Health is a topic important to Moms. I know this, you know this, everyone knows this! Yet no one seems to be talking to is us Moms straight about what is actually going on with Health Savings Accounts. The “well off” talking heads on the news keep mentioning them, but there are things they aren’t telling us! I know someone though who is telling it like it is and I don’t know about you, but a Health Savings Account wouldn’t work for me or my family or really most of the people I know. We need to share this and let Moms know, we need to do something!
~~~~~~~ Thank you Michele McManus ~~~~~~~
Interested in A Health Savings Account? Heard from some rich well to do people that they are the best thing since sliced bread?
I have compiled the facts for you, complete with my opinion.
HSA’s have been around for a long time. When I was 20 years younger and totally healthy and making six figures, my broker offered them as an option. I declined because I felt then as I do now, it is not Insurance, it is a Gamble.
The feature that the “Well Off” will tell you that is so great is that you pay for it with pre-tax dollars.
“Advantages”
1 – Others can contribute to your HSA-“Have a rich aunt or want a contribution in lieu of a Wedding Gift”?
2 – *Pre-tax contributions-* “This is their fave. Big gift to you they will not charge you taxes. BUT You have already paid taxes on the Income“.
3 – Tax-deductible contributions – Contributions made with after-tax dollars can be deducted from your gross income on your tax return, which means you may owe less tax at the end of the year.
4 – Tax-free withdrawals- HSAs are not subject to federal (or in most cases, state) income taxes if they are used for qualified medical expenses.- “Huh? Bit redundant don’t you think. Why in the world would you be charged for paying for medical expense out of a Savings Account for Medical Expenses? But heck they have to come up with something positive”.
5 – Earnings are tax-free – If you don’t use all the money you might earn some interest and that interest is not taxed. “Good luck with that one”
6 – Funds roll over. If you don’t use all the money it is applied to the next year.
7 – Portable – Can be transferred to another HSA.
8 – Convenient – “Hey, I didn’t make this up. Convenient because you can use a credit card”.
Can you see a theme? Nobody is helping you in any way pay for the health insurance. Because it isn’t insurance. It is a savings account. All that is offered are ways to avoid paying taxes on something that should never be taxed in the first place.
So, I will repeat Health Savings Accounts are worthless unless you are young and healthy and don’t dare get into an accident and survive the accident needing lots of care. Be absolutely confident that a high deductible will not wipe you out.
Disadvantages
1 – High deductible requirement. Even though you are paying less in premiums each month, it can be difficult – even with money in an HSA – to come up with the cash to meet a high deductible.
Unexpected healthcare costs. Your healthcare costs could exceed what you had planned for, and you may not have enough money saved in your HSA to cover expenses.
2 – Pressure to save. You may be reluctant to seek healthcare when you need it because you don’t want to use the money in your HSA account.
3 – Taxes and penalties. If you withdraw funds for non-qualified expenses before you turn 65, you’ll owe taxes on the money plus a 20% penalty. After age 65, you’ll owe taxes but not the penalty.
4 – Record-keeping. You have to keep your receipts to prove that withdrawals were used for qualified health expenses.
5 – Fees. Some HSA’s charge a monthly maintenance fee or a per-transaction fee, which varies by institution. While typically not very high, the fees do cut into your bottom line. Sometimes these fees are waived if you maintain a certain minimum balance.
6 – Bad for your health. Many will be reluctant to seek medical attention. This can be the difference between life and death.
7 – Many will forego periodic check ups that detect disease in their beginning stages.
8 – If we had all this excess money to fund a Health Savings Accounts the rest would be irrelevant.
9 – If we were making so much money that we needed those tax deductions, once again irrelevant.
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Think about it…. 50% of Americans in 2017 are living pay-check to pay-check, and 30% have nothing saved. Average Americans have just as much debt now as they did during the recession! One illness can push people to the brink of financial ruin! Stagnant wages aren’t helping families either! So in theory, for 50% of you reading this, the idea of HSA’s is laughable because it is just so sad and tragic. We have to figure out a better way to help our country be healthy, I am no expert, and just my opinion, but given the Data, HSA’s aren’t going to help even half of the country.
