Derrick Kinney has written an article about Health Savings Accounts in the Fort Worth Business Press about the advantages of Health Savings Accounts. There is nothing groundbreaking in the article for anyone familiar with HSAs, but I loved this line.
The savings component is designed, first and foremost, to help pay for out-of-pocket expenses, such as deductibles, that are incurred each year. But one of the most appealing aspects of HSAs is that money set aside in the savings account does not have to be used in the current year, unlike typical health care flexible spending accounts. Unused dollars and earnings continue to accumulate in the account for as long as you live and can be used to meet qualifying medical expenses later in life. This can even include premiums to pay for long-term care insurance. As a result, HSAs can play a role in helping you build a “health care nest egg” to help pay for medical costs later in life, including retirement.
That’s simply a perfect explanation of what an HSA truly offers you that is so great. There is always a chance that in the first year of switching to a HDHP that you will have to pay a large amount of money out of your own pocket, but after a year of putting money into your HSA you’re likely never to worry about paying the premiums out of your pocket again. Which in the long run is where the true savings lie.
