How to Take Care of Your Own Health Care
Politicians, union leaders, insurance companies and everyone else under the sun is telling us which bill, tactic, initiative, plan or speech on health care we should support. We are told stories and shown reports of people losing their benefits due to increasing costs. If you are financially responsible, you can turn the tide without joining a union or requiring the government to support you.
Health Savings Accounts (HSA) were enacted during the Bush administration and are paired with high-deductible health plans. The premiums are smaller, many employers offer an annual deposit into your HSA, and the money that is spent out of your HSA is tax-free (pre-tax).
I have personally used an HSA for three years and have watched my premiums decrease for the last two years. The savings in premiums were put back into the HSA to provide for any catastrophic medical needs we may have in the future. Any money left in the HSA at the end of the year simply rolls-over and keeps adding up. During years when everyone stays healthy, we rack up huge savings. If anyone gets really sick, we don’t go bankrupt, we go to the HSA. Our high-deductible health plan kicks in once we hit the deductible and pays 100% of all costs with no limits.
The key to these plans is that it only kicks in when someone gets really sick or hurt. I don’t need insurance to pay for an office visit or inexpensive drugs. This is the same for auto insurance. Choosing higher-deductibles means having lower premiums (or getting much better coverage for the same cost). Do we really need insurance to pay for an oil change or cracked windshield? Not if we know how to put money away for a rainy day.
You are often able to use the money in your HSA for things that you could not use your standard HMO/PPO plans. Dental expenses, all pharmaceuticals, therapies and treatments that a standard plan won’t pay for.
HSA’s aren’t for everyone. To avoid getting into a worse situation than you started with, you much actively and aggressively fund it. Don’t simply pick the highest-deductible plan because it has the lowest premiums. Choosing such a high-deductible could create problems if a medical disaster occurs before you’ve built up your HSA. Look at what you can put into the account, understand what your employer’s contribution will be and consider your family’s health situation.
If you are the personally responsible type, consider an HSA with a high-deductible health plan. It may save you quite a lot on health care insurance and give you more freedom in your medical choices than you are previously accustomed.
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