June 23, 2024

Michigan Affordable Health Insurance is accomplished with Health Savings Accounts. Health Savings Accounts, also known as HSA’s, were originally offer to a limited number of self employed individuals and to groups only. Today they are offered to anyone that is not on medicare. There are also special Advantage HSA plans for those on Medicare. The idea behind these plans was to make individual more responsible for health care costs.

The traditional health insurance plan in the past gave the individual a virtual blank check. There was no reason, nor incentive for one to ask price or even if a test or procedure was necessary. Because the patient was not directly paying the bill, he did not ask if there was a less expensive alternative nor did he or she shop around for price. Since an HSA plan is required to be a high deductible plan, it requires the patient to pay the first $1500 or more from his own pocket. This encourages one to ask cost containment questions.

The way that these plans save is by allowing one to put money away specifically for health related items tax free. An individual can avoid taxes on $3000 per year and a family up to $5950 for year 2009. This, by the way, increases a little each year do to inflation.

The way to estimate your tax savings is to add your tax rates for State, Federal, Local Tax, Social Security Tax and Self Employment tax for the self employed. For example, lets say your Michigan tax is 5.5%, Social security tax is 7.5% and you are in the 28% tax bracket for Federal. That is 41% total. And if you are self employed add another 7.5% for self employment tax. Then you have a total of 48.5% tax savings.

When you get your online price quote for Michigan personal Health Insurance you can see for yourself if the lower price of an HSA plan, really does save you money. Remember, on a traditional health plan you will have a higher cost for plans that have a $25 copay for office calls and a copay for prescriptions. When you take this into consideration, is it really a good idea to pay a higher premium when you still have to pay a copay. It makes more sense to pay a lot lower cost for your insurance (cbdweeds.co.uk) and get in effect, a 41% to 49% discount (and maybe even more, depending on your tax bracket) on your health care expenses.