Maximize Your Health Care Dollars with a Health Savings Account

In my acupuncture practice, about half of my patients are paying for their entire treatment costs out-of-pocket. Some do not have acupuncture as a covered benefit, while others do have coverage, but it won’t kick in until after they’ve met their deductible, which can be anywhere from $250 to upwards of $6,000 or more per individual. Just recently, I had a patient with a $12,500 annual deductible. She lamented, “Then what am I paying the insurance company every month for?” I didn’t have a short answer for that, but I did offer her a suggestion: Establish a health savings account (HSA) to get some tax savings on her health expenses.

HSAs are set up a bit like 401(k)s or IRAs, in that you can make tax-deductible deposits each year up to a certain limit ($3,350/individual for 2015). You can access the funds at any time to pay for health expenses such as physician office visits, acupuncture treatments, lab tests, and medications. You don’t need pre-authorization from an insurance company — the money is yours, after all. Any money leftover at the end of the year is rolled over and can be spent in future years without penalty. And just like other retirement accounts, you have the option of letting your unspent HSA money just sit and accrue interest, or you can invest it in the stock market. Either way, your money grows tax-free.

Most banks can help you set up your HSA. The only requirement is that you be enrolled in a high deductible health plan (HDHP) when you open the HSA and make deposits. Check with your plan to see if it is HSA-compatible; usually, if your individual deductible is over $1,300 there’s a fair chance that it does. (At some point in the future, should you switch to a different health plan that isn’t HDHP, you can still continue to use the funds in your HSA, but you won’t be allowed to add money to it.)

Health care is expensive, and will only get more so as we age. We can’t always rely on health plans to cover the procedures or services we need or want. Start saving your money now with an HSA. There’s still time to set one up and reap the tax savings next April!

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