Funding
your HSA can reduce your taxes now, and allow you to build a tax-favored savings
account that can provide choices and opportunity when you find yourself needing
medical care – particularly if the health insurance program you are
under at the time has a different idea than you do about what kind of care
you should receive.
Why
Funding Your HSA Now is More Critical Than Ever
First
of all – a major confession. I totally forgot to fund my HSA in
2008. Don’t ask how this happened, because I honestly don’t
have a good explanation. But I can tell you this – it cost me
money this year, and in future years. The maximum contribution for 2008
for a family was $5800. Not putting that money into my HSA cost me close
to $2000 in extra federal and state income taxes that I otherwise would not
have had to pay. Even more painful is the knowledge that at a moderate
8% growth rate, that money would have been worth over $25,000 by the time
I turned 65. Ouch!.
Hopefully,
no one reading this is making the same mistake. Health Savings Accounts
provide a special triple-tax advantage: you get an immediate tax
deduction; you earn tax-deferred growth; and if you use the money
to cover a medical expense you get tax-free withdrawals. For
these reasons, you should fund your HSA first, before putting money
into a SEP, Roth, IRA, or other savings vehicle.
Why
Funding Your HSA Now is More Critical Than Ever
The
U.S. debt is now nearly 12 trillion dollars. This is an almost inconceivable
amount of money. But let’s say you and 100 of your best friends
got to go on a spending spree, each of you spending $1 million per day.
How long would it take your group to spend this much money? Over 300
years (hopefully you can spend some of it on some high-tech longevity treatments…).
No
one can continue to borrow greater amounts of money for unlimited time.
At some point, the money will need to be paid back. And what that means,
for most of us, is higher taxes. (I myself would vote for less government
spending, but that doesn’t seem to be in the plans any time soon).
The
other uncertainty facing us is the future of healthcare funding and delivery.
Will you still be able to carry an HSA plan through a private insurance company,
or will you be covered with everyone else by a single-payer government-run
program? We are certainly pushing hard to keep HSAs and consumer-driven
options as part of the solution, but there are many out there who don’t
want HSAs to be part of the picture. In fact, none of the leading proposals
currently include HSA plans.
So
put away as much money as possible while you can. This will give you
the money to control your own healthcare, should the time come when a government
(or insurance company) bureaucrat decides that you do not qualify for a treatment
because you are too old or the odds of success are too low.
HSA for America Additional Benefit: Let Retailers Where You Shop Help You Fund Your HSA
In
order to help make funding your HSA even easier, we are proud to announce
a special program for our readers called My
HSA Rewards. Now when you shop through major retailers like Barnes
& Noble, Target, Starbucks, Netflix, and others, you will automatically
earn cash rewards of 0.5% to 25% on your qualifying purchases. All your
earned rewards accumulate and can transfer to your HSA when the amoun totals
at least $50.
There
is no cost to enroll, and your rewards start accumulating immediately.
Healthcare Solutions
The
U.S. has the highest quality healthcare in the world. Unfortunately,
there are many problems with how our system works. The biggest is the
high cost, driven by the fact that no one knows what procedures really do
cost, because doctors and hospitals are not transparent with their pricing.
Our employer-based system can also leave people uninsurable if they have pre-existing
health problems and lose their job.
We
believe that the solution is not in a government-run program, because government
responds not to consumer need and price competition, but to special-interest
lobbyists. The inefficiency in government service is apparent whenever
we need to renew a driver’s license or deal with the IRS. Instead,
we believe that any solution should have HSAs as their core, and should promote
price transparency and competition among insurance companies, and among healthcare
providers.
If
this is of interest to you, you can read my new blog and give your feedback
at http://HSAforAmerica.com/healthcare-debate-blog/.
To your health and wealth,
Wiley
Long
President - HSA
for America
P.S. - Next month we'll talk about how to negotiate with healthcare providers to lower the amount of your bill.
