Health savings account are becoming more popular, but are one of the most underused financial solutions to high health insurance costs. Here's how using a health savings account can improve your financial situation.
Lower Health Insurance Cost
Because you need to have a qualified high deductible health insurance plan in order to take advantage of a health savings account plan, your health insurance costs are going to be much lower than if you had a plan with all of the bells and whistles. High deductible health plans allow you to pay much less, because you are taking on more medical risk and more of your everyday expenses, instead of the insurance company.
Tax Savings
Once you have a qualified high deductible health plan in place, you are eligible to open up your health savings account, or HSA. After opening your account, you can fund the account, or leave it at the minimum balance. Some people like to leave it at a minimum balance until they actually have medical expenses. Other people like to fund it and build a nest egg directly aimed at covering their medical costs in the event of an emergency. Either way, you can pay for most of your medical, dental, vision expenses, and more tax free, through your HSA.
Control Over Your Own Health Care
Consumer driven health care is becoming more and more accepted as a solution to rising health insurance costs. Using an HSA and a qualified high deductible health plan allows you to lower your monthly health insurance cost. This allows you to save the majority of your premiums if you or your family remain healthy. Luckily that's not the only benefit you get for taking charge of your own health care. Tax savings help make this financial solution even more attractive, and the fact that you can pay for more than just medical expenses makes the deal even sweeter.
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