Posts Tagged ‘Joe Six Pack Needs an HSA’
Even Joe Six Pack Needs an HSA!
Ask any American how they would want their health insurance benefits to work (if given a choice) and the answer might be, “It should pay 100% of everything all the time.” With that kind of consumer response, one might hesitate to suggest that what they really need is to set up an HSA (Health Savings Account) policy with a large deductible.
I too would want health insurance that pays 100% of everything all the time if I were absolutely certain that my plan would pay for everything I was prescribed. However, the opposite is more likely to happen. Whatever plan coverage you have today, is not likely to be the plan coverage you will have ten years from today. Worse yet, health plans are rapidly reducing coverage, raising premiums, restricting benefits, and shifting costs onto the insured.
President Obama has already made it known that his healthcare reforms will involve cost controls. In part, his program will rank the effectiveness of various medications and medical procedures so that the “less worthy” (as compared to their cost) can be eliminated! This all sounds good in theory but the end-result could be that many Americans will have to pay out-of-pocket for medications and procedures that might otherwise have been covered by their health insurance.
If you are not a wealthy person, or a Washington big-wheel, then your quality of care could be at risk because you will not have access to the latest or best medical technologies. An easy defense that consumers can employ is to switch their coverage to a high-deductible HSA health plan and start setting aside extra monies to help cover the cost of their future medical care.
Simply put, an HSA is a health insurance policy with lower premiums because it carries a high plan deductible. What is more, the premium savings can be deposited into a special tax-advantaged account that can be used for “qualified” healthcare expenses or for retirement. These accumulated funds can help provide an added degree of treatment flexibility in the case of an illness. This could become especially important in the event that your health insurance plan denies important treatments.
As an example, look at the recent controversy surrounding Pfizer’s cancer medication Sutent. Britian’s National Institute for Health and Clinical Excellence (NICE) decides which treatments are cost effective, and thus worth paying for under their “free” national healthcare system. Originally, they denied coverage for this Rx because they said it was too costly for the relatively short period of time it could extend a patient’s life. After unprecedented pressure from a number of sources, they moderated their position so that select patients could receive it.
Unfortunately, the number of insurance payment denials (under the auspices of “cost containment”) will undoubtedly rise in the future. Consumers who have accumulated an HSA nest egg will have more flexibility with their care. As a patient in the aforementioned example, you could simply have used your HSA monies to pay the Sutent Rx costs.
Having a serious illness (like cancer) is traumatic enough. Having money set aside to help control your own medical care at a tumultuous time can provide real peace of mind. Without it, you may be left to the devices of an insurance company bean counter or one of the government bureaucrats tasked with running health care.
For those of us who cannot write a check at the drop-of-the-hat to cover expensive therapies, a tax-deductible, and tax-advantage savings nest egg is our best defense. We should all prepare for the day when government penny pinchers get more involved in our healthcare decisions as the effort gets underway to reduce our free-wheeling medical expenditures.