Health Savings Accounts: Insurance of the Future

Keeping our bodies healthy can be quite expensive, in fact in the United States about $7000 a year per every person in the United States is spent on health care. This is much higher than pretty much any other country in the world. Health care spending was 16% of the United States’ gross domestic product. By 2015, it’s estimated that Americans will spend a total of $2 trillion dollars a year on health care. If you have to pay for your own healthcare and don’t have insurance through your employer, it can get quite costly quite quickly! The cost of an employee insurance plan for a family of four averaged $11,000 per year

Buying health insurance for your self is quite expensive, but if you’re a generally healthy person, there’s a new option on the market which should help decrease the cost of your health care costs. On December 8th, 2003, President Bush signed into law the Medicare Prescription Drug, Improvement, and Modernization Act. One of the parts of the legislation included the creation of health savings accounts, which is a very viable option for healthy people to get insurance.

So just what is a health savings account? It’s a different type of health insurance, and an alternative way to pay for health care. It’s a combination of a savings account and a high deductible health care plan, which offers numerous tax benefits and can probably save you a lot of money.

The first component of the HSA is the high deductible health plan (HDHP), which is a form of inexpensive insurance which has a very high deductible ($5000-$10000), and then pays 100% of the costs after that. Generally it does not cover basic trips to the doctor for common ailments, but if you have a catastrophic illness, it will be there to help you. If you are sick a lot and have to visit the doctor on a regular basis, an HSA might not be for you, because you will eat through your HSA right away, but if you’re a healthy family, an HSA could save you a good sum of money!