I’ve just started looking into these medical savings accounts or health savings accounts and was wondering if anybody had any advice or opinions about them? Also what is the difference between the two?
To be honest what first got my attention was the fact that they are tax deductible, always looking for a write off. 🙂
It looks to me like I can put up to $5000 a year into one for the whole family as long as I carry health ins. with a high deductible.($1000-$5000). Or am I mistaken?
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As far as I know the Archer (aka MSA) has been discontinued for new enrollments and has been replaced with the HSA (health savings account).
I have not looked into the details but it appears that the HSA is very similar, if not exactly the same as the Archer as far as the insurance and saving account goes.
The HSA was one of those things that was stuck in the Medicare prescription bill.
The big thing is that they have opened up the elligability of the plans to a much larger group. If I remember correctly anybody is elligable as long as they don't have other insurance as the same time.
Under the Archer it was limited to self-employeed and small businesses. And because of that few companies went to the effort to design the matching health insurance polices. And thus they are (or where) hard to find.
Also 85% of the insurance agents did not know anything about them. 10% would flat out lie to you that they knew what they where so that they could get in the door and sell you what they had. 4% had heard of them, but really did not know what they where. And that left 1% that actually knew what they where doing.
As soon as I heard about the MSA's I started researching and trying to get a policy. But I have a condition, with no symptoms over 10 years, and I could not find a company that would take me, although BC/BS rates me as a good risk.
Hopefully with the new elligability more companies will get into the business and make them more readily available.
I think that the whole concept is great.
For those that don't know what this is you take out high deductable health insurance policey. But it can't just be any high deductable policy. But it has strange min's and max's and they adjust each year for inflation. Mine is higher that what is allowed. There was abolutely no reason to do that. Having a simple high deductable should be OK and then you did not need a "special" policy.
They you are allowed to saving money in a health savings account. This account is much like an IRA account. The money that you put into the account is tax deductable.
The money in the account can be used TAX FREE to pay any medical expenses including things like glass and dental.
The whole idea is that you are incharge of your medical expenses for everyday cost (colds, sprains, etc) and they are tax deductable and you have the medical insurance for major expenses.
And the funds can accumulate in the account so if you do have a real major expense which even the best policies don't cover 100% you have the reserves.
And I have heard Clark Howard, syndicated consumer help radio show, say that doctors love them. When you can in you negotiate a cash price. They pay them on the spot for maybe 40-50% of there "normal" rate. Because that normal rate is usually knocked down to 60% by the insurance plans. Then they bill you for a few bucks co-pay and then you put in the for the insurance and the rest. And then they often have to resubmit that 3 times and rebill you twice. So cash in the hand looks real nice to them.
I have heard Clark talk about it several times and might have something aobut it on his web site. http://www.clarkhoward.com
Thanks for the info.
I have been to Clarks site before and will check it out.
Dave