Many missing out on health savings accounts

Humberto Cruz, a columnist for Tribune Media Services

They won't magically solve the problem of rising health-care costs, and they won't work for everyone. But more Americans should become familiar with health savings accounts, or HSAs.

Few are. A survey by the Kaiser Family Foundation in February found that 45 percent of Americans said they had not even heard about HSAs, which have been available since 2004. Another 24 percent said they had heard about HSAs but did not know what they were.

HSAs are tax-advantaged accounts that allow people not eligible for Medicare to set aside money for health-care costs. To be eligible to open an account under government rules, your only health insurance must be a high-deductible policy.

For 2006, the deductible must be at least $1,050 for single coverage and $2,100 for families. Nearly 3.2 million Americans were covered by HSA-eligible policies as of January, according to the industry group America's Health Insurance Plans.

The idea behind HSAs is that, by accepting a higher deductible, you can lower your premium. Then you set aside money in the health savings account. The funds are portable if you change jobs and can be rolled from one year into the next.

Proponents of HSAs say they encourage consumers to shop wisely for medical care and drive down costs. Opponents say they only benefit the young, well-off and healthy, and may discourage people on tight budgets from seeking needed care.....for more of the story from the Chicago Tribune