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Michigan Health Savings Account (HSA)

In 2003, President George Bush signed into law a bill that introduced Health Savings Accounts for this country. This was incorporated within the Medicare bill. Our leaders had high hopes that HSA’s were going to replace medical savings accounts (MSA’s).

In Michigan, we have over ten health insurance companies fighting for your business. So it is always recommended to talk to an independent health insurance broker. Only then can you be assured that you will be getting the most competitive priced product.

So what is a health savings account, also known as a HSA? A HSA is a tax-advantaged medical savings account available to taxpayers in the United States who are enrolled in a High Deductible Health Plan (HDHP). HSA’s enable you to pay for current health expenses and save for future qualified medical and retiree health expenses on a tax-free basis.

As stated, you must be covered by a high deductible health insurance plan (HDHP) to take full tax advantage of an HSA. Now in most cases, a HDHP can be less in price than a co-pay insurance plan. Most consumers at that point take their savings, and put it in the health savings account.

The funds you put into your health savings account are strictly controlled by you. You can decide on what type of investments you would like to make, with no concerns on what the health insurance company thinks or feels. Again, 100% control by you.

Consumers are sometimes confused about the health savings account. The HSA costs you nothing. Again, it is an opportunity you have when you combine it again with a high deductible health plan.

As stated, you must have a high deductible health insurance plan to qualify for an HSA. HDHP’s are also known sometimes as catastrophic health insurance plans. These types of michigan health insurance plans usually require you to pay a high deductible, but than cover you one hundred percent after that deductible is met.

So it truly comes down to personal preference when it comes to desiring a health savings account. You pay network prices instead of co-pays, so that is usually sticking point with most consumers. However, after you deductible is met, everything (including doctor visits and RX) is paid for 100%. So with a co-pay plan you still have co-pays to pay after your deductible, while no charges occur with an HSA after the deductible is met.
The last point I would like to make is with a HSA, you have one deductible no matter how many family members. With a Michigan co-pay plan, you are usually looking at 2-3 deductibles if you are insured under a family plan.

Debate will always be high around this type of health insurance as experts question consumers satisfaction with them. However for any consumer who wants more control over their health insurance needs and cost, a health savings account is the way to go.

Randy Palmer specializes in health insurance in Michigan.

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