HSA for America

Year-End Thoughts
and Strategies


December 1, 2010
Vol. 6, Issue 12


The end of the year is a great time to assess where we've been, and where we're going. This is true for us individually, and perhaps more so than in most years it is also true for us as a nation. Here are a couple of my suggestions at the national, and individual level.

Health Care Changes

With a new congress and Constitutional challenges to the new health care law, it is really impossible to predict how things will play out. But we do have an opportunity to make some big improvements, and I hope both political parties will work together to do so.

The best aspects of the new law are its attempts to provide greater access to insurance coverage, particularly for dependent children and other people with pre-existing conditions. Unfortunately, there is nothing in the law that addresses rising costs, and in fact there are many aspects of the legislation that will simply accelerate premium inflation.

While many changes are needed, one of the best things that lawmakers can do is to expand the use and scope of Health Savings Accounts. HSAs encourage people to save for future medical expenses, and they encourage people to shop more carefully for health care services because they are spending their own money.

These are both great things, for the individual and society. And most people really like the concept. The past year has seen the biggest jump yet in number of people choosing HSA-qualified plans, and the trend doesn't seem to be slowing down.

But the limits on HSA contributions are much too restrictive. The average retiring couple will require over $350,000 to pay medical bills that are not covered by Medicare, and some will need a lot more than that. (Within 10 years the typical retiree will be spending $200,000+ on prescription drugs, alone!)

I believe that people should be allowed and encouraged to choose even higher deductibles, and contribute even more each year to their HSA. Higher contribution limits would make it possible for more people to have money put aside to pay for their medical expenses during retirement, without having to depend on others to pay for their care.

And higher deductibles can allow those who have saved money in their HSA to lower their monthly premiums. I'd like to see the contribution limit raised to at least $20,000, and I don't really see any reason not to allow deductibles as high as $50,000.

Stock Up on Over-The-Counter Meds

If you have an HSA-qualified health insurance plan, you only have until December 31st to pay for over-the-counter medications from your HSA. So you may want to stock up now, so you can pay for it with pre-tax dollars.

This will only be considered valid if the physician has prescription-writing privileges in the state where he is operating; i.e. chiropractors and naturopaths will not be able to do this for you in most states. Thus any herbal or nutritional supplements you use will also fall under this new provision.

Take Care of Your Finances

If you break it down, most people have pretty similar financial goals. When spending money, they want to get the best return possible on the dollar spent. When making money, they want to make the most possible, and pay the least taxes possible. And as for the money they have, they don't want to lose it unexpectedly and they want some of it to last at least as long as they do.

So please, take a moment and do a quick mental check to make sure you are not neglecting any financial areas of your life. Make sure you are up to date with your retirement planning; make sure you have disability coverage in place; if you are over 50, be sure you also have long-term care coverage; see if you are on track with any saving for your children's education; and be sure there is adequate life insurance if you have anyone depending on you.

It's hard for me to believe that in just 11 years I will be paying college tuition. My son is very bright, so I'm of course hoping for a full scholarship somewhere. He's very entrepreneurial minded as well, so maybe he'll make his fortune while still in high school and pay his own way. Or maybe not...

Wiley IV, Freshman Class of 2021

If we can help you with any of this, let me know. A good place to start is with your life insurance coverage - if you'd like to learn the basics, and how to protect your family, join us on this month's webinar that we'll be presenting on Thursday, December 16th.

To your health and wealth!

Wiley Long
President - HSA for America

P.S. - After a lot of technical challenges, we finally once again have instant term life insurance quotes on our website, at: you can check your rates yourself. Term is the least expensive type of coverage, and we have access to the lowest rates available.


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