Health Savings Accounts are the most promising way to deal withthe issue of rising health care costs and the growing number ofuninsured Americans. But too many people don't understand what theyare or where to sign up for them. Now there are some easy answers.
Health Savings Accounts are a concept that combines a high-deductible health insurance policy and a tax-favored savings account.Together they cover you against catastrophic medical expenses, whileallowing you to choose your physician, and save the money you don'tspend paying for health care.
Here are the two parts of the program:
High deductible insurance: Instead of buying a health insurancepolicy with a $250 deductible, you'd buy a policy with a $2,500deductible for a lot smaller monthly premium. But you must pay forthe first $2,500 in medical expenses each year. Don't panic about thehigh deductible. You're growing money in a separate account to paythose first health care bills.
The health savings account: The money you save on insurancepremiums each year goes into a tax-deductible savings/investmentaccount. An individual can contribute and deduct up to $2,650 in HSAcontributions per year, although you don't need to put that maximumamount of money into the account to set it up. For families, themaximum tax-free contribution level is $5,250. And if you don't spendit this year, the money rolls over to future years for medicalexpenses, and keeps growing tax free.
Why HSAs make sense
Big corporations were the first to adopt HSAs, because the plansoffer lower premiums. But there have been very few HSA plansavailable to individuals, and they require a determined search,usually through an insurance broker. Until now.
This month, BlueCross/ BlueShield of Illinois is offering a newHSA package to residents of Illinois. It's called the "Blue EdgeIndividual HSA," and it combines a traditional BlueCross/BlueShieldhealth and hospitalization insurance policy with an insured savingsaccount offered by one of several financial institutions.
If you thought you couldn't afford health insurance, this is thetime to take a closer look. Here are some premium examples from theBlues' plan:
A 40-year-old man in Chicago could have complete, 100 percenthealth care coverage above a $1,000 deductible for $150 per month. Ifhe were willing to shoulder the burden of the first $5,000 inexpenses, the premium would be just $100. Even if a medical disasterwere to occur, his out-of-pocket expenses would be only $5,000, theamount of the deductible -- probably not enough to cause a forcedbankruptcy.
Since the plans are both age and gender based, here's an exampleof the costs for a 50-year-old Chicago woman. With a $1,000deductible, she'd pay $236 a month. And with a $5,000 deductible, hermonthly premium would be only $157.
A family of four -- parents in their 30s with two young children -- would pay roughly $381 a month to get complete coverage after a$2,000 family deductible. And with this plan, the family can chooseits own physician and hospital within the huge Blue Cross network,with no approvals needed before accessing service.
To get individualized cost information, go to www.BCBSIL.com. Fillin the blanks for your age, location, gender, and the deductibleyou're willing to absorb. You can print out an application from theWeb site or you can call (800) 654-7385 for more information.
A health examination may be required, depending on your answers tothe questions on the application. Once you've been approved, you canset up your tax-deductible HSA savings account.
Other companies, such as Golden Rule, Humana and Unicare, offersimilar HSA programs for individuals. But Blue Cross is the only planthat offers optional maternity coverage. And the others requireclients to use physicians in their smaller networks, or payadditional costs above the deductible for out-of-network providers.
A boon to the uninsured
If you don't have health insurance, you're not alone. But jointhose who are embracing HSAs. Research from AHIP, the healthinsurance association, shows that 30 percent of the people whopurchase an HSA plan were previously uninsured.
Don't risk losing everything to an unexpected and uninsuredmedical disaster when the solution is now easily available. That'sthe Savage Truth.
Terry Savage is a registered investment adviser. Distributed byCreators Syndicate.
Комментариев нет:
Отправить комментарий