Tim Hayes
Contributing Writer
PA Manufacturer Magazine
The first thing most people associate with the Medicare Modernization Act is the prescription drug benefit for seniors, but another provision in that legislation is proving to be more popular and easier to understand and use – Healthcare Savings Accounts, or HSAs.
Under an HSA, interest-bearing tax-free accounts can be opened by anyone who purchases a low-premium, high-deductible insurance policy. The insurance policy itself covers unseen medical catastrophes. Meanwhile, the money put into the HSA account can be used for routine health expenses – from contact lenses to office visits – with unused savings accruing from year to year.
HSAs put healthcare choices back into the hands of consumers. What’s more, they’re designed to lower the cost of insurance for many Americans who otherwise could not afford medical coverage. The basic idea is to give individuals a tax break while deregulating the market for health insurance.
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