A Publication of WTVP

Most people take health insurance for granted. Some people can’t aspire to fully-insured status because of the cost and a large group of people cannot even purchase coverage because of pre-existing conditions.

Everyone in this country is faced with one of these problems. Those who consider insurance a right of their employment, find employers are cutting back on coverage, increasing premium payments or discontinuing benefits. People without coverage are gambling with their lives because they cannot afford healthcare and could be missing out on medical treatment. Those who are eligible and accepted into the Illinois Comprehensive Health Insurance Plan, find the costs prohibitive—so high that they choose not to use the coverage. With 47 million people uninsured in this country, we are, undoubtedly, going to hear more about healthcare solutions from candidates in the upcoming Presidential campaign.

If introduced, I think that any type of universal healthcare plan will carry a preventive component. Some large companies are even offering lower premiums for their insurance if the participants take part in a wellness program. For those people who do not have the advantage of a group policy, they can save money with a High Deductible Health Plan that includes a Health Savings Account (HSA). An HSA is an interest-earning savings account which is owned by an individual and established to receive tax-deductible contributions which may be accumulated over the years or distributed on a tax-free basis to pay for qualified medical expenses. Premiums decrease the higher the deductible.

Here is how an HSA works: When your insurance company processes a health claim, you get an explanation of benefits including any expenses that were applied to your deductible or not covered under your health plan. You can use the checks or the debit card provided by your HSA provider to make a withdrawal from the funds you have deposited and pay for expenses not covered under your policy. To be eligible for an HSA, an individual must be covered by a qualified, High Deductible Health Plan, not enrolled in Medicare and not claimed as a dependent on someone’s tax return. Withdrawals are tax-free if they are used to pay for qualified medical expenses as defined by IRS Code Section 213(d)—a description is listed in the IRS Publication 502. The annual maximum contribution for eligible persons is $2850 for an individual with self-coverage and $5650 for family coverage. The Tax Relief and Health Care Act of 2006 contained additional changes for 2007. Check with an agent for other advantages now available. tpw