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Mary Richards ReprotingPresident Bush has been stumping across the country for his health savings account plan. Local consultants are explaining how they work.
President Bush says millions of Americans are signing up for health savings accounts.
"I believe we ought to encourage more consumer activism, more involvement in making health care decisions," President Bush says.
Health Savings Accounts are tied to a high-deductible health plan. Money is put into the account and it grows, tax-deferred. It carries over every year. DMBA senior consultant on employee benefits David Lundquist says for that reason, HSAs can be used to greater advantage by the younger and healthier workers.
"Younger, because over time, as you build up those accrued funds, there will be a larger amount at the time of retirement and you can use it as a resource for your medical care as a retiree. Healthier because generally healthier people are benefitted by a high-deductible plan. If you don't go to the doctor very often, you're not going to have a lot of health care.
Lundquist says HSAs are here because of increasing costs of health care and more businesses dropping retiree health insurance.
"The responsibility is upon the employees to use their health care resource dollars wisely to find providers that provide not only excellent care, but at a reasonable cost," Lundquist says.
Lundquist says the rules are complex and there are limits to the amount of money people contribute annually.
"If it's early in the year and you have a major medical catastrophe, you can only draw on money that's in your account," Lundquist says.
Lundquist says HSAs do fill a niche, and are an alternative to paying a higher medical plan premium.
"If you're looking for basic preventive care, and you think you can afford a thousand or two thousand dollars as a family for out-of-pocket costs, these programs can definitely work," Lundquist says.
