Are HSA's Worth It?:

In the recent years my health insurance premiums have risen so fast that I have contemplated not having health insurance altogether. The only problem is that I have a wife and 2 kids that probably wouldn't agree with that choice. Our family PPO plan has gone from about $350 to over $1000/month here in Oregon and I have tried a variety of health insurance carriers like Blue Cross, Assurant Health, LifeWise and ODS. No matter which one we have been with (we have no pre-existing conditions) the rates keep climbing 10, 15, and 20+ percent each year. Health care costs are rising as a whole and so our rates go up. I own a small business so I don't have the big company plans offered to so many. Instead I have to find my own health insurance and get the best rates possible - low premiums and small deductibles.

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I have given up fighting the higher premiums, those are here to stay as long as we want to give people health care even if they have no insurance or have pre-existing conditions. What I can do is go with the HSA plans that are offered by most (if not all) health insurers. What are HSA Plans? - Essentially you pay a lower monthly premium and take the risk of paying a higher deductible if and when that time comes. My wife and I are in our 40's and very healthy so I took the chance of lowering our monthly health insurance premiums and raised our deductible to $7000. My kids do go to the doctor every once in a while, but the savings on the monthly premiums for health insurance far outweigh what we have paid towards our deductible in year one (2010). As we move into 2011 I hope that we stay healthy and continue to save money on our health insurance costs. HSA Insurance Plans or high deductible health plans (HDHP) can lower your monthly premiums by 40 to 50%. In our case, we are now paying $350 a month for a family of 4 instead of the $1000+/month they would have taken with our old plan through Regence BlueCross Blueshield. We still get to keep the same doctors and insurance network as before, it's just that the cost pickup by us has increased if something does go wrong. We no longer have a co-pay as we pay all the doctors visit ourselves (part of our higher deductible). You may not think that's a great idea, but the math doesn't lie for the average, healthy family. Why give them guaranteed money in a high premium low deductible plan when you can buy into a HDHP and perhaps save the money each month instead.

How Do I Sign up for an HSA Plan?:

I have an insurance broker that I use up in Oregon, but you can find websites for your state insurance options and see who offers what. I like the fact that my broker sorts through the plans for me and only sends me viable options. We have discussed my situation a lot so he knows what we are looking for. BlueCross BlueShield is available in many states and they are a good place to start. I have their Regence Evolve HSA Plan with a $7000 deductible and monthly premium below $400/family. You will need to know things like Annual Deductible, Annual Coinsurance Maximums, and Annual benefit Maximums, but the insurance company can explain those when you signup. It's always good to know what the copays are or percentages on each coverage. When you signup for an HSA health plan, the odds are you are paying for almost all expensives up to your deductible since you are essentially paying a lowered monthly premium. Ask your health care insurance company if they offer any HSA healthplans.

Tax Savings with an HSA Plan:

Health insurance can get complicated with copays, deductibles, premiums, out of pocket expensese, etc. Keep in mind that HSA accounts (with HSA health plans) are designed so that you get tax free dollars going towards your health care. Each year I can put close to $6150 into an HSA qualified account and get a tax write off for that amount. The HSA contribution limits 2011 are $3050 for singles and $6150 for family plans. If you are 55 or older, you have the option to do $1000 as a catchup contribution. The money grows tax free in the account and can be used for future health care related costs that you or your family accrues. I general take the $6000 back out at the end of the year as my out of pocket expenses had reached that level (or pretty close) in previous years. This year I am hoping to keep my premiums below $400/month and keep our doctor visits to a minimum so my out of pocket expenses are minimal. The HSA plan is just there as a way to pay off additional health care expenses with tax free growth money. I use HSABank.com as my HSA account and the only thing I can complain about in the few years I've been using them is that they charge a monthly fee to have the account. Most banks do, so if you can find one that doesn't, go with it. The tax savings are nice at the end of the year as the HSA contribution is a direct write off.

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