Pros
* Tax-free accounts could accumulate money over several years and turn into a sizable health-care nest egg for healthy people with low medical expenses.
* Consumer is more likely to question health-care expenses that currently do not get much scrutiny.
* High-deductible policies that must be linked with HSAs tend to be cheaper.
* May be attractive to young, healthy people who are uninsured.
* With incentives, could drive down cost of insurance for small- business employees.
* If an individual is age 65 or older, he or she can treat certain health insurance premiums (other than premiums for a Medicare supplemental policy, such as Medigap) as qualified medical expenses for purposes of an HSA.
* If an employer establishes an HSA for employees, deductible contributions can be made to the HSA account of an employee. Certain rules apply.
Cons
* Low-income people don't have as much money to salt away as the well-to-do and often cannot afford the high out-of-pocket costs.
* Could cause some to delay or deny themselves needed care in order to economize.
* Chronically ill people would spend accounts each year and would face high deductibles.
* Could make health care for older, sicker people more expensive as young, healthier people abandon the risk pool.
* Could move consumers away from the employer-based insurance model and into individual insurance. But the individual insurance market does not cover people who are sick and is less well- regulated.
* Shopping for health care is difficult when little good information exists that can support comparison shopping.
* In making contributions, care must be exercised, since excess contributions are subject to a six percent excise tax
* Beginning with the first month in which an individual is enrolled in Medicare, he or she can no longer contribute to the HSA.
* An individual generally cannot have any other health coverage that is not an HDHP.
Choosing an Affordable health insurance option doesn't have to be complicated.
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Author, Craig Stiff, Marketing Director for Lifespring Health, writes on the benefits of Health Savings Accounts as an alternative to expensive Health Insurance Policies. More information can be found at www.LifespringHealth.com.