Fort
Collins, CO (PRWEB) September 27, 2006 -- Wal-Mart’s announcement last
week that they will be offering 291 generic prescription drugs for just $4
a month has already resulted in an increased interest in HSA-compatible
health insurance plans according to industry leader HSA
for America.
“I
think people realize that if they can buy their prescriptions drugs that inexpensively,
it doesn’t make sense to pay a lot of money for a health insurance plan
that offers $15 copays for generic drugs,” says Wiley Long, president
of HSA for America.
Health
savings accounts, or HSAs, are tax-favored accounts that can be used to
save tax-free for future medical expenses. They are available to anyone
who has an HSA-qualified
high deductible health plan. These plans have deductibles starting
at $1,050 for individuals and $2,100 for families, and do not cover prescriptions
until the deductible is met.
“The
higher deductible can take a little getting used to for people who are accustomed
to low co-pays for prescription drugs and doctor visits. But when you
consider that premiums are 30 – 40% less than traditional co-pay plans,
it really makes a lot of sense," he said.
Long
says another appeal to HSAs is the fact that if the money in the account is
not used to pay for HSA
qualified expenses, it grows tax-free like an IRA. “Some people
are calling these plans ‘medical retirement accounts’, because
they are a great way to save for medical expenses we will all face in old
age. Not only is the money deposited in the account tax-deductible,
but any money taken out to pay for medical expenses can be withdrawn tax-free.”
Currently
there are nearly 3 million HSAs, and nearly $5 billion deposited in these
accounts. Over 50,000 new accounts are being opened each month, and
some experts predict that by 2010 there will be as many as 25 million HSAs
covering over 70 million people.
Long
estimates that interest has surged 20% since Wal-Mart’s announcement
of lower drug prices.
