Indiana Health Insurance – Should You Get HSA?

For those who are searching for Indiana medical insurance, you might be interested to see various health options. One of the newest things to think about would be an IN health insurance option known as health savings accounts. Health savings accounts or HSAs are very popular. About 2.5 million Americans are enrolled in these consumer-driven Indiana health insurance plans since it began in 2004. However, HSA’s are not for everyone therefore we’ve come up with some top tips to figure out if an HSA will work for your IN medical insurance plan.

1. Most people with an HSA will cut insurance costs by an average of 40%.

To realize significant savings, you are someone that pays all of your own health insurance premiums.  This is frequently someone who is self-employed and are fairly healthy with few medical costs.

2. Health savings plans mean more freedom of choice.

By having an HSA plan, consumers are now back in control of their own health care. This also means that each individual must be more responsible for his or her own health care decisions. This isn’t always popular with or appropriate for everyone, especially those who enjoy the HMO-type “co-pay” plans.

3. HSA can reduce income taxes.

Each dollar that you contribute to your HSA is deducted from your taxable income.  Whether you spend it or save it, it counts as as deduction similar to your IRA contributions. Also like an IRA interest and earnings accumulate tax free. Withdrawals are tax-FREE when used to pay qualifying medical expenses.

4. Before committing to an HSA, you must already have bought an insurance plan.

IRS regulations, however, are quite specific as to what qualifies as a plan.  Not just any policy with a so-called “high deductible” will work.  Make sure that you are insured under a properly qualified policy. Be sure to find a qualified and licensed health insurance broker with knowledge on properly qualified HSA plans.

5. If you want to be eligible for HSA-qualified health insurance policy, you have to be insurable

People without a properly qualified high deductible insurance policy will need to switch insurance plans to qualify. Unless coverage is being offered under small group reform laws, the new high deductible policy will be individually underwritten by an insurance company.  WIth that, some “pre-existing” conditions may not be fully covered.  Some companies may opt to cover certain “pre-existing” conditions but charge slightly higher premiums. Some health conditions such as: diabetes, chron’s disease, heart attack - will simply not be able to qualify. Underwriting requirements vary by state.

The only time to think of switching is if your health is strong and there are no upcoming medical concerns to deal with. Don’t switch to a HSA plan when the management of existing medical expenses is more important than saving up-front medical insurance premiums..

Indiana health insurance companies offering HSA coverage make it a direct process based on your application answers and occasionally there a follow-up telephone interview. Based on your answers, medical records may be requested, and companies always reserve the right to order an exam.

6. HSA insurance premiums are often lower but these may not be as low as you might expect.

With health insurance Indiana it is all about risk.  Although it has a “high” deductible, the insurance company still must compensate for the risk it is assuming over the deductible amount. These IN health insurance companies are offering plans for whole families.  Therefore, it is not uncommon for premiums for a 5000 family deductible with 100% coverage after the deductible to be comparable to a 2500 “per person” deductible plan with 80/20 coverage after the deductible.

Generally, lower premiums represent just one element of the lower net cost achieved with an HSA plan. The additional cost savings is achieved after factoring in the benefits of lower taxes because of the tax-deductible contribution to the HSA account. So if you are looking for the lowest possible gross premium, you may want to consider a high deductible, non-HSA policy.

7. Put a cap on your health insurance rate increases through your HSA

Inevitably, you will still have rate increases with your HSA insurance policy, but you can expect the actual dollar amount of any future rate increases will be substantially lower compared to traditional health insurance plans (regular PPO and HMO plans).  This is because insurers base increases on percentages, and the same percentage of a lower base premium results in a lower dollar increase. While not a perfect solution, it is the most cost efficient solution for many qualified people.

Wanting to get Indiana medical insurance policies? You may want to think of HSA as one of your options.

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