremely easy to set up and to manage. The employer simply provides a fixed monthly tax-free contribution to an HRA for each participant. The HRA then enables employees to obtain reimbursement for qualifying medical expenses, including health insurance premiums.
Your employees can then select an affordable plan customized to their own needs and budget. One great advantage to the employee is that the coverage is totally portable – if they ever leave their employer they can take the coverage with them. They do not have to worry about COBRA, or about being tied down to their job just because they need the health insurance.
These plans are primarily being adopted by small companies with employees who are all in good health. Because insurance companies are allowed to “underwrite” individual health insurance applications, someone with some pre-existing health problems could be denied coverage.
The average group health insurance premium for a family is nearly $14,000 per year. However, the average premium of an individually underwritten plan can be less than $300 per month. So it is not surprising that as more small business owners learn how they can use an HRA to reimburse individually underwritten health insurance plans, their popularity continues to soar.
Learn more about Health Reimbursement Arrangements and Health Savings Accounts at: http://www.Health--Savings--Accounts.com
Posted by Wiley Long at 09:35 AM | Comments (6)
April 03, 2007
Be Wary of Universal Health Care
Many policy makers believe that a universal health care system will bring better care to millions of Americans, but they're wrong, says Gerald A. Anzalone in the Journal News (New York). What is really needed is more competition and wider use of Health Savings Accounts.
Looking abroad can show the down side characteristics of universal health-care systems:
- Ireland boasts the richest economy in Western Europe, but in a country of about 4 million people, there are 17 neurologists and it takes up to a year to get an appointment to see one for the initial visit.
- It takes about four months to get an MRI scan, about 14 weeks for diagnostic ultrasound and surgical cases are put on waiting lists.
- Canadians pay roughly a 50 percent income tax to help support their national health-care system.
- In Ontario, most Canadians who can afford it purchase private extended health coverage rather than relying upon the government-sponsored programs to avoid similar problems.
Further, government-sponsored health-care programs in our own country have serious problems, says Anzalone:
- Medicare Part D prescription drug coverage created more confusion that even Medicare representatives could answer.
- Over-utilization of Medicaid programs break the backs of state budgets.
- Recent news reports about the horrific conditions and abysmal patient care at Walter Reed Army Medical Center, our nation's flagship of government-managed health care, hardly inspire confidence in a government-run medical system.
Instead of trying to replace one bad system with another, the government should:
- Encourage even more competition among private insurers so that doctors and providers receive fair reimbursements for good medical care.
- Provide direct subsidies for people who purchase health insurance that they can afford and that is portable from job to job.
- Encourage the use of tax-sheltered Health Savings Accounts for those want to control where and how their health-care dollars are spent.
Posted by Wiley Long at 09:30 AM | Comments (2)
April 01, 2007
Using Your Health Savings Account to Buffer the Coming Medicare Insolvency
The Medicare Trust Fund will soon be out of money, and there will be no practical way for the government to continue to provide the level of benefits that current Medicare recipients receive. The result will be serious rations, waiting periods, and a reduction in benefits. If you wish to maintain your medical freedom, and have access to a high level of medical service, you must be prepared to pay for it yourself. The best strategy is to take good care of your health, and to build up your medical retirement fund as large as possible by using a Health Savings Account.
The Coming Medicare Insolvency
The total federal debt is now over $10 trillion. But if you also include the current unfunded liabilities of social security, Medicare, and other programs, the total federal debt is at least $54 trillion. This number has been confirmed in three separate studies - by the American Enterprise Institute, the National Center for Policy Analysis, and the Brookings Institution.
It is difficult to get a grasp of a number that big. That's $180,000 per person currently living in the United States. It is four times the U.S. Gross Domestic Product, the measure of the final value of all goods and services produced in this country in the course of a year.
As the program is currently structured it is unsustainable, and the fund is expected to be depleted by 2018. That is a mere 11 years from now. The shortfall in Social Security and Medicare revenues will continue to increase as the years go by - it will exceed $2 trillion by 2030. At that point, half of all tax dollars will have to go to Social Security and Medicare.
That clearly can't happen. Instead, the system will face massive cuts in benefits, probably in addition to large tax increases.
Who Will Pay Your Medical Expenses During Retirement?
So will Medicare be there for you? It depends on how old you are. Unless you are retiring in the next couple years, I certainly wouldn't count on it, particularly if you want to insure that you have access to high quality medical care during your retirement years.
Last year Fidelity Investments reported that the average couple retiring in 2006 would need $200,000 just to cover medical expenses during retirement. That estimate did not include the cost of over-the-counter medications, most dental services and, long-term care, if needed. And it did not include the charges that are currently paid by Medicare.
If we cannot depend on Medicare to be there for us, the only smart solution is to save as much money as possible. This will ensure that you can obtain the quality care you need. If you are not currently putting as much money as possible aside to pay for these expenses yourself, you are making a serious mistake.
What Is Your Solution?
As most readers already know, the very best tool for accumulating funds for future medical expenses is a Health Savings Account. An HSA is the only investment that provides a tax deduction when you deposit the money, yet never taxes the money if it is used to pay for qualified medical expenses.
Therefore, you should put as much money as possible into your HSA, and withdraw as little as possible. The contribution limit for 2007 is $2,850 for an individual, and $5,650 for families. Those over 55 can also contribute an $800 catch-up contribution. Making the maximum contribution each year will help you build a medical retirement fund that can be used to pay future medical expenses, tax-free.
Rather than withdrawing money from your account to pay for medical expenses as they occur, you should pay for medical expenses that are not covered by your health insurance, out of your own pocket. Save your receipts (for doctor visits, eye glasses, aspirin, etc), and leave your money in the account to grow tax-deferred. There is no time limit before you have to reimburse yourself, so you can make the most of this tax-free investment.
As soon as possible, you may also want to transfer some of the money into mutual funds. While some HSA administrators are paying interest rates as high as 5%, the only way you are going to really grow the account is to get a much higher return on your money. Many HSA administrators offer a discount brokerage option, so you can place your funds in virtually any stock or mutual fund.
For a family that contributes the maximum contribution each year, it is quite reasonable to assume an HSA account value well over $1 million after 25 or 30 years. Medicare may be broke, but at least you won't be.
"Medicare HSAs?"
The solution to the pending Medicare meltdown is very complicated, but it is clear that government-run medical programs don't work. The dismal results can be seen everywhere, from the former Soviet-bloc countries, to the broken down national healthcare systems of Canada and Europe. Medicare must be transformed into a program where seniors have an ownership interest in the money they are spending.
Replacing the government's obligation to provide benefits with a voucher that seniors could use to purchase health insurance from competing private insurers, and/or deposit into a "Medicare Health Savings Account," would bring market efficiencies and competition into the picture. This idea is endorsed by both the American Medical Association and the American Hospital Association.
Retirement HSAs may or may not ever come to fruition. But fortunately, HSA plans are available to those under age 65. If you do not yet have an HSA, get signed up for one now. You will lower your health insurance premiums, and can begin putting money aside for medical expenses you will almost inevitably incur during your older years.
Visit http://www.health--savings--accounts.com for more information.
Posted by Wiley Long at 03:45 PM | Comments (0)