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Health Savings Accounts: Affordable, Great Coverage, Future Savings
THE AMERICAN The Singapore Model By Rowan Callick Tuesday, May 27, 2008 The city-state of Singapore may have a fix for America’s healthcare woes. Full article Rowan Callick The American Excerpts: Americans have grown used to buying every kind of product from overseas. So why not “buy” foreign ideas or social institutions? Why, for instance, hasn’t the United States adopted the same healthcare system as Europe, Canada, and nearly all the rest of the developed world?
Singaporeans are considerably healthier than Americans, yet pay, per person, about one-fifth of what Americans pay for their healthcare. A major reason is that Singapore’s system does not focus on the question that seems to preoccupy both Europe and America: who pays? Ultimately, whoever signs the checks, the money comes out of the pockets of individuals. Singapore takes a different tack. CATO INSTITUTE Congress Messing with Your HSA by Michael F. Cannon Full article Cato Institute Excerpts:
Never mind the presidential race. The battle over who will control your health care is already taking place, under the radar, in Congress. In April, House Democrats passed legislation that would impose onerous and unnecessary reporting requirements on people with tax-free health savings accounts. As of January, more than 6 million Americans have HSA coverage. That includes nearly 640,000 Californians, or about 3 percent of all Californians under age 65. In some states, HSA plans cover nearly one in 10 people under 65. Current law requires HSA holders to document their withdrawals in the event of an IRS audit. The new legislation would require every HSA holder to document every HSA withdrawal, every time they file their taxes. That's right: Congressional Democrats have found a way to make Americans' medical bills and tax returns even more complicated. ### See Republican Senator Jim DeMint of South Carolina on the floor of the Senate. Health Savings Accounts, were passed under the Medicare Modernization Act of 2003. HSAs have two major features 1. A high deductible-usually $1000 to $2500 for a single person; $2000 to $5000 for a family plan 2. A savings account to pay for smaller expenses. So, let's examine the single plan Because the higher deductible-$1000, does not kick in until reaching that amount, premiums are considerably lower, and the money put into the savings account is tax free. There are many plans where the premium is less than $100 a month. The savings account takes care of small expenses, and any unused portion, can be rolled over toward the following year's expenses. So Let's say you paid $100 a month, in premiums, for 12 months. During the year you had several qualifying medical small expenses totalling $300. That $300 would be taken from your savings account, leaving you $900 at the end of the year. Since you had not reached the amount where your deductible kicked in, $1000, all the expenses were paid by your savings account. Had your expenses been $1100, the savings account would have paid the first $1000. The amount over $1000 would be paid by the policy holder minus a small copay if your policy calls for a copay. So, going back to the example in which you had just $300 in expenses, your Savings Account would start the following year with that $900.00 in it. Each premium payment in the new year would add to your total, giving you a higher amount to use, if needed for small expenses. If at any time you had huge expenses, your $1000 deductible would kick in, so that you would be responsible only for the small portion which is your copay. The Savings Account can be paid by the individual or his employer (or both), up to a limit that does not exceed the amount of the deductible for the high-deductible policy. These contributions are tax-deductible even if you do not itemize your deductions on your tax return. Many companies are switching over to HSA's. The savings are substantial, while the employees for the most part, are happy with the coverage and the features. One of those features could almost be called spectacular. The money in the Savings Account can grow, tax free, toward retirement, similar to an IRA. If you withdraw from an HSA for non-medical uses upon retirement, you then pay taxes. Even there however, every taxpayer can earn $9000 a year, based on 2005 figures, before owing any federal income taxes. In the case of those 65 and older, in 2006, if your total income will be $10,000 or less, including withdrawals from your HSA, you would still owe no tax on the HSA withdrawal even if it is not for medical expenses. You simply do not have enough income to owe any tax. The account is also portable, it can be moved if the individual changes employers. Obviously Health Savings Accounts are not for those who have full coverage paid for by an employer, but for many who must pay their own way, Health Savings Accounts are a life saver.
Health Savings Accounts To OPM.GOV
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