Health savings accounts are the fastest growing health insurance option in the country, swelling in number from one million accounts in 2005 to nearly 10 million today.  Their appeal is obvious.  Paired with a high deductible health plan, a Texas HSA allows consumers to save money tax-free for use toward medical expenses, giving consumers greater control over their health care spending and more flexibility to pursue the treatment options they prefer.  But recent legislation may be the death knell for these consumer-friendly health insurance plans.  According to The Heritage Foundation:

On January 1, 2011, insurers will be required to maintain an 80 percent medical loss ratio (MLR) in the individual market.  This means that 80 percent of revenue from premiums must be spent on medical claims, not on administrative costs or profits.  The National Association of Insurance Commissioners recently held a teleconference on the MLR’s impact, as several insurers begin to consider exiting the individual market in certain states where meeting the new MLR requirement would be not be viable…According to Dowling and Partners, an insurance research firm, major players such as Aetna, Assurant, Mega Life, and United Health are likely to bail out of the individual market in at least some states.  As a result, 1 to 2 million Americans could lose their current coverage.

So much for promises.  ObamaCare will so severely restrict health carriers’ operations that many won’t be able to offer individual plans, like HSAs.  In fact, some carriers may fold entirely.  The Heritage Foundation notes that nHealth, a Richmond, Virginia insurance provider specializing in high deductible plans and HSAs, “recently announced it will close its doors due to the combination of stringent new regulations and future uncertainty—both the product of the new health care law…and many other insurers are expected to follow suit due to new regulations created by Obamacare, especially its federally-imposed medical loss ratio.”

So contrary to presidential promises, you can’t always keep the health insurance you like, especially when your favorite provider ceases to exist.

Alternative medicine and therapies, like chiropractic care, acupuncture, reflexology and massage are, at best, considered specialist services by health insurance companies.  This means that if they’re covered at all, they’ll cost more than “traditional” services, like visiting a primary care physician.  But those with a health savings account can use their funds to pay for almost any type of health service, as long as it’s meant to treat or prevent of a specific health condition.

Traditional Texas health insurance plans are great for many consumers, but not everyone has the same health history, needs and beliefs when it comes to medicine.  With traditional plans, consumers interested in alternative therapies are forced to pay more for the health services they want.  And as alternative therapies are becoming more and more mainstream, the amount of people turning to acupuncture or therapeutic massage is increasing.  Given this interest in alternative medicine, it doesn’t make sense for some people to pay for conventional health plans that don’t cover their therapies of choice, especially when HSAs allow for this flexibility.

A Texas health savings account paired with a high deductible health plan is a great way to keep costs down while paying for the health therapies you want.  Rather than paying a health insurance carrier a costly premium each month for coverage that may go unused, you can keep more of your money and only withdraw funds from your Texas HSA when necessary.  A health savings account puts you in the drivers’ seat.  By empowering people to manage their own health care, HSAs encourage personal choice and fiscal responsibility, putting spending control back into the hands of consumers.

Prioritize

Simply identifying the items most important to you is an easy way to trim your Texas health insurance costs.  Do you have a favorite doctor? If so, choose a plan that covers his services so you’re not paying extra to see him. Do you require frequent doctor visits and prescriptions? If yes, then choose a plan with a low deductible and copay, so your out-of-pocket costs are manageable. If you don’t require regular prescriptions or doctor visits, then a plan limited to major medical coverage can be a very affordable Texas health insurance option.

Consider a high deductible health plan and Texas HSA

A deductible is the amount you are expected to pay toward doctor visits, hospital stays, and other medical expenses before your insurance kicks in.  If you’re generally healthy and don’t incur many health care costs, then selecting a high deductible health plan (HDHP) is a great way to save some money.  All you pay each month is a small premium to keep your plan in place, and if something major occurs, your HDHP has you covered.

A Texas HSA is a health savings account that allows you to save money on a tax-free basis, similar to an IRA.  You can use this money toward health care costs and preventative care, and any money left over is rolled over year after year and can accrue interest.  A health savings account puts you in control of your health care spending, and simply being aware of how your money is spent is a great way to cut costs.

Put a health insurance broker to work for you

A qualified health insurance broker can work with you to find an affordable Texas health insurance plan that fits your health care needs and budget.  And best of all, because a broker’s fees are paid by the health insurance carrier, you incur no extra costs by utilizing a broker’s expertise.

A Texas HSA provides individuals and families with a method for saving money tax-free to use for qualified medical expenses.  Similar to an IRA or other investment, there are contribution caps to Texas HSAs.  As of 2010, the contribution limit is $3,050 for individuals and $6,150 for families, but this combination of insurance and investment accumulates year over year into a powerful asset that consumers can put toward doctor visits, prescriptions and preventative care.

To qualify for a Texas health savings account, you simply need to enroll in an approved high-deductible health insurance plan.  As of 2009, the IRS defines a high-deductible health insurance plan as any plan that has a minimum deductible of $1,150 for individuals and $2,300 for families, as well as a maximum out-of-pocket of $5,800 for individuals and $11,600 for families.  So rather than paying a  Texas health insurance company a large premium each month for coverage that may go unused, the consumer keeps more of his money and only dips into his Texas HSA when it’s necessary.  Plus, you, rather than an insurance company, get to choose where your money goes, whether that’s toward a doctor visit, dental or vision care, prescriptions or even alternative therapies, like chiropractic care.

A Texas health savings account has many other advantages besides reducing monthly premiums and expanding consumer choice.  All contributions and earned interest are tax deductible, and money put toward qualified medical expenses is also tax exempt.  Plus, as your Texas HSA grows, unused funds will roll over year after year, so if you stay relatively healthy, an HSA can be a great supplement to other savings accounts.  And once you reach age 65, you can withdraw your funds to be used however you wish, all without a penalty.

Another benefit of a Texas health savings account is its portability.  It goes where you go, regardless of employment status.  You can keep your funds even if you change jobs, lose your job or retire early.  This is true even if your employer was contributing to your HSA, which is in contrast to traditional employer-sponsored plans which end when your job ends.

Whichever Texas health insurance plan you choose, the most important thing is to get coverage and keep coverage.  But to save money and increase personal decision making about your health care, a Texas health savings account is an attractive option.

Health savings accounts were created in 2003 as part of the Medicare Reform Act; they provide individuals and families a way to save money tax-free to pay for qualified medical expenses, like doctor visits, prescriptions and preventative care.  These plans were created in response to the rising cost of health care with the intent to give consumers more control over their health care costs.  In many cases, a Texas HSA can reduce health care spending by 30 to 40 percent or more over the course of one year.

The recently passed—and highly publicized—health care legislation is no guarantee that health care costs will go down.  In fact, most experts believe that costs will actually rise, as the government attempts to extend coverage to millions more people.

In order to combat looming cost increases, consumers may want to consider a high deductible health plan with a low monthly premium.  A high deductible health plan covers major health events, similar to a traditional major medical plan.  If you’re generally healthy and don’t require frequent doctor visits or prescriptions, then all you pay each month is a low premium; yet you have coverage in place to cover a catastrophic accident or major medical emergency.

Having a high deductible health plan in place makes consumers eligible for a Texas HSA.  Pairing these plans together establishes a formidable health plan that puts consumers in control.  When consumers are the key decision makers over how their money is spent, they tend to spend their money more wisely.  In turn, the market reacts by offering more competitive rates for services, which creates better value for individuals.

Unfortunately, new healthcare legislation will enact changes that will water down these helpful health plans.  Starting on January 1, 2011, people with health savings accounts can no longer use their HSA funds to pay for over-the-counter medicines.  Purchasing medications like pain relievers, cold remedies and cough syrup can really add up, especially for large families, but the new law dictates that such expenses must be paid out of pocket.

Another change looming in 2011 is that the penalty for withdrawing money from an HSA for non-medical expenses doubles from 10 percent to 20 percent.  So if one mistakenly spends HSA money on an unapproved item, like over-the-counter medication, for example, he’ll be penalized at double the current rate.

Regardless of these changes, health savings accounts are still a very attractive option to many individuals, especially now that the government has mandated that all people purchase health insurance.  Because of this, there will be many new entrants to the health insurance market, including millions of “young and invincible” consumers who previously chose to go without insurance to save money.  It’s likely that such people will want to keep their costs down and will opt for a high deductible health plan with a low monthly premium.  Choosing a high deductible plan will make more people eligible for HSAs, and therefore increase the amount of people enrolling in health savings accounts.

That could be a good thing for both the individuals and the tax-paying public.  When consumers are the key decision makers over how their money is spent, incentives will be aligned throughout the health care system to create better value.

One option to consider if you’re on a budget and in good health is a high deductible Texas health insurance plan.   With a high deductible health plan (HDHP), you simply pay out-of-pocket for medical expenses until your high deductible has been met. Once you meet your deductible, the plan will cover you for anything catastrophic, similar to a traditional major medical plan.  If you’re generally healthy and don’t require frequent doctor visits or prescriptions, all you pay each month is a low premium, yet you have coverage in place to cover an accident or major medical emergency.

People with HDHPs can also contribute to a Texas health savings account, which is a savings account that allows you to contribute and withdraw money for qualified medical expenses without being taxed. Similar to an IRA, a health savings account is an investment, allowing you to grow your wealth while preparing for future medical expenses.

A common question regarding HDHPs is: “Why should I pay a monthly premium for health care coverage instead of just saving my money to use when health care needs arise?”

Texas health insurance companies generally offer discounted rates for services rendered by their network of health care providers.  So having health insurance—and therefore a network of providers—automatically gives you negotiated rates on health care.  You can typically save between 30 and 60 percent on medical costs and also have the peace of mind to know that it will cover you for catastrophic events, usually up to three to five million dollars, or up to the lifetime limit.

If you are one of the many Americans who wants or needs to save money, does not require frequent doctor visits or prescriptions, and wants coverage in case of a major medical need, a high deductible Texas health insurance plan may be right for you.

By connecting health care services with actual health care costs, health savings accounts are decreasing health care costs. Evidence supporting these claims continues to surface causing many to question why HSAs are not being considered as an option in the Obamacare health plan. Obama’s goal is to provide affordable health insurance to all people, which is something all Americans agree is needed. However, increasing taxes and putting our nation in more debt should not be the price paid in order to make health insurance more affordable and readily available to all citizens.

Also, Obamacare does not address the fundamental problem of rising health care costs. The reason health insurance is not affordable for a majority of Americans is due to the excessive health care costs and the overuse of services. When people do not understand the costs of services (because the health insurance company covers most of the costs), they tend to overuse services unintentionally. With the knowledge of the actual cost per service, the individual can be more responsible with how they use these services. For example, let’s say you go to a restaurant and you do not know the prices of the dishes available. Let’s also say you will only pay a flat fee no matter what you order. You are more likely to order the most expensive meal on the menu, whether you are hungry or not. This analogy can be applied to how flat rate fees per service can lead people to using more than what they actually need when visiting health care providers.

The Cato Institute’s Michael Tanner writes that for every health care dollar spent in the United States, just 13 cents is paid by the consumer. If a co-pay is all that is required for health care services (whether the full costs are covered by your health insurance or the government), the rest of the service fees must be paid by someone. If the health insurance companies and the government continue to incur the majority of the costs, then health insurance premiums will continue to rise to compensate for increasing health care costs and usage. If the government incurs the majority of the costs, then taxes will continue to rise to account for these increases. Therefore, allowing every American access to standardized health insurance will definitely not decrease health care costs. Instead, it will actually decrease health care quality, increase health care costs, and increase taxes!

Instead, the root of the problem should be treated first. Increasing customer responsibility by connecting health care cost with service will allow people to begin to use the services that are only needed, not expected. Once health care services are better understood and maintained, the costs of health insurance will decrease. Once health insurance premiums decrease, more Americans will be able to afford quality health insurance. It is not a quick fix, but it is a better option than our country continuing to plummet into financial ruin.

Evidence of this concept working has been reported in states such as Indiana. In a recent article by Indiana governor Mitch Daniels for the Wall Street Journal, 70% of the state’s 30,000 employees use the HSA option available to them. The state deposits $2,750 a year into an account controlled by the employee, who uses it to pay health care costs. The state of Indiana also pays the premium for the high deductible HSA-eligible health insurance plan. Money left over each year belongs to the employee. A study conducted on these employees’ use of health care services show that they do not skip needed services, such as routine physicals and mammograms. Daniels claims this program will save the state about $20 million this year.

Before we endorse a health care reform bill that could cost us billions of dollars without addressing the real health care problem, we should look at what IS working to decrease health care costs and aid Americans in getting the health care services they need.

It’s important to note that an HSA cannot be combined with just any high deductible health insurance plan. The IRS has set specific guidelines to determine if a high deductible plan is HSA-eligible. Because of these guidelines and the variations of state underwriting requirements, it’s helpful to contact a Texas health insurance broker to guide you through the process.

This is definitely not your traditional health insurance plan.  Individuals accustomed to HMO or PPO plans, with set co-pays and select health care providers, might find a health savings account to be a refreshing change.  With an HSA, consumers are accountable for their own health care spending and are empowered to make the decisions best suited to their health and budget.  Saving some money while taking back control of our own health care is something we could all use more of these days.

HSAs were made available through the Medicare Prescription Drug, Improvement, and Modernization Act of 2003.  These tax-free savings accounts allow consumers to save and then apply money toward qualified medical and health expenses not covered by their health insurance deductible.

Anyone with a high deductible health insurance plan is eligible to open a health savings account in Texas.  Though one account holder is needed for initial setup, the HSA funds can be used for any family member covered under the high deductible insurance plan. The HSA tax deduction is equal to the amount of money that is deposited into your Texas health savings account, and the U.S. Treasury allows individuals to contribute money to their HSA accounts even if deductions are not itemized.

According to the Internal Revenue Service, the annual contribution limit on deductions for health savings accounts in 2010 is $3,050 per calendar year for an eligible individual with self-only coverage. The limit is $6,150 for family coverage. A high deductible health plan is defined as having an annual deductible of at least $1,200 for self-only coverage or $2,400 for family coverage, and annual out-of-pocket expenses (e.g., deductibles, co-payments, etc.) up to $5,950 for self-only coverage or $11,900 for family coverage.

According to Blue Cross Blue Shield of Texas, HSA insurance plan members spent eight percent less than traditional insurance clients.  Because HSA insurance plans are consumer-directed and managed, the individuals who subscribe to these plans are in control of how their money is spent.  Consumers with HSAs tend to take a more active role in their health care, since the money they’re saving and spending is their own.  Maximizing value can be achieved in health care only if the system is restructured to make the consumer the key decision maker.