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Hsa Insurance Premiums Tax Deductible Question & Answers

2013 December 7
by Sarah Fields

Mandy asks…

Why would McCain promote a new tax on employer provided health insurance benefits?

I know he says he will give you a deduction or credit or whatever but isn’t that just the Govt taking taxes out of your paycheck and giving it back to you a year or so later? Why do they want us to finance their overspending and craziness?
If it’s a lie why did Sarah Palin admit it during the debate?

Sarah Fields answers:

The idea is to promote individual health insurance plans, and to discourage group plans.

The thinking is that when the consumer is paying the insurance premiums, (s)he will gravitate towards lower cost policies. Consumer Driven Health Plans (CDHP’s) specifically. Having a CDHP allows you to open up a Health Savings Account (HSA) where you, and your employer, can contribute non taxable money for future medical expenses. With these plans everything is subject to the deductible, except your annual wellness benefit, which used to be called your annual physical. You are expected to pay for all of your medical services out of your own pocket (your HSA) until you reach your deductible.This will demand a more conscientious consumer, bringing market forces to bear. It might also bring some transparency to health care costs, lowering the costs for everyone. Another factor is that with an individual policy, you own the policy, not your employer. Cobra, and it’s limitations, goes away with individual policies. I think (don’t hold me to this) another part of the plan is to open up the individual market across state lines allowing for more competition and consumer choice.

The argument against CDHP’s that people won’t save for future expenses, and will also simply forgo minor or maintenance types of care which may require more expensive treatment down the road.

I think both sides are right, and everyone agrees something has to change because what we have now isn’t working.

Don
http://mtnhealthinsurance.com

John asks…

Can any one tell me which health insurance is good and affordable?

my mom and dad don’t have health insurance, and i would like to get insurance for them so i will be paying out of my pocket can anyone tell me which insurance is best please thank you

Sarah Fields answers:

Check daveramsey.com for some different options…

I would suggest an HSA (Health Savings Account) that has a high deductible health insurance plan with it. The monthly premiums are very low, but you have to take the savings and put it in an account so you can pay for your own coverage. The advantages are: your savings that you don’t spend are still yours, and it’s all tax deductible. Good luck!

Donald asks…

Does anyone know of a high deductable, low premium health insurance?

I am looking for a catastrophic insurance policy where I would have a deductable of $10,000… I would pay for office visits and prescriptions.

Sarah Fields answers:

Most health insurance companies offer these catastrophic/major medical insurance plans. As you are probably aware, many people are combining high-deductible health plans (HDHPs) with health savings accounts (HSAs). HSAs allow you to put aside money to be used for qualified medical expenses. The money you contribute is triple tax-free: contributions are tax-deductible, interest earnings are not taxed, and withdrawals are tax free as long as they are for qualified medical expenses. Not all HDHP qualify for a HSA, however.

If you want to quickly comparatively assess local health plans and speak to state-licensed health insurance agents without cost or obligation, check out MostChoice.com. You can find it here:

http://www.mostchoice.com/health-insurance.cfm

Hope this helps,
Barnes@MostChoice

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