Recently, demand for health care services has risen due to lifestyle changes. Healthcare services are sought by almost everyone regardless of age, gender, class, or social class. The increase in demand has made healthcare services to be expensive and sometimes unaffordable to many. It is practically impossible to plan the amount of money one should spend on a specific treatment because not all conditions or diseases are treated the same. A health savings account was introduced to enable people to save enough money for future healthcare needs. This paper will provide more insights into the Healthcare Savings Account (HSA) definition and how it benefits both healthcare systems and consumers.
Health savings accounts (HSA) are used to save money for health care expenses. Money saved in the HSAs is controlled by individuals and not their employers or insurance companies. People qualify to open an HSA by enrolling in the high-deductible health insurance plan. HSA exists as a model to control healthcare costs. One of the enormous benefits of HSA is that the funds saved in the account are not taxed (Mayo Clinic n.d.). A Health Savings Account suits healthy people who want to save for future healthcare expenses and people going for retirement as the money saved will cater to retirement medical care costs. People with HSA can always use the account to pay for qualified medical expenses at any time. Unlike most health insurance cover, HSA funds do not expire after the end of the year because they are rolled over to the next year if not spent in that year. Health savings accounts can be opened through some banks or other financial institutions.
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Health savings accounts are an excellent idea for healthcare. Through HSA, most people can plan appropriately on their future healthcare expenses. Wilkins (2021) observed that in the year 2020, most people opened HSA on the realization that the account will help them better prepare for emergency healthcare expenses and retirement savings. Wilkins observed that most employees understood that the HSA would cover their health care costs even after being laid off. HSA also curtailed unnecessary spending on the healthcare cover since people realized that they were spending their money and thus increased the healthcare dollar. HSAs enable individuals to save and invest funds for healthcare expenses in the long term.
The health savings account has by far expanded healthcare options for people as compared to traditional health insurance policies. People with HSA can seek healthcare services from any hospital or healthcare institution because they will be spending actual money on the account. HSA allows people to access more healthcare services using less money because tax is not applied on the money saved (Kohler, 2017). HSA does not apply the insurance company’s analogy of use or loss for the amount saved since it is rolled over to the following year. Therefore, people avoid using HSA funds for unnecessary healthcare expenses.
A health savings account allows small businesses and companies to offer their employees health insurance coverage due to lower insurance rates to the employer. Through high deductible health plans, employers pay less for premiums. HSAs help employers provide their employees with accessible and affordable healthcare means (Paola, 2005). People with HSA are allowed to carry the account from one job to another, and thus they can cover their healthcare medical expenses all the time.
A health savings account is a splendid strategy to plan future medical expenses for both individuals and families. HSA carries a basketful of benefits, and as such, it is gaining popularity as a replacement for the traditional healthcare insurance policies.
References
Kohler, M. J. (2017). 7 key benefits to a health savings account. Retrieved from https://www.entrepreneur.com/article/292455
Mayo Clinic. (2019, March 16). Everything you need to know about health savings accounts. Retrieved from https://www.mayoclinic.org/healthy-lifestyle/consumer-health/in-depth/health-savings-accounts/art-20044058
Paola, R. L. (2005). Health Savings Accounts: Are HSA’s beneficial from the employee’s view? Are HSA’s beneficial from the employer’s view? Seminar Research Paper Series . Paper 11. Retrieved from https://digitalcommons.uri.edu/cgi/viewcontent.cgi?article=1011&context=lrc_paper_series
Wilkins, C. (2021, March 2). The importance of HSAs in saving for future health care needs can’t be underestimated. Retrieved from https://www.benefitspro.com/2021/03/02/the-importance-of-hsas-in-saving-for-future-health-care-needs-cant-be-underestimated/
