Health Savings Accounts (HSAs) are likely to gain prominence because of political support and the interest of large financial firms. With HSAs the accent is on the first syllable because the right kind of health insurance must be in place before an HSA can be created.
To qualify, a health insurance policy must have a deductible of at least $1,050 for individual coverage, or $2,100 for families. In an addition, a “stop-loss” provision must hold out-of-pocket costs to no more than $5,250, or $10,500 for family coverage. The stop-loss ceilings include co-payments as well as the deductible. (All of these 2006 numbers will be indexed for inflation.)
The cost savings of going from low-deductible to high-deductible insurance might justify the added exposure. You have to see how much extra expense you may incur, by going to a higher deductible, and compare your increased risk to the assured savings from the lower premiums.
If that tradeoff seems acceptable, you can invest the amount of your health insurance deductible in a tax-sheltered HSA.
