Health Insurance is Expensive… but HSAs and ACA Assistance Really Help

Buying private health insurance is expensive with or without assistance, but an HSA and the ACA’s tax credits and out-of-pocket cost assistance can really help.

Since this is true, it necessarily means that every American of a moderately high income or lower has a way to leverage the current tax system to reduce their medical costs.

With tax credits and out-of-pocket assistance, it is obvious. You take the credits and reduce your costs (even better if you also have some funds to put in an HSA).

With low incomes, it is simple. You qualify for Medicaid (if your state expanded at least).

With higher incomes, you essentially either are taken care of through work (which can still be very expensive, but you are getting benefits) or you essentially must utilize an HSA.

An HSA, or health savings account, is a tax advantaged savings account that is tax free in and tax free out. That is essentially the best tax break any normal person can get. The condition is that you have to spend dollars in that account on medical expenses.

Here is the deal though, your HSA is an investment vehicle. If you are a good investor, or can pass the management of your HSA off to someone who is, then you can fund your HSA, save money on taxes, grow your money via investments, and then use that for medical expenses.

There is nothing more satisfying than earning money on your healthcare provider’s public stock in your HSA and using that money to pay for health expenses… at least when it comes to dealing with dollar signs and healthcare.

Using the tools you have available to you, that is tax credits and HSAs (or taking advantage of your employer’s version of these things), takes some of the pain out of the cost of health insurance premiums and out-of-pocket costs.

If after all this you still have trouble with costs, then you are in the same boat as most of us. This trouble of costs, even after subsidization (be it by your employer or the government or yourself via an HSA) is the healthcare crisis that the ACA tried to fix.

We still have a healthcare crisis, but while Congress is busy avoiding having to fix it, we should all take advantage of the system we have. That means [as a rule of thumb at least] those with access to credits should take them and those with ability to fund an HSA should do so.

In short, while healthcare is expensive, it is substantially more expensive if you don’t take advantage of the tax breaks and credits at your finger tips.