Health Savings Accounts - A Missing Component of the Current Health Insurance "Reform" Debate
For some farm families, the cost of health care is a major expense. In some instances, at least one of the spouses may deem it necessary to find off-farm employment for the purpose of obtaining health insurance for the family. For these families health insurance is very important, and a consideration of the various planning options associated with health insurance is critical.
The present health care “reform” debate is missing a major point – significant and real health care reform was enacted into law in late 2003 as part of the Medicare Prescription Drug, Improvement, and Modernization Act of 2003 (Act). This reform didn’t involve a nationalization of health care in the U.S. as does legislation currently under consideration by the Congress, but it was very significant. The 2003 Act authorized the creation of private, individually-owned Health Savings Accounts (HSAs). An individual with an HSA can pay for unreimbursed medical expenses (e.g., deductibles, copayments and services not covered by insurance) on a tax-advantaged basis. They foster competition for medical services based on price, are fully portable (i.e., the HSA owner owns the account and is not dependent on an employer for health insurance coverage), and significantly reduce bureaucratic red tape. Since their availability beginning in 2004, they have dramatically grown in adoption.
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