Health Savings Accounts

With HSA plans, individuals and families have the opportunity to substantially reduce the amount of money they spend on their health insurance coverage.  A health savings plan combines a high deductible health plan with a health savings account.  Also known as a Medical Savings Plan, these savings plans help the consumer by loweing their health insurance premium and offering tax incentives at the same time.

By lowering premiums and creating a substantial tax savings, a health savings plan can dramtically reduce your overall health insurance costs.  With the discount consumers get on their health savings plan, plus the discount on the amount of taxes they pay, these health savings plans will help change the way our health care system works.  With a health savings plan, the consumer will be in charge of their health care dollars.

In an article about health savings accounts entitled “Health Care in the 21st Century”, published in the New England Journal of Medicine on January 20, 2005, Senate Majority Leader Bill Frist, M.D., made suggestions on ways to provide all Americans with lifelong, affordable health plans.  Senator Frist was a surgeon before entering politics.  One of the key aspects of his vision for affordable health insurance is a system that is responsive primarily to individual consumers, rather than to third-party payers.  This concept is known as consumer-driven health care.

A key aspect to enabling consumer-driven health care was the creation of a tax-free Health Savings Account (HSA).  Health savings account legislation was part of the Medicare Modernization Act (Public Law 108-173). “A Health Savings Account, coupled with affordable high deductible insurance policies, gives the consumers more control over their health care choices and hard earned dollars.  Health Savings Accounts give people a greater stake in their own health care.  Health savings accounts can move with employees from job to job and can be rolled over year to year.  Health Savings Accounts should increase the demand for greater information and price transparency.”

The other factor in play with a HSA health plan is the financial motivation the individual will have to stay healthy.  The vast majority of HSA health care spending today is due to degenerative diseases such as high blood pressure, diabetes, cardiovascular disease, and other modern ailments that are primarily the result of lifestyle choices.  An HSA consumer who wisely spends his HSA dollars on preventative care (which can be done tax-free wiht an HSA) and pays attention to diet and exercise could be rewarded with a substantial amount of money in their HSA by age 65.

Another key aspect to health savings accounts is the role high deductible health insurance plans (HDHP) will play. Every individual or family with an HDHP will be more responsible with their health insurance spending because the money will come out of their own health savings account.  Any money not spent on the high deductible health insurance plan can be saved over the years.  An HDHP is one of the key aspects that makes a health savings account such a great deal.

Also known as a Medical Savings Account, are presented with a new way to pay for health care. Under traditional medical insurance, the insurer pays the actual medical bill while the individual simply make monthly premium payment. With a Medical Savings Account, people can limit medical insurance to catastrophic coverage, reduce monthly medical insurance premium payments and make deposits to a Medical Savings Account instead. Medical insurance would pay for expensive treatments that occur infrequently, while individuals would use their savings funds to pay small bills covering routine services.

Visit http://www.health--savings--accounts.com for complete details on Health Savings Accounts.