Is an HSA Right for Me?

As HSAs continue to grow in popularity, a lot of people want to know, how do I decide if an HSA is right for me?

Three Types of Health Care Consumers

Well, if you think about it, there are three types of health care consumers:

1. Low Utilizers

At one end of the spectrum, you have low utilizers who rarely use their health insurance benefits.

An HSA allows them to:

  • Save money by paying a lower premium

  • Use some of that savings to pay for other expenses with tax-free dollars, rather than sending it to the insurance company

For these folks, an HSA is really a no-brainer.

2. High Utilizers

At the other end of the spectrum, you have high utilizers.

Because all expenses on an HSA-qualified plan apply to the deductible and out-of-pocket, these folks often end up spending less over the course of the year than on a traditional plan.

You can have the same out-of-pocket protection on an HSA-qualified plan as you do a traditional plan, but:

  • With an HSA, you pay a lower health insurance premium

  • And you can pay for eligible expenses with tax-free dollars

3. Medium Utilizers

In the middle, of course, you have medium utilizers.

It’s not always clear for this group, but:

  • After factoring in the premium and tax savings

  • A medium utilizer often ends up benefiting from selecting an HSA-qualified plan

HSAs Work for Many People

Since an HSA is right for so many people, HSAs have continued to grow regardless of who’s in office.

Smart Consumers Compare Options

It’s not enough, though, to just have a health savings account.
The most successful health care consumers are those who are:

  • Willing to compare their options

  • And go outside of the health plan when necessary if they find a better deal