Purchasing health insurance should be one of the most common-sense decisions you can make. But, the fact is, way too many people still aren’t covered.
With medical debt being one of the top reasons for bankruptcy in America, health insurance is a huge part of a solid financial plan. If you’ve been to the doctor or stayed in a hospital, you know how expensive healthcare can be. It is almost as though you just walk past a hospital and they charge you money. Health insurance should be a top priority for everyone.
One great option is the Health Savings Account (HSA).
As of 2013, a family can save up to $6,450 (individuals can save up to $3,250) tax free in an HSA to use toward their health insurance deductible. This means you can save by carrying a high-deductible HSA insurance policy. If your deductible is higher, then your monthly premium is normally lower, which will give you the money to save. Contact us for more information regarding an HSA policy.
Major Medical Insurance
Major medical insurance typically covers:
- Inpatient hospital expenses
- Doctors expenses
- Outpatient medical expenses
- Prescription drugs
- Preventative & wellness care
In today’s world of high medical costs, insurance companies control costs by establishing a “Network” of physicians and hospitals that agree to reduced charges for medical services. Most insurance plans allow the insured to seek medical care outside of the “Network”. However, the costs to the insured are higher out of “Network” than in “Network”. For example, an insurance company that pays 80% of in “Network” expenses will only pay 60% for out of “Network” expenses.
Tax Qualified HDHP (high deductible health plan) Insurance
HDHP insurance policies offer coverage similar to the typical major medical plan except that the minimum deductible is $1250 per individual or $2500 per family.
The advantage of a HDHP is the ability to establish a HSA (health savings account). An individual can contribute an amount equal to or less than his deductible to his HSA. Features of a HSA are:
- Annual contributions are deductible from gross income for income tax purposes.
- Funds in the HSA grow tax deferred.
- Funds can be withdrawn tax free to pay medical expenses including Long Term Care premiums, Dental, Vision, etc.
- After age 65, funds can be withdrawn for non-medical reasons without penalty.
- An individual never forfeits their funds.
- In the event of death, funds are passed tax free to the individual’s beneficiary.