An Introductory Guide To The Health Savings Account
- Date: 2007-04-26 - Word Count: 440
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The United States is unique in that we may be the richest country on the planet, but have a system that fails to provide health care to many of our citizens. The Health Savings Account is one of many efforts to solve this problem.
Ah, the great healthcare debate. The medical profession has seen some absolutely stunning advances over the years. The advances have wiped out certain diseases that used to be catastrophic and a come up with solutions that mean formerly terminal health problems no longer are.
Unfortunately, these advancements have led to a catch-22 situation. The research and care costs money, so much so that many people cannot afford the cost of health care. Of the 300 million plus people in the country, some 240 million have some form of health care. Many of these forms are lacking and it still leaves us with 60 million or so people who have no coverage. That is pretty discouraging given the economic state of the country.
Both federal and state governments have had a go at the healthcare coverage issue. There has been no universal solution that has worked. Instead, the problem is now approached with a variety of programs in an effort to take chunks out of the problem. The Health Savings Account represents one such effort.
The Health Savings Account is an interesting approach to the problem. In simple terms, it works as follows. You contribute cash to a health savings account. At the same time, you buy a high deductible health insurance policy. The account can then be used to pay most of your health costs. If you run into something significant that is going to be expensive such as surgery or an extended hospital stay, the high deductible insurance policy kicks in.
There are a couple of advantages to the Health Savings Account. First, you cut the cost of insurance as the premiums for the high deductible policy will be significantly lower than a regular health insurance policy. Second, the money you contribute to the Health Savings Account is tax free. It also rolls over to the next calendar year without any tax consequences.
So, what can you contribute to your account? The numbers seem to change each year. For 2007, an individual can contribute up to $2,850. For families, the number is $5,650. The numbers change constantly, so make sure to speak with your financial advisor if you are interested in the program.
Is the Health Savings Account the answer to the healthcare coverage problems in the country? Unfortunately, no. It does, however, act as a small part of the solution and every little step helps.
Ah, the great healthcare debate. The medical profession has seen some absolutely stunning advances over the years. The advances have wiped out certain diseases that used to be catastrophic and a come up with solutions that mean formerly terminal health problems no longer are.
Unfortunately, these advancements have led to a catch-22 situation. The research and care costs money, so much so that many people cannot afford the cost of health care. Of the 300 million plus people in the country, some 240 million have some form of health care. Many of these forms are lacking and it still leaves us with 60 million or so people who have no coverage. That is pretty discouraging given the economic state of the country.
Both federal and state governments have had a go at the healthcare coverage issue. There has been no universal solution that has worked. Instead, the problem is now approached with a variety of programs in an effort to take chunks out of the problem. The Health Savings Account represents one such effort.
The Health Savings Account is an interesting approach to the problem. In simple terms, it works as follows. You contribute cash to a health savings account. At the same time, you buy a high deductible health insurance policy. The account can then be used to pay most of your health costs. If you run into something significant that is going to be expensive such as surgery or an extended hospital stay, the high deductible insurance policy kicks in.
There are a couple of advantages to the Health Savings Account. First, you cut the cost of insurance as the premiums for the high deductible policy will be significantly lower than a regular health insurance policy. Second, the money you contribute to the Health Savings Account is tax free. It also rolls over to the next calendar year without any tax consequences.
So, what can you contribute to your account? The numbers seem to change each year. For 2007, an individual can contribute up to $2,850. For families, the number is $5,650. The numbers change constantly, so make sure to speak with your financial advisor if you are interested in the program.
Is the Health Savings Account the answer to the healthcare coverage problems in the country? Unfortunately, no. It does, however, act as a small part of the solution and every little step helps.
Related Tags: health, insurance, policy, care, healthcare, coverage, hsa, health savings account, saving account
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