Look At All Your Options

By Charles L. Feitel

Charles L. Feitel Company

. http://medicalanddentalspace.com

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Look At All Your Options

It's almost the end of the year and time to re-look at the health care scene in America. Obviously, there are several options with respect to health care in this country. These include but are not limited to the following 1) no insurance at all not a very good option, 2) HMO or PPO coverage at a steep cost, 3) traditional 80-20 insurance may be good depending on your situation, or 4) a new one I just became aware of called a medical savings plan or MSA. This new one is the one I want to talk about in this article as it is quite interesting and is applicable to a large segment of my targeted audience.

First, I need to qualify that I am not an insurance broker nor am I an insurance agent. Therefore, please talk to your agent about this program for all the details and costs. I am going to point out the general concepts of this type of insurance, and it will be necessary to obtain the specifics from a qualified professional. Under traditional insurance coverage whether HMO or not the insured pays premiums, which pay for the insurance. These premiums typically have a deductible and have limits and caps. However, under all typical plans, all of the premium dollar cost goes towards the insurance cost and is gone at the end of the year. In other words, if it costs $700 per month for health insurance, at the end of the year you have spent $8,400 and now have to pay insurance for the next year. Therefore, over five (5) years a family coverage policy could cost over $40,000.

The MSA is for self-employed individuals only. I repeat this plan is only for the self-employed and I highly recommend speaking with your attorney or accountant to see if you even qualify for this type of coverage. Under this type of coverage a certain amount is paid each month and put in a savings account. This money is accumulated with interest and not taxed. Additionally, a premium is paid to the insurer. This plan has a high deductible and is probably not an option if you have a large amount of prescriptions each month. As you incur medical bills you pay them with this money in the medical savings account. At the end of the year any money not spent is kept in the account with interest and carried over to the next year. After the deductible is satisfied, the insurance kicks in at 100%. Using the example aforementioned, unless your family medical bills typically exceed $8,400 per year, this may be a valid substitute for you.

While evaluating this year's options for health coverage, if you are self-employed you owe it to yourself to explore MSA further. As health care costs continue to spiral upward out of control, this may be a way to curb inflation. Remember, looking at all of your options could prove significant in the long run.