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Health Savings Account Plans Individuals Question & Answers

2013 June 2
by Sarah Fields

James asks…

what is the responsibility of individuals in the cost of their care?

what is the responsibility of individuals in the cost of their care? are health savings acconts and high deductible insurance policies and approach that should be expanded? what are the concerns for low-income individuals?

Sarah Fields answers:

Health insurance should be affordable because health care will never be affordable. I dislike the savings accounts. Low income families with children should be eligible for state sponsored programs as well as middle income families are often eligible for state sponsored reduced cost programs. Individuals should be responsible for their own care. I was without health insurance for 2 years. Just before I got a new job that offered insurance, I was going to get “Individual Blue” from Blue Cross Blue Shield- it was less than $90/mo for coverage. I think people can afford that and I was making $6.25/hr at that time and was going to purchase the $90/mo plan. People can afford the coverage they just want the government to foot the bill for as much as it possibly can.

Lisa asks…

What is my health plan’s cost to me?

Background info: I am 18 years old, serviced by L.A. Care Health Plan, and covered by the Medi-Cal Program.

An insurance waiver asks these questions about my plan:

1. Does your plan have a Lifetime Maximum benefit?
2. Does your plan have an Annual Maximum benefit?
3. Does your plan have a Per Injury or Illness Maximum benefit?
4. What is your health plan’s Annual Deductible for an individual?
5. Does your health insurance plan have a Health Savings Account?

I would appreciate if anyone had the answers to these. Thanks in advance.

Sarah Fields answers:

You are on welfare, and as such you do not have any maximums, deductible, or savings account.

William asks…

Is it best to put extra money into a savings account, into insurance, or into stocks and bonds?

What are the advantages and disadvantages of each? When in an individual’s lifetime should they consider making each kind of investment?

Sarah Fields answers:

A complete answer to your question would be book length, because you’ve basically asked what kind of financial plan should you have. But a few points to start your thought process would be:

1. Savings account: make sure you have enough cash to cover six months of living expenses, in case you are laid off or can’t work due to health problems. In addition, put the downpayment for a house or car in a safe place like a savings account (don’t risk them in the stock market).

2. Insurance: depends on what insurance you need or want. If you have no dependents, forget about life insurance. If you do have dependents, think about buying term life coverage. Make sure you have health insurance, disability insurance, homeowners or renters insurance, and perhaps an umbrella policy if you have a substantial net worth. None of these insurance policies provide investment opportunities; they instead protect you from loss (which is a more important use of insurance than investment). Insurance that offers investment features (such as whole life, annuities, etc.) generally aren’t good ideas–too expensive and complex. A fixed annuity might be suitable if you’re on the verge of retiring to provide a steady stream of income.

3. Stocks and bonds are suitable for long term investment, such as for financing retirement or the college education of a young child. Stay diversified, don’t expect to get rich quick, do expect ups and downs (because that’s the way of the stock market).

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