More and more Americans are considering Health Savings Accounts and other avenues to obtain cost-effective health and dental care. According to a census taken by American Health Insurance Plans (AHIP), enrollment in HSA plans has grown 15% on average since 2011. From 2013 to 2014, the number rose from 15.5 million to 17.4 million Americans enrolled in an HSA plan.
To understand why, let’s take a look at HSA’s and their benefits.
A health savings account (HSA) combines high deductible health insurance with a tax-favored savings account. Money in the savings account can help pay the deductible of the insured’s medical expenses. Once the deductible is met, the insurance starts paying. Money left in the savings account earns interest and is the insured’s to keep.
The advantages of utilizing an HSA include its tax-deductible and tax-free qualities: all contributions to the HSA are 100% deductible up to the legal limits, and withdrawals to pay qualified medical expenses, such as dental work or CT scans, are never taxed. In addition, interest earned on the balance of the HSA is tax-deferred, and again, if used to pay for medical expenses, remains tax-free.
Americans’ concerns about high health insurance costs are being answered more often in alternative ways. As more people seek ‘non-traditional’ methods to pay for their health expenses, the market will respond in kind. HSA’s allow people to have more control over their health spending. Other alternatives such as digital health platforms, such as ZendyHealth.com, allow people to save more money than an employer or individual-based health insurance plan if they are spending out-of-pocket cash (ie., for high-deductible plans). Moreover, services that are not traditionally covered by insurance plans but yet can be used with HSA accounts are now available on ZendyHealth. Just know that if you’re not satisfied with your current health plan, there are options out there as there are and will be an increasing number of cost-savings platforms in the coming years.