Health Insurance has gotten ridiculous in price.Â Thirty years ago, what you pay per month is probably about what you would pay per year.Â For families (or even individuals) who are self-employed, the premiums can cost as much as the mortgage.Â Thatâ€™s just wrong.Â Health Savings Accounts could be the answer to this injustice.
In the past, insurance was designed to cover â€œcatastrophicâ€ events (much like car insurance or home ownerâ€™s insurance today).Â It did not cover the daily needs of patients and therefore patients were much more aware of what things cost and how they spent their money.Â You wouldnâ€™t find someone going to the hospital for the sniffles because they didnâ€™t want to have to pay for that visit.Â They would wait until the office opened on Monday.
When you work for a company that provides health insurance, you donâ€™t thing about how much the premium costs.Â The company pays for a portion of your premium and itâ€™s just considered a â€œbenefit.â€Â How much more beneficial would it be for most of us if that money was used the way we wanted it to be used.
Health Savings Accounts are a new way to take back control of your health care.Â Every year you can put a certain amount of money in a savings account â€“ tax deferred (that means the government doesnâ€™t get a piece of the pie).Â You can use the money for medical expenses (like doctorâ€™s visits, prescriptions, etc), but only for medical expenses.Â At the age of 65 (the time when the government has determined that you can retire) you can then access the money without any tax penalties.Â It is similar, because of this, to a retirement account.
There are some restrictions â€“ of course.Â You have to have a â€œcatastrophicâ€ insurance plan in place before you can set up a health savings account.Â The idea is that you will use the money that would have gone to a traditional insurance premium to pay for the catastrophic plan and to fund the HSA.
The Health Savings Account will probably be the best choice for our family.Â Because of past complications, we are through with the maternity coverage; over all, we are about as healthy as a crew can be; and to get a decent premium for our family I have to choose an insane deductible anyway.
It will be interesting to see how many others choose the HSA over the next few years.Â As people become more educated about insurance and choice, I think that the numbers will continue to rise.