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Health Care and Health Savings Accounts (HSA)

A hundred years ago, no one thought of buying medical insurance because the cost was manageable. Medical technology was primitive then compared to today’s medicine. Medicine is now one of the largest expenses we face, and there are no signs that it will ever go down. There are no simple solutions to this major problem facing Americans. There is little point in discussing why this has happened or who the culprits are; those issues are best left to the politicians.

Over the past fifty years, insurance has been the solution for both individuals and employers. This is changing. Small employers can no longer afford to operate their business and pay for the cost of all of their employee’s health benefits. Large employers are facing similar problems, and we are seeing a trend of increasing employee contributions. The smallest businesses, many who do not have employees, are people who are really being squeezed. There is little left for them within the insurance marketplace.

In 1997, while serving a president of the Freeland Chamber of Commerce, I put together a plan through Group Health Options that proved to be very successful for the members. The plan became countywide. Since then, the cost of this plan was based on the loss experience of the group. There is little left to the group; the costs have become unaffordable.

Group Health

We continue to encouraging people to belong to Group Health Cooperative. We recommend both individual and small group plans. You can now a wide choice of deductibles so that more self-insurance is utilized. The days of a health provider paying all of the medical expense is no longer feasible. W have tried to place plan with other companies, but have not found either services, coverage, or premiums to be better. The service provided by Group Health is unmatched. On Whidbey Island, we can choose local doctors, surgeons, pharmacists and other medical services without having to go to the mainland. The specialists of the Everett Clinic are also authorized. We have been with Group Health for nine years, and remain pleased with what we get.

Optional dental plans are also available through Group Heath provided by Washington Dental Service.

Health Savings Accounts

The sweeping Medicare Reform Act passed by Congress in December 2003 enabled Health Savings Accounts (HSAs). HSAs provide a convenient way to save — and invest — for current and future medical expense needs with triple tax benefits: HSA contributions, HSA earnings and withdrawals to pay for qualified medical expenses are not subject to federal tat. Funds may accrue over time and remain available to employees and individuals if they change jobs or retire. No other health savings vehicle offers these types of advantages. The savings are accumulated to pay for the cost of medicine that falls under the deductible amount. The money saved cannot be used for other than medical expense. Related dental, over-the-drugs, optical, hearing aids and other medically related expense can be paid out of these funds, but are subject to some conditions. Like an IRS, the funds, if unused, are paid to a beneficiary upon death.

Group Health Cooperative now offers this plan. They call it HealthPays. These HSA plans are a combination of a major medical type of health insurance with annual deductibles ranging from $1,500 to $5,000, and a maximum out-of-pocket of $5,100 per year. The plans are similar to their normal plans relative to what is covered, but prescription drugs are not included. These are paid out of the HSA accounts.

The saving part of the HSA is through Mellon. If you think this is the type of heath care that is right for you, please go to their web site for detailed explanation of how it works - http://www.mellon.com/businesses.html. I understand that these revolutionary accounts trigger many questions. Take some time to review the answers on this site, and watch for continually updated information and resources.

I strongly recommend the Health Savings Accounts. I see no other viable solution for individuals and small businesses. Being uninsured is not an option any longer.