Posts Tagged ‘Medical Expenses’
Learn How Managing Health Savings Accounts Can Save You Money
vings Accounts consist of two parts – the HSA bank account, and the high deductible health plan (HDHP). By carefully choosing which bank you use to establish your HSA, and strategically choosing how to fund your account and manage your investment, you will be able to get the most return on your money while keeping your expenses to a minimum.
Make Sure to Establish Your Health Savings Account
By switching from a conventional copay health insurance plan to a high-deductible health insurance plan (HDHP), most people are cutting their health insurance costs by about 40% or so. This is such a big savings, that many people neglect to take the next step and set up their HSA. But this is a financial mistake that is costing them money.
Unless you pay no income tax and have zero medical expenses (including dental, over-the-counter medications, or charges for alternative care like chiropractic or acupuncture), you will absolutely save money by establishing your HSA.
Run All Your Medical Expenses Through Your HSA
Not everyone feels like they have “extra” money that they afford to set aside in their HSA, despite the tax savings and other financial benefits. Even if that’s the case, you should still establish your HSA. Every time you incur a medical expense, deposit at least as much money as you spent on that medical expense. For instance, if you went to the dentist and it cost $85, put $85 in your HSA. If you like you can then take it right back out.
What this does is convert this medical expense into a tax-deductible expense. Then when you file your taxes next year, you can put the total amount that you ran through your Health Savings Account on line 25 of your 1040, and deduct it from the total income you report.
Cover Your Deductible
Your next step is to get enough money in your HSA to cover your deductible. For 2008, deductibles start at $1,100 and go up to $5,600 for individuals, and $2,200 to $11,200 for families. Annual contribution limits are $2900 for individuals, and $5800 for families. So it could take a few years to save enough money in your account to cover your deductible.
Once this money is in your HSA, you will have the confidence of knowing that you can cover most any medical expense that comes your way, particularly if you have a health insurance plan that pays 100% after your deductible.
As you continue to build money in your account, you may want to consider switching to a health insurance plan with an even higher deductible, which will further lower your premiums.
Minimize the Fees You Pay
If you will be using your HSA to pay medical expenses as you incur them, you should keep an eye on the fees your bank charges. Until you have enough money in your account to cover any fees with investment returns, you probably want to have your HSA with a bank that charges no fees. (Several are listed on the website referenced above).
If you plan to access money from your Health Savings Account to pay ongoing medical expenses, you may wish to keep a portion of your Health Savings Account money in a short-term CD or savings account. But to take maximum advantage of your Health Savings Account, you’ll want to eventually move some of the funds to investments that have a higher potential return.
Investment Options
No other investment has the triple tax-advantage that Health Savings Accounts offer. Not only is your deposit tax deductible, and your withdrawals to cover medical expenses tax-free, but your investment also grows tax-deferred.
Taking advantage of tax-deferred growth is one of the best ways to build long-term savings. Some banks will provide a short list of mutual funds you can invest in, while others provide access to an online discount brokerage such as Ameritrade where you can choose from stocks, bonds, mutual funds, and more.
The most aggressive strategy is to pay your medical expenses from somewhere other than your HSA, and save the receipt. You can then reimburse yourself at a later date. The additional growth you get from not paying any taxes on your investment may be enough to cover all your medical expenses.
By: Wiley Long
About the Author:
Make Sure to Establish Your Health Savings Account
By switching from a conventional copay health insurance plan to a high-deductible health insurance plan (HDHP), most people are cutting their health insurance costs by about 40% or so. This is such a big savings, that many people neglect to take the next step and set up their HSA. But this is a financial mistake that is costing them money.
Unless you pay no income tax and have zero medical expenses (including dental, over-the-counter medications, or charges for alternative care like chiropractic or acupuncture), you will absolutely save money by establishing your HSA.
Run All Your Medical Expenses Through Your HSA
Not everyone feels like they have “extra” money that they afford to set aside in their HSA, despite the tax savings and other financial benefits. Even if that’s the case, you should still establish your HSA. Every time you incur a medical expense, deposit at least as much money as you spent on that medical expense. For instance, if you went to the dentist and it cost $85, put $85 in your HSA. If you like you can then take it right back out.
What this does is convert this medical expense into a tax-deductible expense. Then when you file your taxes next year, you can put the total amount that you ran through your Health Savings Account on line 25 of your 1040, and deduct it from the total income you report.
Cover Your Deductible
Your next step is to get enough money in your HSA to cover your deductible. For 2008, deductibles start at $1,100 and go up to $5,600 for individuals, and $2,200 to $11,200 for families. Annual contribution limits are $2900 for individuals, and $5800 for families. So it could take a few years to save enough money in your account to cover your deductible.
Once this money is in your HSA, you will have the confidence of knowing that you can cover most any medical expense that comes your way, particularly if you have a health insurance plan that pays 100% after your deductible.
As you continue to build money in your account, you may want to consider switching to a health insurance plan with an even higher deductible, which will further lower your premiums.
Minimize the Fees You Pay
If you will be using your HSA to pay medical expenses as you incur them, you should keep an eye on the fees your bank charges. Until you have enough money in your account to cover any fees with investment returns, you probably want to have your HSA with a bank that charges no fees. (Several are listed on the website referenced above).
If you plan to access money from your Health Savings Account to pay ongoing medical expenses, you may wish to keep a portion of your Health Savings Account money in a short-term CD or savings account. But to take maximum advantage of your Health Savings Account, you’ll want to eventually move some of the funds to investments that have a higher potential return.
Investment Options
No other investment has the triple tax-advantage that Health Savings Accounts offer. Not only is your deposit tax deductible, and your withdrawals to cover medical expenses tax-free, but your investment also grows tax-deferred.
Taking advantage of tax-deferred growth is one of the best ways to build long-term savings. Some banks will provide a short list of mutual funds you can invest in, while others provide access to an online discount brokerage such as Ameritrade where you can choose from stocks, bonds, mutual funds, and more.
The most aggressive strategy is to pay your medical expenses from somewhere other than your HSA, and save the receipt. You can then reimburse yourself at a later date. The additional growth you get from not paying any taxes on your investment may be enough to cover all your medical expenses.
By: Wiley Long
About the Author:
By Wiley Long – President, HSA for America ( http://www.health–savings–accounts.com ) – The nation’s leading independent agency specializing in individual and family health insurance coverage that works with Health Savings Accounts.
How to Use a Medical Bill Negotiator to Lower Your Health Savings Account Expenses
ndated with medical expenses isn’t anyone’s idea of fun, but many must live through it anyway. One of the biggest problems associated with this problem has nothing to do with the amount of times you visit the doctor, but the amount charged by the hospitals you visit.
Finding the prices at various hospitals can seem impossible and would take some calling and probing around to get list prices or ranges of actual rates. In fact, if you are able to get a “price sheet” from the insurance company, the prices you will see will be rarely paid by any of their visitors. That is because large companies, PPO networks, and Health Maintenance Organizations all negotiate special discounts for their members and employees.
By using medical bill negotiation services (special rates are sometimes available with some Health Savings Account providers), individuals can keep their medical bills smaller and Health Savings Accounts larger. With this type of service, you can get the same discounted prices the above entities receive or better, with no up-front costs. This could end up lowering your medical exposure by hundreds or even thousands of dollars.
Many may wonder how they can tell whether or not they are getting a good deal or not, especially if they are paying for a high deductible health plan. Even if you have a PPO or other insurance provider that offers lower medical expenses, you don’t necessarily have the guarantee of getting the lowest rates. A good bill negotiation service will have an indepth understanding of the costs, and lowest available prices in a geographic area.
Getting a Good Deal on Health Care
There are many ways to lower your annual medical cost. The first way is to simply be a good consumer. Just like with any other purchase, it is important to shop around for the best value, and don’t be afraid to bargain. Individuals don’t typically have the negotiating power to talk down medical expenses with a health care provider, which is why it important to use a service that can do this.
Millions of people are now choosing Health Savings Accounts in combination with a high deductible health plan as the best way to insure themselves. These plans are much less expensive than copay plans, and offer a tax deduction for any money you put aside to cover future medical expenses. But they do have high deductibles, so you still want to pay as little as possible before your insurance coverage kicks in.
The Medical Bill Negotiator
With a medical bill negotiator you can easily try to lower your medical bills. Most companies will require that you have a minimum of $200 in the bill you need reduced. You can sometimes use the website of the negotiating company to submit your claim or you can mail or fax it in. Once the negotiator receives it, they will be able to compare the prices for the same services at different health providers in the geographical area. If there are lower prices, the negotiator will contact the health provider of the claim and attempt to negotiate a lower rate. If successful, the individual will split the savings (usually around 70% for the individual and the rest for the company). If the negotiation wasn’t successful, the individual doesn’t have to pay a penny.
Individuals are saving anywhere from 5 to 80% by using a medical bill negotiating services. Bill negotiation services report savings of 20-37% for imaging and radiology, 15 – 33% for anesthesia, 10 – 80% at surgery centers, and 5 – 48% on dialysis. Patient advocates are available with most companies to assist you and discuss the medical claims you have.
Saving Money is the Main Goal
In this time of rising gas prices and a falling stock market, keeping more money in your Health Savings Account is an everyday hassle. Anything that can help individuals save money is something that should be looked into. This can be even more achievable by using a medical bill negotiator along with your Health Savings Account.
One shouldn’t have to pay retail prices for prescriptions drugs or lab tests – it is always wise to do comparison-shopping. An HSA-qualified health insurance plan can allow individuals to save money in their Health Savings Account to pay for medical expenses. Individuals can also save money on medical expenses by having an insurance agent available to help them shop for the best and most affordable coverage each and every year.
Taking responsibility of medical expenses is what every American must do; and by using these types of services, more money can be saved each year.
By: Wiley Long
About the Author:
Finding the prices at various hospitals can seem impossible and would take some calling and probing around to get list prices or ranges of actual rates. In fact, if you are able to get a “price sheet” from the insurance company, the prices you will see will be rarely paid by any of their visitors. That is because large companies, PPO networks, and Health Maintenance Organizations all negotiate special discounts for their members and employees.
By using medical bill negotiation services (special rates are sometimes available with some Health Savings Account providers), individuals can keep their medical bills smaller and Health Savings Accounts larger. With this type of service, you can get the same discounted prices the above entities receive or better, with no up-front costs. This could end up lowering your medical exposure by hundreds or even thousands of dollars.
Many may wonder how they can tell whether or not they are getting a good deal or not, especially if they are paying for a high deductible health plan. Even if you have a PPO or other insurance provider that offers lower medical expenses, you don’t necessarily have the guarantee of getting the lowest rates. A good bill negotiation service will have an indepth understanding of the costs, and lowest available prices in a geographic area.
Getting a Good Deal on Health Care
There are many ways to lower your annual medical cost. The first way is to simply be a good consumer. Just like with any other purchase, it is important to shop around for the best value, and don’t be afraid to bargain. Individuals don’t typically have the negotiating power to talk down medical expenses with a health care provider, which is why it important to use a service that can do this.
Millions of people are now choosing Health Savings Accounts in combination with a high deductible health plan as the best way to insure themselves. These plans are much less expensive than copay plans, and offer a tax deduction for any money you put aside to cover future medical expenses. But they do have high deductibles, so you still want to pay as little as possible before your insurance coverage kicks in.
The Medical Bill Negotiator
With a medical bill negotiator you can easily try to lower your medical bills. Most companies will require that you have a minimum of $200 in the bill you need reduced. You can sometimes use the website of the negotiating company to submit your claim or you can mail or fax it in. Once the negotiator receives it, they will be able to compare the prices for the same services at different health providers in the geographical area. If there are lower prices, the negotiator will contact the health provider of the claim and attempt to negotiate a lower rate. If successful, the individual will split the savings (usually around 70% for the individual and the rest for the company). If the negotiation wasn’t successful, the individual doesn’t have to pay a penny.
Individuals are saving anywhere from 5 to 80% by using a medical bill negotiating services. Bill negotiation services report savings of 20-37% for imaging and radiology, 15 – 33% for anesthesia, 10 – 80% at surgery centers, and 5 – 48% on dialysis. Patient advocates are available with most companies to assist you and discuss the medical claims you have.
Saving Money is the Main Goal
In this time of rising gas prices and a falling stock market, keeping more money in your Health Savings Account is an everyday hassle. Anything that can help individuals save money is something that should be looked into. This can be even more achievable by using a medical bill negotiator along with your Health Savings Account.
One shouldn’t have to pay retail prices for prescriptions drugs or lab tests – it is always wise to do comparison-shopping. An HSA-qualified health insurance plan can allow individuals to save money in their Health Savings Account to pay for medical expenses. Individuals can also save money on medical expenses by having an insurance agent available to help them shop for the best and most affordable coverage each and every year.
Taking responsibility of medical expenses is what every American must do; and by using these types of services, more money can be saved each year.
By: Wiley Long
About the Author:
By Wiley Long – President, HSA for America ( http://www.health–savings–accounts.com ) – The nation’s leading independent health insurance agency specializing in plans that work with Health Savings Accounts.