I post over on the REHP forum occasionally, but this one seems to have a lot more people on it so I am going to post this here.
What do you guys/gals think about HSAs? I'm trying to decide whether I want to go with one instead of my regular Blue Cross Blue Shield health insurance policy.
As you all know, health insurance premiums have gone up tremendously in the last few years. From 1999, when I first got my policy, to 2003 the premiums had gone up about 550%. In 2003 BCBS gave me the opportunity to switch to a different policy with less coverage and higher deductibles for a reduced premium without going through underwriting again. I reluctantly took it. Well, since 2003 that premium has gone up about 100% and next year when I turn 50 I am expecting a BIG increase.
I got some BCBS quotes on their HSA qualified policies (different deductibles, different coinsurance percentages) in December. I am healthy and most years I don't see a doctor at all. Every couple of years or so I have a physical exam and usually that is about it. Of course, tomorrow I may discover I have cancer.
The fact that any money I put in an HSA that I don't use is still mine and that the money I put in is pre-tax dollars are very attractive.
By the way, speaking of pre-tax dollars, my income is from stock dividends, CD/money market fund interest, and capital gains. The dividends and capital gains have reduced tax rates, but the interest is taxed at the normal income tax rate. Would money put into an HSA reduce my tax on interest income or is it only on wage income?
Anyway, I would really like to hear your thoughts about these HSAs. I suspect some of you have thought about them. What do you see as the pros and cons? Does anyone here have one?
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