Discover the HSA Advantages: Unique Product. Unique Service. Unique Savings.
By Bill Robinson, Palm Canyon Insurance Agency

A Health Savings Account (HSA) is a tax-favored account used in conjunction with a qualifying health plan as defined by the IRS. These HSA-compatible plans often have lower premiums, offer preventive care benefits and provide coverage for other health care services after your deductible is met. HSA dollars can be used to pay for qualified medical expenses that apply to your deductible and expenses which may not be covered by the health plan.

HSA-compatible health plans often cover preventive care at 100% before your deductible is met.  Premiums may be substantially lower than other health care plans. HSA-compatible health plans can give you increased control over the services you receive and the dollars spent.

HSA contributions are tax-free or tax-deductible. Interest, investment income and withdrawals are tax-free when used to pay for qualified medical expenses. HSA funds belong to you, and your balance carries forward from year to year. Contributions can come from employers, account-holders or third parties. After the age of 65, you can use the funds for non-qualified expenses and pay only income tax.  Plus your HSA dollars can be invested for even greater earnings potential.

Saving for health care by opening a tax-favored HSA has short- and long-term benefits. Think of your HSA as a drop in a pond. The ripples represent your savings opportunities and increased control over your health care future.

First, you have potential savings in premiums. Next, contributions are made pre-tax or they are tax-deductible. Interest and investment earnings grow tax-free. Finally, withdrawals used to pay for qualified medical expenses are always tax-free.

HSAs encourage you to increase your participation in your own health care and treatment options – put simply, to become a health care consumer. The idea of becoming a health care consumer is new to many of us. Following is a discussion about researching the cost of procedures.

The cost of health care is rising and traditional health plans haven’t slowed the trend. Consumers with HSAs are encouraged to shop for health care. As a result, individuals with HSAs are 50 percent more likely to ask about costs and three times more likely to choose the less expensive treatment option, according to a study by McKinsey & Co. Below are tips about the importance of becoming involved in your health care.

Tip #1: Take advantage of preventive care services. Services such as annual exams and immunizations can help prevent serious illness or injury and more costly treatment. Check with your health plan provider to determine whether preventive services are covered at no cost to you prior to your deductible being met.

Tip #2: Learn about your condition. Whether you ask your doctor or use Internet resources, gain as much knowledge as you can. If you understand your condition, you can work with your doctor to more effectively treat it.

Tip #3: Ask your doctor about alternative treatments. Most conditions have several treatment options varying in cost, effectiveness and risks. If you don’t ask, you won’t have all the information you need to make an informed decision about your care.

Tip #4: Understand the risks associated with each treatment option. All treatments have potential risks or side effects. When you discuss these with your doctor, you are more able to make informed decisions and recognize any side effects you may develop.

Tip #5: Ask about price. When you receive care for non-emergency services, be sure to ask if the service is necessary and what the fee will be. This can help you make better decisions about your care and control out-of-pocket costs.

Tip #6: Use your health plan resources. Many health plans now offer toll-free nurse lines or online information that can help you determine when treatment is necessary.

Tip #7: Commit to the treatment you and your doctor decide is your best course of action. The most important step in being an involved health care consumer is following through with your treatment plan. A study by McKinsey & Co. found that health care consumers with HSAs were 20 percent more likely to comply with treatment regimens. After all, when you invest the time to learn about your condition, research alternative treatment options and identify the risks associated with each option, you are more informed and can be more confident in your treatment approach.

Tip #8: Ask your doctor if he or she, or your clinic or hospital publishes procedure pricing, and who else you should contact about costs. Your doctor most likely doesn’t have access to this information during an appointment, but can provide you with a starting point for getting it.

Tip #9: Use online resources. The push for health care pricing information has resulted in the launch of several Web sites. The Centers for Medicare & Medicaid (CMS) have posted the amount they pay for health care services on their Website, www.cms.hhs.gov.

Tip #10: Consider quality and experience when making your decision. This is your health we’re talking about. Price is not the only factor in shopping for health care. Ask your doctor about his or her experience and the number of cases he or she has handled involving your condition. If your doctor is a part of a clinic or hospital system, ask how much experience the facility has had with patients with your condition. The clinic or hospital system may also be able to provide you with patient quality ratings.

Tip #11: Communicate your research and decision to your doctor with diplomacy. The concept of health care consumerism has not been a part of most doctors’ experiences. To avoid problems in the future, especially if quality and pricing have led you to a different health care provider, communicate your decision in a calm, fact-based manner.

Bill Robinson is a licensed health insurance and employee benefits agent and the owner of Palm Canyon Insurance Agency in Palm Springs. He may be reached at (760) 416-4225 or by e-mail at PalmCanyonIns@aol.com.