Question: Am I a good fit for an HSA?

My employee sponsored health care plan is about to kick in but that means I have some decisions to make... I work for a small company that will cover the first $200/month of the plan of my choosing. My husband does not currently have health care through his work (our short-term insurance will expire right around the time my employer starts paying for part of our new plan). I know it's unlikely that $200 will cover all of even a high-deductible plan, but we'd like to get dang close. We're considering a high deductible plan coupled with an HSA, but are nervous that this will create incentives for us not to schedule preventative doctor appointments.

Another kicker is that our money is spread so thin right now (10% to IRAs, 4% to a 401k, 10% to down payment fund -- it starts to add up!) that I'm worried we won't have much left over to put into an HSA. Even though we don't make a ton to begin with, we are very healthy, young people with fairly active lifestyles which I know helps our situation.

Do we sound like an HSA is a good fit for us or is there something else we should be considering?

Response:

Earlier versions of high-deductible/HSA plans didn’t cover basic preventative care. Insurers and employers quickly realized that they had set up a perverse incentive so many plans have changed the terms of the contract to include full coverage for certain preventive care services, like routine physical exams. I would check the plan option you’re considering, but my guess is the health plan will encourage not discourage this important aspect of health care.

Money is tight, isn’t it? While $200 helps, it isn’t much, either. Still, you want you and your husband to have health care coverage and if the high-deductible HSA is your most affordable option for now I would take it. You don’t want to be without health insurance even if you’re healthy at the moment. In essence, the plan offers catastrophic insurance. You’re out of pocket, which will hurt financially, with minor to semi-major ailments. But you should avoid a financial disaster if something more medically serious—and expensive--strikes you or your husband.

One other thought. I would pay attention to the evolution of the health insurance exchange in your state. Come October the new state health care marketplace will open for business, an institutional innovation that holds the promise of creating a healthier insurance market and perhaps improve your choices. It will take time for the exchanges to work out the kinks, however, and for employers and their consultants to understand the business.  

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