Many of my posts in the past have revolved around health savings accounts (HSAs) combined with high-deductible health plans (HDHPs). That’s because I know HSA-qualified HDHPs are a great option for many Americans looking to take control of their health insurance costs.
Many people have never heard of an HSA-qualified health plan, and still others possess misinformation about them; unfortunately many folks are therefore reluctant to entertain the idea of replacing their more-traditional insurance plan with an HSA-qualified one.
Why Use an HSA?
There are many great reasons to use an HDHP combined with an HSA for your health insurance. In my opinion, one of the best reasons is that it gives you the freedom to choose how you spend your health care dollars. You aren’t restricted to certain networks, and you have the ability to choose alternative types of medicine that traditional insurance does not typically pay for.
Additionally, there are considerable tax benefits to choosing an HSA-qualified health plan. Not only are the funds you deposit tax-free, but the entire amount of your contribution lowers your modified adjusted gross income (MAGI) by that amount. This results in a smaller tax bill (or with any luck, a larger refund!).
Debunking the Myths About HSAs
With an HSA plan being such a great option, I am really surprised more people do not use them. However, they are growing in popularity by leaps and bounds. In fact, when HSAs were first created, only a few people had heard of them, much less used them. Now it’s 10 years later, and there are an estimated 9 million people utilizing an HSA combined with an HDHP. These numbers are only expected to increase as more people discover the numerous benefits to this type of plan.
The media and some pro-ACA factions would have you believe that an HSA plan is not compatible with the Affordable Care Act. They would also like you to believe that the only option you have for health care is to choose an insurance plan offered on the federal health exchange or your state exchange. This is patently untrue, as there are many plans offered both on and off the health exchanges that are HSA-compatible.
Spreading the News About a Good Thing
Because I feel so strongly about high-deductible health plans and HSAs, I have written many, many articles about the subject. I recently published an article in “Health Insurance Underwriter,” which is a digital magazine used by thousands of health insurance professionals as a tool to help their clients. In it, I specifically talk about the various myths people have heard about HSA plans, and counter the myths with the facts.
When I tell my clients that an HSA plan can often be a great choice when choosing an insurance policy, I do not expect them to blindly go that route without investigating for themselves. I fully expect that they will research the available plans thoroughly before making any type of decision. I recommend starting with my article entitled “Debunking the Myths of How HSAs Work Under PPACA.”
The fact that I have used an HSA for years shows just how well it fits the needs of my family. Although I have had some medical expenses, I have not yet had to use my HSA funds to reimburse myself for those costs.
Therefore, I have built up a considerable amount of money. If my wife, my son or I ever become seriously ill, I have the money available to pay the medical expenses. If I never have to use the funds, I am still benefitting from the tax benefits and am saving for my retirement.
Once you have learned more about HSA plans and have a better idea of how they can benefit you, contact one of the Personal Advisors here at HSA for America. We can offer you guidance about the best HSA and HDHP for your situation, and can help you make a wise health care decision.
Remember that I am committed to helping you have more control of where your health care dollars are spent. To this end, the services of our Personal Advisors are free—we’re just happy to help save you money on your health insurance!
Wiley Long is President of HSA for America, and a passionate advocate for consumer-based solutions that will improve price transparency and lower health insurance and medical costs for people purchasing individual and family health insurance plans.