Complementary
Therapies Now Tax Deductible
Health
Savings Accounts allow you to set up a tax-deductible account
to pay for medical expenses that are not covered by your
health insurance. These include expenses to cover
your deductible, and other medical expenses like dental
and eyeglasses. But many don't realize that HSA funds
can be used to pay for virtually any type of medical service,
as long as it pertains to the treatment or prevention of
a specific health condition.
Because
money withdrawn from a health savings account to pay medical
expenses is tax-free, anyone who has an HSA can funnel all
alternative medical expenses through their HSA and get a
tax write-off. This could include biofeedback, naturopathy,
Ayurvedic medicine, aromatherapy, magnetic healing, reflexology,
and the list goes on.
People
who use complementary therapies are often very health conscious,
and go to traditional physicians less often. So it
does not make sense for them to be paying a high premium
for a traditional health insurance plan with a co-pay, particularly
when their medical treatments are not covered anyway.
Instead, many are choosing a low cost high-deductible HSA
plan.
Alternative
Therapies Becoming Mainstream
My wife
Christie will be graduating from Veterinarian school this
spring. Formerly a software salesperson, the idea
to change careers occurred to her while we were traveling
in the year 2000. We had both quit our jobs and were
circling the globe for 13 months. In India one Sunday
afternoon over some beers, the topic came up "What
would you do if you could start all over again?"
By the time we were in Nepal two months later, she had made
up her mind on a new career.
The
Longs
Her
veterinary studies have of course focused on the treatment
of animals from a Western perspective. But next month
she's going to be taking a class on acupuncture, a mysterious
procedure that is said to work by affecting the flow of
"Qi" energy throughout the body. There is
clinical evidence that proves it works, but no one has been
able to actually capture and measure Qi in a scientific
way.
Many
hospitals are now offering complementary treatments as well.
The website for the Memorial Sloan-Keating Cancer Center
states that complementary therapies are used to "help
alleviate stress, reduce pain and anxiety, manage symptoms,
and promote a feeling of well-being."
Some
group health insurance plans are beginning to cover more
complementary expenses, but there is still very little coverage
for these expenses in individual or family plans.
Those that cover chiropractic limit coverage to 12 - 20
visits per year, and a few will cover a limited amount of
acupuncture. But I know of none that cover hypnotherapy,
Reiki, iridology, or faith healers.
Why
Complementary Medicine
The
conventional medicine practiced by most MDs is called allopathic
medicine. The philosophy of this system is to treat
disease and injury using counteractive methods. For
instance, if you have a fever you may take aspirin to make
it go down, if your cholesterol is elevated you may take
a statin to reduce it, if you have heartburn you may take
an antacid. The thinking is mostly focused on removing
the symptoms of disease, and the primary treatment modalities
are surgery and prescription drugs.
But
there are other ways to look at things. Naturopathic medicine
is based on the belief in the body's own healing powers,
which can be strengthened through the use of certain foods,
vitamins, herbs, or other "natural" treatments.
Traditional Chinese Medicine (TCM) is based on ancient Chinese
theories about the balance of yin and yang. Ayurvedic
medicine is based on principles of movement, metabolism,
and structure.
Part
of the growing use of complementary therapies is a reaction
to the costs, side effects, and philosophy of conventional
allopathic medicine. Physicians get much of their
continuing education from the pharmaceutical industry, and
they work in an environment where the insurers and the patients
are both looking for a quick fix. The result is that
the average 60 year old is now taking 5 regular medications,
yet there is little expectation that those drugs will ever
cure the health problems for which they're being used.
Many consumers see this, and instead are using other methods
to try to get to the root of their illness.
What
is Considered a "Qualified Expense"
Qualified
medical expenses have been partially defined in IRS Publication
502, and through various federal court rulings. There
is no definitive list, but there are really very few restrictions
as long as the procedure is for the treatment or prevention
of a specific health condition. For instance, you
could not use your HSA funds to pay for a relaxing massage
for your own personal pleasure. But if your doctor
recommends you get a massage for specific medical reasons,
this is considered a qualified expense. Yoga would
not normally be considered a qualified medical expense,
but it would be if it was recommended as a physical therapy
following some sort of accident.
Some
may question why the government would give a tax deduction
for someone to use some crazy energy vibration machine to
cure their cancer. But this is as it should be.
No one but you should be able to decide what type of treatment
you will use for your own illnesses. By empowering
individuals to manage their health as they see fit, HSAs
encourage personal responsibility and help loosen the monopoly
on healthcare that conventional medicine has had for the
past few decades.
If you
do not yet have an HSA, there is still time to get a qualified
health insurance plan in place before January 1. This
will enable you to maximize your 2007 tax benefits, and
in most cases lock in 2006 rates for 6 - 24 months. But
you should act now, because 2006 will soon be history.
