As you will have already discovered, understanding your HSA can be key in saving money on health bills for you and your family. However, for those who are unaware of the benefits of having a HSA, they can seem fairly complicated to get your head around - especially as many of the advantages of having an HSA revolve around tax. Even so, it can be well worth taking the time to understand how an HSA plan could benefit you and your family in the long run. If you have only standard healthcare plans in the past, or moved from somewhere like the UK where you may have chosen health plans like Aviva health insurance or other similar policies, then you may already have a basic understanding of how healthcare savings can be of use. However, it is essential to understand the difference in putting money in an HSA, in order to be fully aware of the benefits.

Fortunately, by using sites like HSAEducator.com, it is easier than ever to let friends, family and even colleagues know the facts when it comes to opening a HSA. Directing others to this site is one of the simplest ways of letting other people know the savings which they could be earning, simply by using a Health Savings Account. Think of all the savings which you might have already been able to make - and which others could be making too! It’s time to make sure others are as well informed as you are when it comes to the topic of HSAs.

Even if you’ve never read this blog, it should be no surprise that I have a high deductible health plan.  I am also one of the thriftiest people I know.  My HDHP provides annual physicals for my family so the bulk of our well care is covered.  Pretty much all our other health expenses, I cover at 100%.  But remember, the 100% I cover is paid at the Humana negotiated rate.

Anyway, about the “free” flu shot, last year, on a whim I asked the pharmacy if my insurance plan would cover my shot.  After what appeared to be a 10 minute love affair with the computer, my pharmacist advised me that it was covered at 100%.  I rolled up my sleeve, then wandered down to the cosmetic aisle, and advised my wife of our good fortune, and she rolled up her sleeve.  We then proceeded to go pick up my son from his job, and shared the good news with him, although he did not see it as good news at all and was pretty much pissed at us for the rest of the day.  We called our daughter and told her about her special plans for the afternoon and to saddle on over to the drug store and share in the fun.  She whined and complained and then complied.

At $25 a shot, we saved $100 and avoided the flu.  I haven’t gotten the rest of the family to get their shots yet, but how can they resist?  It’s a total friggin’ no brainer.

So there are a few points to be made here.  First, if you don’t have health insurance, even a modest plan like my HDHP will enable you to purchase medical services at a discount.  Basically you get the negotiated purchasing power of your insurance company, if you shop right you can, through an HDHP get coverage for your well-care (annual physical), and as an added bonus, you might even get your annual flu shots for free!

I haven’t had a tetanus shot in about 15 years….wonder if my plan would cover that.  Hmmmmmm.

If anything, the overall health of my family has improved over the past 3 years since I switched to a high deductible health plan so the premium increase is neither the result of higher utilization of the benefits nor a general decline in health.  And it certainly is not the result of a stratospheric increase in the cost of the care we have received.

Our insurance costs are increasing primarily due to uncertainty created by the chaos of Obamacare (healthcare “reform”).  Insurance companies are in business to make $ for their shareholders and as the government creates a burden for them, they simply pass it right on to their customers.  In this case, that would be me.

Pretend for a moment you were in business for yourself making widgets.  You are a pretty good business person and for every widget you manufacture, you make 20% profit.  You compete in the market with other widget makers and through competition, your prices are held at a reasonable level.  One day the government decides that because your widgets serve the greater good of society, everyone should be able to buy them.  As a business person, this sounds pretty good right?  Because the size of your market just increased exponentially.  But here’s the rub, not everyone can afford your widgets and in some cases they don’t even want them.  Normally, if you had control over your business, you would simply refuse to sell widgets to those who could not pay, but the government has said you must sell widgets to everyone, regardless of their ability to pay.  Well, you are not in business to lose money so, maybe you do some things to enable you to produce your widgets for less money which is a good thing, but you were pretty efficient to begin with.  If you still want to make 20% profit, what do you do now??  You increase the price of widgets to those who can afford them to maintain your profit and offset the losses from sales to widgets to those who can not pay for them to begin with.

In a nutshell, you are Humana, and I just got a 21% premium increase.  Now I have to come up with $635 to cover basically the same benefits I already have.  Suffice it to say, my privates are frosted over this latest insult, but it could be worse.  What if I had a traditional insurance plan and was paying, say $1,000 per month for my insurance and was hit with a 21% increase?  Annualized, I would have to come up with an additional $2,500 just to cover the premium increase.   That’s a pretty big nut in my book.

So looking at your own situation, how big is your nut and what has Obamacare done for you lately?  Is it the panacea we were led to believe it would be?  In the land of purple frogs and leprechauns, perhaps it is.

Two important items to note though.  Make sure you tell your bank when you make the deposit that the contribution is for 2010 or they are lible to mark it as a 2011 contribution.  Second, make sure you get the deposit made before April or you are out of luck.

If you are wondering if the tax deduction is worth it, chances are, it is.  As an “above the line” deduction, you can subtract the amount of your contribution from your gross income thus lowering your taxable base by the amount of the contribution.  And that’s a good thing.  At least it is for you.  

Happy New Year…and happy savings.

Anyway, if you are just stepping into the world of HDHPs, “let me be perfectly clear” when the plan says it covers “well care” that means it covers your physical.  Now insurance companies are kind of squirrely when it comes to what exactly they cover in the physical, but in my case it was pretty much the visit and the prostate extravaganza.  Extra stuff like lab work and ECGs in my case, were not covered.   But here’s the thing, if you were paying for all that stuff out of your pocket without insurance at all you would probably go into shock if you had to pay the entire nut. 

Even if you have a high deductible health plan, you get the benefit of negotiated rates, which can be pretty significant.  If I had been a contestant on the Price is Right, trying to guess what the cost of the physical was and the cost of the lab work, “the actual retail price” of those babies would have been $1284.90.  But after the insurance discount I paid 104.84 out of my pocket.  For my money, peace of mind and general health, a hundred and some change seems reasonable to me.

So why well care?  Because it’s like basic maintenance on your car, which could prevent serious problems later on.  If you have a HDHP, the insurance discount can make the price of it affordable.  And if you have an HSA you can pay for it from your HSA either now, or let your HSA grow and pay yourself back later.

That’s why well care.