Health Savings Accounts; Obama’s Healthcare Christmas Gift
During the presidential campaign, candidate Barack Obama spoke of a healthcare plan that would cover everyone, cut costs and ensure greater choices for consumers. President Obama will be hard-pressed to match those results, but there is a gift hidden under the president-elect’s Christmas tree if he’s bold enough to look.
There is one healthcare option that received little mention, but works regardless of how the legislation of the coming year pans out – Health Savings Accounts.
Health Savings Accounts, or HSAs, came about as part of the Medicare Reform Act of 2003, and they offer consumers a tax-free medium for healthcare. With HSAs, consumers typically employ a high-deductible health insurance policy to protect against major medical expenses, while establishing a savings account to use for small, day to day medical expenses. What makes it affordable is that the high deductible policy is significantly less expensive than traditional HMOs, and the money they deposit into their HSA is PRE-TAX dollars. The law allows people to take money out of their paycheck and deposit it directly into their HSA before they pay taxes on it. So, not only do they save on their insurance premiums, but they are also able to save on their taxes.
Moreover, HSA money can be used to pay for ANY medical expense, from over-the-counter headache medications, knee braces or orthopedic shoes. Anything remotely medical can be paid for out of that account, all funded with pre-tax dollars. Finally, at the end of the year, any money left over in the HSA account can be rolled over – tax-deferred – to use the next year. Flex spending accounts don’t allow that – if you don’t lose it during the calendar year, you lose it.
These plans were created in response to the rising cost of health care with the intent to give the consumer back the control of their health care costs and in many cases reduce premiums by 30-40% or more on an annual basis.
These unique plans provide consumers greater control, more choices, tax advantages and are generally more affordable than their HMO and PPO second cousins, according to Richard Monello, president and CEO of Custom Health Plans, Inc. (www.customhealthplans.com)
“Nothing in the marketplace can match the benefits of HSAs,” Monello said. “With the ideologues fighting over the concepts of government controlled universal healthcare and the value of allowing the free market to fix itself, HSAs stand out as a natural evolution of modern healthcare. They embody everything the consumer wants – more control, lower cost and tax advantages – while at the same time helping healthcare providers enjoy lower risk and higher cash flow. HSAs are the best of both worlds.”
Moreover, HSAs are private, and regardless of any universal healthcare legislation that is passed, they are likely to remain unchanged and untouched by any additional government regulation.
“We all have to question the wisdom of having the government run any kind of universal healthcare system, as government has not generally been known as a paragon of efficiency and fairness,” Monello said. “Given the choice, I think consumers would rather enjoy HSA premiums, which tend to be 30 to 40 percent lower than traditional HMOs or PPOs. Further, there is typically 100 percent coverage for all medical, dental and vision needs. Combine that with the freedom to choose any doctor and any hospital, HSAs are more than competitive – they’re tough to beat.”
Richard J. Monello is the principal and founder of Custom Health Plans Inc. a full Service General Health Insurance Agency based in Dallas TX. Custom Health Plans specializes in providing Health Insurance plans to Individuals/ Families, Small businesses and the Self employed. They Specialize in Health Savings Accounts (HSA’s) and High Deductible Health Plans (HDHP). Their Team of Professionals has over 30 years of experience in the Insurance and Financial Services Industries and prides themselves on their service, respect and professionalism afforded to all of our clients.