Ask Dr. Katy
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"Ask Dr.
Katy," is designed to answer your questions related to healthcare costs
and service organization.
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Dr.
Kathryn Votava is a registered professional nurse who has a Ph.D. in
health economics and nursing. With her in-depth experience as a nurse
practitioner, healthcare administrator and researcher, Dr. Votava is an
expert in healthcare reimbursement and outcomes, including those
related to Medicare, Medicaid and long-term care.
Email your questions to:
kathryn.votava@goodcare.com
or call 1-866-696-6543
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What are High Deductible Health Plans?
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A High Deductible Health Plan, also known as an "HDHP," is a health insurance plan with lower premiums and higher deductibles than a traditional health insurance plan. It is
sometimes referred to as a "catastrophic health insurance plan" or a
"consumer-driven health plan." In order for a health insurance to qualify as a High
Deductible Health Plan, the Internal Revenue Service requires the
plan to have specific levels for the deductibles which are listed in the table
below.
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| Family |
$2,200 - $11,200 |
$2,300 - $11,600 |
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What's the Advantage of a Health Savings Account?
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If
you have a High Deductible Health Plan and are not on Medicare, you can also open a
tax-advantaged medical savings account, called a Health Savings Account. A
Health
Savings Account, also
known as an "HSA," is an account that you control
in a financial institution, such as a bank.
You can use that account to
cover your out-of-pocket healthcare expenses, including the deductible amounts
for your High Deductible Health Plan. You
can also use that account for other health care expenses unrelated to the High Deductible Health Plan, such as Long Term Care Insurance premiums. The Health Savings Account deposit limits
are listed below and include an additional "catch-up" amount for those who are 55 years of
age or older.
| Individual |
$2,900 |
$3,000 |
| Family |
$5,800 |
$5,950 |
| "Catch-up" if over 55yrs old |
$900 |
$1,000 |
One nice feature of a Health Savings Account is that the money goes into the account "pre-tax". If you use the Health Savings Account to pay for qualified medical expenses, that money is tax free coming out of the account. Withdrawals for non-medical expenses incur penalties and taxes. A Health Savings Account is not like
some other medical savings accounts that have the "use it or lose it" feature
of needing to spend all of the money each year. Unused money in a Health
Savings Account accumulates interest, tax free and "rolls over" from year to year. That money can be used in the future for medical expenses. Therefore, a Health Savings Account can be an effective way to save money, tax free, for future medical expenses. For more information go to our free FAQ's on Health Savings Account Information and High Deductible Health Plans.
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 Ask Dr. Katy
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Q: I am thinking of
getting a High Deductible Health Plan for myself and my family. While
the premium is lower than the health insurance I have had, I am concerned about
paying so much out of my pocket for the deductible. What should I do?
A: Many people find that they save enough money on the High Deductible Health Plan premiums to
fully fund a Health Savings Account to
use pay for those deductibles. For
example, if you select a High Deductible
Health Plan with a $5,800 annual deductible, you can then open a Health Savings Account and deposit
$5,800.
Q:
What happens to my Health Savings Account once I am 65 years
old and still have money in that account?
A: Once you are 65 years old, you can no longer deposit new
money into the account. But, if you have
money in your account, it will continue to grow tax free and you can continue
to use that money, tax free, for healthcare expenses. You can also use that money for
non-healthcare expenses and pay no penalty or taxes on that money when it
withdrawn once you are 65 years of age or older.
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Call us toll-free @ 1-866-696-6543 for a consultation today!
We can help you sort out your needs and focus on up-to-date information, planning tools and more to put the pieces of your healthcare cost picture together.
Take GOODCARE,
Dr. Kathryn Votava
President
kathryn.votava@goodcare.com
Copyright (c) 2008 GOODCARE.com.
All rights reserved.
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