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After I decide to work part-time and be part-time self-employed I got a high deductible policy (only $66 a month) and opened a HSA. Anyhow, I really like the way it works. I'm not so sure how it would work for someone older, but if your youngish its great. While you are young and have relatively low medical costs you can build up the HSA and have plenty of money for your medical costs as you age.
I've had one for the last 5 years, and I've been happy with it so far. My employer contributes a decent amount, but not enough to cover the deductible each year. Fortunately I don't dip into it very often since I rarely need to visit the doctor. Most of my expenses actually go toward dental each year.
I don't care for the ridiculously low interest rates (just as bad as throwing money into CDs or a money market account). I know some financial institutions allow you to invest your HSA in certain funds once you reach a set threshold, but the bank tied to my employer doesn't offer this. So, I only contribute a small sum of my own money each month. Instead I invest the money saved via lower premiums into equities where I can get a much better return.
In my opinion, the fees are currently too high for the services offered - at least they were with my wife's and my corporate offerings. My wife's work mitigated the fees by contributing an amount. Mine doesn't.
i like the high-deductible, HSA health insurance program as a single & healthy 25 year old. my health insurance is cheap (i pay ~$50/month and have $2400 deductible) and my company matches HSA contributions. i don't go to the doctor very often beyond routine check ups so by the time i do have to go for something i have enough in my HSA to cover my deductible. the health insurance is more like emergency insurance to me. for a family with children or for anyone with a prexisting condition, i can see why this set up would be frustrating.
I think they are the worst sort of garbage. Here's why:
1. No one has a clue how much they will pay for medical expenses in a given year. You may be completely healthy or you may need a heart transplant to survive. How do you calculate a reasonable savings amount given that information?
2. Why should medical care which is the most inefficient and bloated sector of the economy be subsidized by the tax system? I'd feel better giving people a break on retail purchases at stores like Walmart or Costco. At least, I know the prices paid for those items are competitive and involve little profit for the seller.
3. It takes pressure off the medical system to get costs under control and start offering services at rates that don't bankrupt public and private health insurance systems.
4. It puts pressure on the wrong place. The consumer should not be penalized for things like going to the doctor when he thinks he may need to go. You don't want people forgoing needed primary and diagnostic care which may prevent ailments from getting worse and resulting in long, expensive, and complex medical procedures later.
I hope for their elimination and the creation of what we really need in this country: A single payer health insurance system like the one in Canada.
Lastly, feel free to criticize my opinion. However, I hope anyone who is critical has something more intelligent to say than "I guess you like socialism".
I like my HSA. I pay about $110 for a 32yr/male, and of that they contribute $62.50 into my HSA. I'm pretty healthy so I figure if I don't spend more than $750 ($62.50x12) in a year for medical needs, then I can let my HSA grow. Also I maximize my HSA contributions so I can get the tax deduction. I figure at some point, I'm going to need it for healthcare needs so why not pre-fund when I have the extra cash? I'm already maximizing my TSP so it's not cutting into that.
They gave me a VISA debit card and it pulls directly from my HSA. I just keep the receipts for my records and I can check out my balance through their website.
I think they are the worst sort of garbage. Here's why:
1. No one has a clue how much they will pay for medical expenses in a given year. You may be completely healthy or you may need a heart transplant to survive. How do you calculate a reasonable savings amount given that information?
2. Why should medical care which is the most inefficient and bloated sector of the economy be subsidized by the tax system? I'd feel better giving people a break on retail purchases at stores like Walmart or Costco. At least, I know the prices paid for those items are competitive and involve little profit for the seller.
3. It takes pressure off the medical system to get costs under control and start offering services at rates that don't bankrupt public and private health insurance systems.
4. It puts pressure on the wrong place. The consumer should not be penalized for things like going to the doctor when he thinks he may need to go. You don't want people forgoing needed primary and diagnostic care which may prevent ailments from getting worse and resulting in long, expensive, and complex medical procedures later.
I hope for their elimination and the creation of what we really need in this country: A single payer health insurance system like the one in Canada.
Lastly, feel free to criticize my opinion. However, I hope anyone who is critical has something more intelligent to say than "I guess you like socialism".
1. No need to calculate anything, you can pay into a health savings account as you go.
2. It's totally tax free money to encourage people to save.
3. I don't want the extraordinarily LARGE taxes paid in Canada, thanks. I also like instant access to health care I can get here, thanks. I don't want to have to wait 9 months for a surgery I can get here in a day....that kind of stuff.
I think you are confusing a Health Savings Account with a Flexible Spending Account, they are not the same thing.
i like the high-deductible, HSA health insurance program as a single & healthy 25 year old. my health insurance is cheap (i pay ~$50/month and have $2400 deductible) and my company matches HSA contributions. i don't go to the doctor very often beyond routine check ups so by the time i do have to go for something i have enough in my HSA to cover my deductible. the health insurance is more like emergency insurance to me. for a family with children or for anyone with a prexisting condition, i can see why this set up would be frustrating.
HSA + High Deductible plan works very well for us - a family of 4 with 2 children. My kids are not little, and we don't go to the doctors very often (hope to keep it this way). I pay a whopping $19 a month for a family plan! This is also the least restricted PPO plan my employer offers. In comparison, another "sort of PPO" is $200 a month for a family plan. The rest of the plans are HMO, which I will never take given an option of PPO. For a difference between the premiums, we could visit a doctor two times a months, or afford some expensive tests several times a year. In reality, we routinely go to dermatologist (have some family history) and family doctors/pediatrician for check ups. Check ups are covered at 100%, btw.
I contribute $600 a month toward the HSA to max out allowable contribution. I currently have ~$5,000 there, and it means no maintenance fee and 0.29% interest rate. My account is with HSA Bank - check them out if you think "fees are too high". As long as you maintain $2000 balance, it's free.
I tried to explain the concept of saving on the monthly premium and on tax liability to my childless married co-worker and he just doesn't get it. He says you inevitably will procrastinate going to the doctor if you are in a high deductible plan. I never feel like we do - the money is there already, so I don't feel stressed if we need to visit a doctor. In addition, since I have a wide PPO network, I feel like I'm being more in control of my healthcare, than my HMO enrolled co-workers.
I've saved hundreds if not thousands of dollars already being in the plan for only two years.
My older son is receiving orthodontic care right now, and I love the fact that I'm basically paying at a 25% discount, since payments are coming from our HSA, and 25% is our tax bracket.
we love the hsa, i wish we had it decades ago. our medical inurence costs have been far lower than regular medical insurance would have cost us.
plus we use it for dental and eye glasses.
we could pay 15k for full insurance and still have co-pays. instead we pay about 6k for insurance and fund with 7250.00
even if we hit our deductable of 3k each or 6k family and spend the full 7250.00 we are ahead and now have 100% coverage and no co-pays.
anyone who says they do not like hsa's i would venture to say does not understand how they work.
... velly interesting - I hadn't thought about that. What happens if you have a major expense/deductible? (Is the $6K vs $15K policy deductible completely covered by a $3/$6K deductible?). Also, would this approach be a good alternative to a Medicare supplement? (Does the HSA account carry-over or have to be spent each year?)
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