Brendan H, on 17 August 2012 - 08:25 AM, said:
I also wanted to mention that, from what I understand, the Health Savings Accounts that you mentioned briefly only help the wealthy and insurance companies. They're (mis)used as tax shelters by the rich, and they also benefit insurance companies by lowering their costs, since HSA 's are used to pay high out of pocket costs. They don't benefit lower income people because they cost a lot to pay in before you see any benefit. So it's really just another scam in the guise of offering help to lower healthcare costs.
Your understanding is incorrect. HSAs, in conjunction with High Deductible Health Plans, can be a good option for people who are generally healthy but want to be covered in the event of a catastrophic accident or illness.
I'm pretty far from "rich", but I am single and self-employed and thankfully have few health issues. Obtaining individual coverage would therefore be prohibitively expensive and my premiums would evaporate into the æther every month. Having an HSA/HDHP allows me to:
1. Pay premiums that are 2-3x less than I would with traditional coverage.
2. Pay up to $3,100 into my HSA each year pre-tax, allowing me to reduce my overall tax burden by a small amount.
3. Roll over every penny in my HSA from year to year (unlike a Flexible Spending Account, where your money disappears if you don't spend it.)
Yes, I pay out of pocket for incidental medical expenses but, as mentioned above, I am generally healthy. Should disaster occur, I am on the hook for the first $2,000, and everything after that is theoretically covered by my insurer. Theoretically.
The maximum yearly contribution for a married couple is $6,250 (or $7,250 if they're over 55.) To the rich, the amount saved on taxes by taking $7,250 off the top is a laughably small fraction of their income
. There are far more effective tax shelters for them to exploit.