Health Savings Accounts: A Benefit That You Really Benefit From

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Health Savings AccountsA Benefit That You
Really Benefit From

• Tiffany Jew, PharmD, MBA Candidate
• University of Southern California
• Pro Pharma Pharmaceutical Consultants, Inc

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Background on HSAs

• Signed into law by Bush in Dec 2003 to encourage
  Americans to be more judicious of their health
  care spending
• An account you put money into for future medical
  expenses
• Contributions are pre-tax and
• that untaxed money can be used
• for anything health related
• Must be paired with an HSA-qualified
  high-deductible health plan (HDHP)

The Department of the Treasury
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How HSAs Work

• Deductibles typically more than 1000/yr
• HSA annual contribution deductible, max 2850
• Unused money rolls over and grows tax free
• HSA used for most medical expenses deductible,
  Rx, OTCs, and even services not normally covered
  by health plan
• Accounts are portable
• Almost anyone qualifies, except
• Medicare
• Other insurance
• Claimed as a dependent

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Individual Plan Quote 40 y/o Male, Northridge
Kaiser HMO Kaiser HDHP-HSA
Plan Name 25 Copayment Plan 30/2700 Deductible Plan w/HSA
Monthly Premium 285.00 138.00
Deductible None 2,700 
PCP Visits 25 Copay  30 Copay after deductible 
Prescription Drugs Generic 10 Copay Brand 35 Copay (after 250 drug deductible)  Generic 10 Copay after deductible Brand 30 Copay after deductible
Hospital 200 Copay per day  30 Coinsurance per admission after deductible 
From eHealthInsurance Quotes
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Why You Should Enroll

• Improves the health care system
• Save for the future
• Avoid getting taxed legally
• Use the money when you want and how your want
• No risk in losing
• money

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Expanding Coverage and Lowering Costs

• Enrollment has tripled
• From 1 million in March 2005 to the more than 3
  million reported in January 2006
• Lower premiums make health insurance more
  affordable reduces the uninsured
• 1/3rd who signed up last year were previously
  uninsured
• 1/3rd of small business offering HSAs did not
  offer previously health insurance
• Health care spending will be more judicious
• Encourages competition and efficiencies

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Increase Your Savings

• Lower premiums help you save
• Tax benefits
• Contributions are pre-tax
• Interest grows tax free
• Money used for legitimate medical expenses also
  not taxed
• Out-of-pocket spending increasing
• Estimated to increase to 440.8 billion by 2016
  from 250.6 billion in 20061
• Fidelity Investments estimates that the average
  couple going into retirement will spend 190,000
  in health care expenses not covered by Medicare

1. Zhang/Fuhrmans, Wall Street Journal, 2/21/07
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Savings from an HSA-HDHP
http//www.americanhealthvalue.com/
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Flexibility and Control

• You decide how much to invest, when to use it,
  and what to use it for
• Use money towards medical expenses that not
  normally covered
• Nutritional counseling
• Weight loss programs
• LASIK eye surgery
• You own the funds even if you switch jobs, health
  plans, or become unemployed

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HSAs Work!

• Controls Costs
• A study of South African employees covered by
  Discovery Health Medical Savings Accounts
• 56 reductions in young families
• 47 reductions in elderly
• Preliminary US studies show less wasteful
  consumption, more use of generics
• Preventative Care Still Happens
• Aetnas HRA plan showed 30 increase in
  preventive care office visits
• Delfinity Healths HRA plans showed preventative
  care that met or exceeded widely-accepted
  standards of care

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Thank You