What are the drawbacks of having an HSA in ones portfolio?
[FONT=ARIAL, HELVETICA, SANS-SERIF][/FONT][FONT=Georgia, Times New Roman, Times, serif][FONT=Arial, Helvetica, sans-serif]Uninsured Numbers Said To Be Up, Another Reason For HSAs
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[FONT=Georgia, Times New Roman, Times, serif]The latest figures from the Department of Labor indicate the number of uninsured individuals is growing. Critics say HSAs are part of the answer to this trend but others claim the results are deceiving. [/FONT]
[FONT=Georgia, Times New Roman, Times, serif]However, in the discussions about the “rising” rate of uninsured Americans, it is interesting that none of the major media outlets discussed Health Savings Accounts (HSAs) and their impact on various groups supposedly at risk. [/FONT]
[FONT=Georgia, Times New Roman, Times, serif]Designed to help uninsured Americans get the type of healthcare safety net most individuals in this category say they want, HSAs are conspicuously absent from the torrent of stories unleashed by the latest Census Department figures.
Health Savings Accounts (sometimes called medical IRAs) enable individuals to put aside pre-tax dollars for medical needs today and, for retirement, while being insured with relatively inexpensive high deductible healthcare insurance.
HSAs were enacted late last year as a means of helping small businesses and individuals better manage their healthcare costs by combining tax-benefits with Consumer Directed Healthcare Programs. That they are seen as a possible answer is shown by the rapid adoption going on in those states that have authorized insurance companies to offer them. [/FONT]
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Surveys Show Interest, Adoption[/FONT]
[FONT=Georgia, Times New Roman, Times, serif]Small businesses, in HSAfinder’s surveys, are turning to HSAs in growing numbers. One out of ten in our latest surveys said they would have HSAs in place by the end of 2005.[/FONT]
[FONT=Georgia, Times New Roman, Times, serif]Large corporations are also rushing to embrace HSAs, for instance it is reported that Aetna, Zale’s, Frank’s Nursery and Crafts, Whole Foods Market, Northrup Grumman, Quest Diagnostics, American Standard, and Staples have embraced HSAs. [/FONT]
[FONT=Georgia, Times New Roman, Times, serif]To be sure, this is not a big spike in the uninsured population, with just 15.6% versus just 15.2 % in 2002. But people are worried about these uninsured individuals.[/FONT]
[FONT=Georgia, Times New Roman, Times, serif]HSAs are especially attractive for young people, the group supposedly most “hammered” in the recent run-up, according to John F. Holahan, a health economist at the Urban Institute, a nonprofit research center in Washington was quoted in the New York Times. His analysis indicates that 10 million of those uninsured reported by the Census were young people, 25-to 34-years-old.[/FONT]
[FONT=Georgia, Times New Roman, Times, serif]Yet, these are very people who would benefit well from HSAs.
As former Senator Dave Durenberger says in the forward to my book, “the younger, healthier sector of the population will take advantage of HSAs.”[/FONT]
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HSAs are not just for the young[/FONT]
[FONT=Georgia, Times New Roman, Times, serif]In projections, done with the aid of Houston Economist, Dr. Kenneth E. Lehrer, estimated that more than 20 million HSA accounts will be in effect by the end of 2006. [/FONT]
[FONT=Georgia, Times New Roman, Times, serif]HSAs are also a viable alternative for individuals with lower salary expectations. In Texas, with one of the highest uninsured rates, an individual HSA policy begins at $88 a month.[/FONT]
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Some Drawbacks Cited[/FONT]
[FONT=Georgia, Times New Roman, Times, serif]The drawbacks to HSAs, critics say, include the fact that high deductible insurance, beginning at $1,000 required the individual to pay all of these costs up front. Yet, figures indicate that 82% of Americans never reach $1,000 in deductibles each year. [/FONT]
[FONT=Georgia, Times New Roman, Times, serif]This critique also brings in play the fear by health economists that the chronically sick would be left out of a CDHC program such as HSAs.[/FONT]
[FONT=Georgia, Times New Roman, Times, serif]In October, federal employees will get their first chance to opt for HSAs as a healthcare insurance option.[/FONT]
[FONT=Georgia, Times New Roman, Times, serif]Across the nation legislators such as New Hampshire’s Fran Wendelboe are also pushing for HSA options for state employees.[/FONT]
[FONT=Georgia, Times New Roman, Times, serif]HSAs aren’t the total cure but they are certainly in the equation and should be talked about in any discussion. The fact that they weren’t in any of the mainstream media we monitored makes us a little concerned.[/FONT]
[FONT=Georgia, Times New Roman, Times, serif]HSAs should be highlighted as a viable and positive alternative in any mainstream media discussion. [/FONT]