Health Savings Accounts (HSAs) Lower Health Insurance Costs
Submitted by: Steve Klein
Health care costs can be very expensive and the insurance industry can be very difficult to navigate. Moving to a high deductible plan that is compatible with a health savings account or HSA will lower your monthly premium by 30 to 50%. The premium savings alone will often be more than enough to cover the higher deductible. In addition, there is a built in tax advantage that will save you even more money will allowing you to build a health care savings plan to cover future expenses. Here’s how it works.
When choosing a health plan, you must select a deductible of at least $1,100 for the year. In 2009, this will actually go up slightly to $1,150. A Blue Cross plan in Maryland for a 35 year old male with a $500 deductible would cost $202 a month in premium. For this same client, the HSA with a $1,200 deductible would only cost $91 a month! This represents a savings of $111 a month which the insured would keep in his pocket. This represents an annual savings of over $1,300 a year which more than makes up for the $700 difference in the deductible. In addition, once the deductible has been met our 35 year old male client will be 100% covered with no coinsurance responsibility. This represents a tremendous financial savings and makes the plan very affordable.
In addition to the savings of over 50% in this case, out of pocket expenses can be paid from tax free savings. If this same client were to open a separate checking account and designate it as his HSA account, he can deposit up to $3,000 a year in this account and write it off on his tax return. It is basically an IRA account for health care! These funds can not only be used to pay for deductibles, copayments and prescriptions, but also can be used for over the counter items as well. Contact me at steve@mrinsuranceofmaryland.com for complete list of allowable expenses.
The corporate world offers flex spending accounts but HSAs have a feature that makes it significantly better. With a flex spending account, you either use it or lose it during the calendar year and each year you start over. The HSA account allows you to roll over money year after year so that you are building a long term savings account for health care. In addition, once you reach 65 any money that you have in your account can be withdrawn tax free.
I work with clients in Maryland and Virginia. Several carriers in these states including the Blue Cross plans, United HealthOne, Aetna, and others offer excellent HSAs at very reasonable prices. Among the numerous Maryland Health Insurance Plans you can choose from, the health savings account offers the most protection at an affordable price. This is also true in Virginia. Don’t let yourself pay more than you should for insurance and for health care. Call me today on 866-654-4844 or get your insurance quotes on the web at www.mrinsuranceofmaryland.com. We are local, full service, and there is no charge for the service provided. Remember…your health is our business!
Leave a Reply