Health Savings Account (HSA) is the new buzz around healthcare. I hope to clarify some misunderstandings about HSA's.

HSA's are the account you open with a qualifying high deductible health plan and you use the account to pay your medical expenses. A consumer purchases a high deductible health plan for a monthly rate and also has the HSA, it is a 2 part health system.

The HSA is similar to an IRA, contributions are tax deductible, it is interest bearing, it becomes essentially a retirement account at age 65. The difference is you can withdraw money from the HSA to pay your medical expenses and there is no penalty.

The high deductible health plan (HDHP) is a plan that is generally $1500-$10000 deductible and the deductible is paid by the consumer before the insurance company pays for healthcare provided. Additionally the HDHP pays for wellness care up front with no co-pay. This care includes, annual screenings, immunizations and blood work. Remember that any doctor's visits or prescriptions that the consumer pays for, as long as they are covered on the plan, all goes toward payment of the deductible.

This is a trend in healthcare and I think most consumers don't understand their plans and the medical field has not made it any easier either. This is a way to become aware of your healthcare costs and manage them on your own.

If you ahve questions, please ask.