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Friday, May 4, 2018

How a Health Savings Account Can Solve Health Care Problems

Health care is one of the necessities of every person. But with its continuously rising costs, it is now being considered optional. Opening a Health Savings Account could be the solution to the problem but there are things to keep in mind.
According to the annual research from Kaiser Family Foundation and the Health Research & Education Trust, every typical working American spends $5,714 for a family health-insurance plan, 30 percent of the total $18,764 cost in 2017. Whereas five years ago, workers shouldered $4,316 of the $15,745 or 27 percent.

To somehow alleviate the costs, some tend to go for a High Deductible Health Plan (HDHP) which is available for most health insurance providers. It has lower monthly premiums and a higher yearly deductible compared to the regular ones.

It has benefits like lower costs, quality insurance, one calendar-year deductible per family, can pay 100% of covered expenses after meeting the deductible. However, it requires payment of the whole deductible amount if ever the person's health costs rise above the set threshold.

Thankfully, the IRS came up with an option that can help in budgeting health emergencies. Health Savings Account or HSA is a tax-advantaged savings account particularly for medical expenses. It is open to those who have a qualifying high deductible health plan. What's more, it's non-expiring even if you leave your job or change insurance plans and can even be transferred to a spouse in case of death.

Furthermore, it can be combined with the HDHP and can bring about better and several benefits. It would allow for a lower annual health care premium as well as increased chance to build up a tax advantageous health emergency fund that would cover the amount of the deductible and most importantly, health emergencies.
DISCLAIMER: The content or opinions expressed on this web site are not to be interpreted as medical advice. Please consult with your doctor or medical practictioner before utilizing any suggestions on this web site.