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September 01, 2009
How a Health Savings Account Will Save You Money
Healthcare costs rise every year for all Americans - employer, employee, self-employed, and their families. The US government is working on this, but their track record on reform is not so good (or fast). Meanwhile, Americans pay more and more for basic health care, at a time when many mortgages are going up and many people are unemployed or underemployed.
One solution that has worked for more and more families each year is the Health Savings Account. 10 reasons to consider a Health Savings Account:
1) Health Savings Account premiums are vastly cheaper than other healthcare plans.
You are immediately saving money. The renewal costs are also much cheaper than an HMO, PPO or other plans.
2) Health Savings Accounts will cover peripheral medical costs.
With many HMOs or PPOs, dental care, eye glasses, and eye surgery are not covered. Health Savings Accounts can be used for this, and also acupuncture, psychiatric treatment,fertility treatment and more. See IRS Publication 502.
3) You control your medical care with a Health Savings Account.
There is no network. No one will force you to choose from a list of doctors or hospitals. With a Health Savings Account, you play an active role in every healthcare decision. Even the best doctor may benefit from having to explain his or her recommendations when you ask the right questions about your healthcare.
4) Health Savings Accounts are tax-deductible.
All the money you deposit into your Health Savings Account is tax-deferred. Even if you spend it all on approved medical expenses, the money is still deductible.
5) Money saved in a Health Savings Account never expires.
Unlike a flexible spending account, the money in your Health Savings Account can grow for years until you need it.
6) Health Savings Accounts can be filled from an IRA.
You can pay for your health care from your retirement account - one time. If you're short on cash, you can take a bit from your retirement and transfer to your Health Savings Account without a penalty.
7) With a self-directed Health Savings Account, your health care dollars can be an investment.
Your Health Savings Account money can join with your self-directed retirement funds and invest in real estate, gold, stock, or a loan.
8) Health Savings Account investment earnings are tax-deferred.
If you make a good investment and earn thousands, that money will stay in your Health Savings Account until you need it, tax-deferred.
9) Health Savings Account money earns interest when you're not using it.
If you can't find a good investment, or between investments, the money in your Health Savings Account earns tax-deferred interest.
10) Contrary to common sense and popular belief, health care costs are not tax deductible for most Americans.
Healthcare costs must be 7.5% of your income to be tax deductible. Most Americans do not qualify for this, even in a bad health year.
Learn more about Health Savings Accounts and how to get the best HSA Plan for your needs at HSA for America.
Posted by Wiley Long at September 1, 2009 05:23 PM