Downsize DC’s full-time employees have their own Health Savings Accounts (HSAs), and when you see what they’ve done for us, you may want one too.

HSA plans cover our employee’s health care expenses through a combination of major medical insurance and a tax-free savings account (which benefit from Einstein’s most powerful force in the universe!). Our employees…

• Don’t pay taxes on the money deposited into their HSAs, or on the interest they earn from that money.
• Use debit cards to pay for basic medical expenses out of their HSAs.
• Have insurance coverage for major expenses above the annual amount they can legally deposit in their HSAs.
• Don’t risk losing coverage if they change jobs. They own their insurance and their HSAs.

In addition to these benefits, other amazing things happened when we switched to HSAs…

• Our costs dropped by more than 30% per month.
• The insurance industry and the government started getting less of our money, and our employees got more.
• Our employees became cost conscious.

Every dollar our employees don’t spend gets to stay in their HSAs, accumulating compounded interest tax free! This motivates them to make more frugal use of health care services, and to ask providers for a better price. Here are two examples…

EXAMPLE #1:

A doctor wanted one our employees to get an expensive MRI. Our employee told the doctor he would be paying for the MRI out of his HSA, and asked how much it would cost. The doctor gave a shocking reply: “Well, I think we can skip the MRI. You don’t really need it.”

This doctor was willing to order the test when he thought someone other than the patient would pay for it. Many other doctors behave the same way. If more people had HSAs fewer questionable procedures would be conducted, and the total demand for medical procedures would drop. Lower demand would lead to lower prices!

But the widespread use of HSAs would also lower costs in other ways. Consider…

EXAMPLE #2:

One of our employees needed a blood test. He was going to be spending his own money out of his HSA, so he shopped around for prices. A few simple phone calls enabled him to get more things tested for half the price!

The fact that he was spending his own money motivated our employee to get better care at less cost!

We strongly urge you to make HSAs a central part of your personal plan for health care reform…

• If you’re self-employed, consider getting an HSA policy, or . . .
• If you have insurance through your employer, ask them to consider switching to an HSA.
• We found our HSA plan here.

The politicians claim they want to…

• Make health insurance more affordable (HSAs do that!)
• Protect people from losing their insurance if they change jobs (HSAs do that!)
• Lower health care costs and improve quality (HSAs do that!)
• Balance the way taxes impact those who have health insurance through their employers versus those who must buy insurance directly (HSAs do that!)

The outcomes the politicians claim they want could be better achieved by expanding and improving HSAs. But instead, the politicians want to…

• Spend more,
• Borrow more,
• Tax more,
• And reduce consumer choice by placing more bureaucratic controls over the kind of health care you can receive.

Even worse, some proposals in Congress would actually harm HSAs, or even abolish them!

In addition, some in Congress want to to start taxing employer-provided health benefits. They say it’s unfair that self-employed people have to buy health insurance with after-tax dollars, while those with employer-provided health insurance get a tax-free benefit. They’re partly right — it is unfair, but . . .

Congress could fix this problem simply by expanding the amount of money people can deposit into Health Savings Accounts. This would put employer-provided and self-provided health insurance on the same tax basis.

Please use DownsizeDC.org’s Educate the Powerful System to ask your Congressional employees to protect and improve HSAs. You can send your letter to Congress here.

Use your personal comments to tell Congress they should expand the tax free HSA deposit limit to something like $8,000 for individuals, and $16,000 for families. This would allow those who have self-funded HSAs and major medical policies to get the same tax treatment that employer-provided health insurance now has.

Via DownsizeDC.org