StudentShare
Contact Us
Sign In / Sign Up for FREE
Search
Go to advanced search...
Free

Health Savings Accounts Analysis - Essay Example

Cite this document
Summary
The essay "Health Savings Accounts Analysis" focuses on the critical nalysis of the major issues in the Health Savings Accounts (HSAs) which is one of the newest and currently most important forms of consumer-driven health plans. It's based on the Medicare Modernization Act of 2003…
Download full paper File format: .doc, available for editing
GRAB THE BEST PAPER92.3% of users find it useful
Health Savings Accounts Analysis
Read Text Preview

Extract of sample "Health Savings Accounts Analysis"

Nevertheless, all patients must pay small and medium medical expenses on their own that includes all the deductibles below $1,000 for singles and $2,000 for families. However, for major illnesses and high-cost care high deductibles that are more than $1,000 apply. Most conveniently, the Health Savings Accounts allows patients to pay these expenses either out of pocket or from the HAS savings account (Petigara & Anderson, 2008). Additionally, where the medical care does not exhaust the Health Savings Accounts, the savings proceed to the next year and all earnings from the savings are exempt from federal taxes. In addition, all contributions to Health Savings Accounts are exempt from federal income taxes (Getzen, 2010). Most, significant is the fact that either the person or employer can finance the Health Savings Accounts with amounts less than or equal to the deductible.

However, the contribution by employer or government is limited to a fixed dollar amount. Indeed Health Savings Accounts have distinct characteristics that include providing healthcare to the uninsured to pay out-of-pocket costs. Uniquely, HSA funds roll over from year-to-year and employees can confidently take the account with them upon changing employers (America's Health Insurance Plans, 2012). In addition, the account provides a comprehensive health insurance plan and guarantees tax-deferred funds for qualified medical expenses. Similarly, the account guarantees quality medical care for patients of all health conditions, different ages, and socioeconomic backgrounds. Furthermore, the account enjoys tax benefits for withdrawals and high-deductible plans. Additionally, all deposits to the HSA accrue by April 15 and are usable for long-term-care insurance premiums.

Indeed, the uniqueness of the Health Savings Accounts allows for differences with other traditional kinds of health insurance. For example, unlike other traditional kinds of health insurance that allow the use of deposits for health care premiums, HSA only allows long-term-care insurance premiums. Additionally, other health insurance plans do not allow for funds to roll over from year to year as HSA does. At the same time, in other health insurance plans savings stay with the company if the employee changes jobs unlike in HSA where employees take s the savings with them to the new employer. Moreover, unlike in the HSA where the employee, employer and the government are at liberty to finance the account, other health insurance plans restrict funding to employers only. At the same time, where HSA limits health care services to high-deductible plans, other traditional health insurance plans have no limitations. Most significantly while HSA is for all health conditions, different ages, and socioeconomic backgrounds, some traditional health insurance plans like Medical savings accounts limit their coverage to self-employed persons. Finally, where withdrawals and high-deductible plans enjoy tax benefits in HSA (Getzen, 2010), other health insurance plans do not have this advantage.

As such, HSA attracted various pros and cons about economic principles and effectiveness. Notably, HSA allows consumers to enjoy tax benefits on contributions and withdrawals. Indeed, earnings, interest, and dividends are exempt from tax. This is significant in allowing earnings to earnings to gain interest on a tax-benefit platform. More so, HSA has no limitations to contributors and thus its affordability (Bierbower, 2007). It is equally convenient to the aged who can make up with marginal contributions until they qualify for Medicare. Moreover, there is no limitation as to how much one can accumulate in the account. Assuredly, the unexploited earnings can roll over to the next year thus allowing ageing employees to use it as a retirement plan with immense tax benefits. Indeed, one can save more in HSA than in Individual Retirement Account. Most important is the fact that there are no time limits to the spending of money in the account. Therefore, where one cannot exploit all the earnings on healthcare costs, you can roll it to subsequent years for future healthcare or other reasons after retirement. HSA allows a patient to visit a doctor at his convenience and covers almost all medical expenses that include costs of long-term care, opticians, cosmetic surgery, medical doctors, funeral expenses, dentists, prescriptions, and Medicare HMO insurance premiums.

Nevertheless, HSA has some cons especially because only the highly paid and the reasonably healthy can effectively benefit from the account. Patients who frequent health facilities with low medical expenses cannot benefit from this plan, as they are required to pay for themselves medical expenses below $ 1,000 for singles and $2,000 for families. Additionally, subject to the tax benefits and capacity to save huge amounts of money, wealthy Americans can abuse HSA by using it as a tax shelter. Most significantly, HSA does not accommodate preventive treatment, which later on advances to complicated health status that is very expensive to handle (Bierbower, 2007).

Read More
Cite this document
  • APA
  • MLA
  • CHICAGO
(“Health economics Essay Example | Topics and Well Written Essays - 750 words”, n.d.)
Health economics Essay Example | Topics and Well Written Essays - 750 words. Retrieved from https://studentshare.org/health-sciences-medicine/1457766-health-economics
(Health Economics Essay Example | Topics and Well Written Essays - 750 Words)
Health Economics Essay Example | Topics and Well Written Essays - 750 Words. https://studentshare.org/health-sciences-medicine/1457766-health-economics.
“Health Economics Essay Example | Topics and Well Written Essays - 750 Words”, n.d. https://studentshare.org/health-sciences-medicine/1457766-health-economics.
  • Cited: 0 times

CHECK THESE SAMPLES OF Health Savings Accounts Analysis

Health Care Issue: Health Savings Account

This research paper "Health Care Issue: health savings Account" will begin by giving a description of HSA, and give an economic analysis of this issue from an economic perspective is also given and finally, the limitations, assumptions, and recommendations from which the constructor could act.... health savings AccountsIntroductionHealth care is one of the basic needs and therefore every person is entitled to proper health care.... In the US, taxpayers enrolled in a High Deductible Health Plan (HDHP) have the advantage of benefiting from an HSA, a custodial account, or a tax-advantaged/ tax-exempted medical savings account (Feldstein, 2006)....
10 Pages (2500 words) Research Paper

Financial Planning and Wealth Management

Individual Saving accounts are accessible from a range of sources such as banks, supermarkets, building societies, investment firms, national savings, financial advisors, stockbrokers, and insurers.... The "Financial Planning and Wealth Management" paper analyzes and evaluates the various parameters to achieve the desired objectives and return....
13 Pages (3250 words) Essay

The History of Thrift Savings Plan

The author of the following paper "The History of Thrift savings Plan" will begin with the statement that apart from the Social Security and other saving plans, the Thrift savings Plan is one of the greatest saving plans of the United States government.... The Thrift savings Plan is an investment plan for federal workers including the members of the uniformed service such as the Public Health Services, the Coast Guard, and the National Guard....
7 Pages (1750 words) Research Paper

Personal savings and insurance

The savings that are set aside acts like a precautionary measure against future income fluctuations.... me of the actions that necessitate precautionary savings include business risk, health risk, risk of labour income change, unavoidable expenditures, children's educations, and savings for retirement (Carroll and Kimball, 2001).... ome consumers are motivated to save so they may enjoy interests or dividends that those savings may attract in the future....
5 Pages (1250 words) Essay

Speech outline on why you should start a savings account

The benefits of health savings accounts: Hearing before the Subcommittee on Workforce, Empowerment & Government Programs of the Committee on Small Business, House of Representatives, One Hundred Eighth Congress, second session, Washington, DC, March 18, 2004.... ONCLUSIONTransition: There is continuous uncertainty in the standard of living in the economy which has necessitated for opening of savings accounts.... losing with impact: savings accounts should be prioritized on a person's financial journals....
2 Pages (500 words) Essay

American Consumer Wages, Income, Wealth and Savings

This paper focuses on the consumer wages, income, wealth and savings in the United States, and how the trends in this area have changed in the last 20 years.... One should build up emergency savings to cover for any emergencies that may crop up in future.... In the last three decades, the US economy has experienced one of its best as well as worst moments....
8 Pages (2000 words) Research Paper

Balance of Payment in Saudi Arabia

The current account with its underlying components serves as an all-understanding instrument of analysis for the determination of the strength and weakness of the economy.... Balance of Payments is an accounting record of the interaction of individual country to the rest of the universe in regard to the entire economic and financial transactions....
9 Pages (2250 words) Essay

Global Savings Glut Concept versus Excess Financial Elasticity

Bernanke (2005: p1) proposes the global savings glut model, arguing that excessive saving from oil-exporting countries and Asian countries, especially China, resulted in large trade accounts deficits and persistently low-interest rates.... The current account balance in the balance of payments accounts is derived by subtracting a country's domestic investment from its domestic savings.... Asian economies and oil-producing states generated large surpluses in their current accounts, which were matched elsewhere in western economies by current account deficits, as the former became excessive savers....
8 Pages (2000 words) Literature review
sponsored ads
We use cookies to create the best experience for you. Keep on browsing if you are OK with that, or find out how to manage cookies.
Contact Us