Does anyone have info on the new Medicare savings plans

[Betty]

I read that included in the Medicare overhaul bill is a provision for people with high deductable policies to put away pre-tax dollars to help pay medical expenses.
I am self employed and already have a medical savings account, but this sounds like a better deal. I have a huge deductible (the only policy I can afford) and had some surgery and other medical expenses this past year that set me back $4000. (That's what they wouldn't cover.)
If anyone knows more about this, I would be grateful to hear about it.

[ewagner]

1. I sell health insurance

and I have received notices and software from two of my companies that they are starting up medical savings accounts and new, high-deductible products. The interesting thing about it is that it can now be done by INDIVIDUALS and not just self-employed.

Private health insurance companies are on this like the proverbial ugly on an ape I'll be attending marketing conferences on it in a few weeks. Hope to know more about it then.

on edit: a couple tidbits.......for individuals, the new MSAs are tax deductible and, if used for a qualified medical expense, not taxable on withdrawal. No info yet on the "use-it-or-lose-it" nature which has always been the drawback to MSAs.......if you already have a Section 125 qualified plan, there may be no additional benefits to this.........

[jenm]

2. Here's some info from the IRS fact sheet:

HSAs are similar to medical savings accounts (MSAs). However, MSA eligibility has been restricted to employees of small businesses and the self-employed. HSAs are open to everyone with a high deductible health insurance plan. The only limitation on the health plan is that the annual deductible must be at least $1,000 for individual coverage and at least $2,000 for family coverage.



Contributions to the HSA by an employer are not included in the individual's taxable income. Contributions by an individual are tax deductible. Individuals, their employers, or both can contribute tax-deductible funds each year up to the amount of the policy's annual deductible, subject to a cap of $2,600 for individuals and $3,150 for families. Individuals aged 55-64 can make additional contributions.


The interest and investment earnings generated by the account are also not taxable while in the HSA. Amounts distributed are not taxable as long as they are used to pay for qualified medical expenses, such prescription and over-the-counter drugs and long-term care services as well as the purchase of continued health care coverage for the unemployed individual (via COBRA). Amounts distributed which are not used to pay for qualified medical expenses will be taxable, plus an additional 10% tax will be applied in order to prevent the use of the HSA for non-medical purposes.



HSAs are portable, so an individual is not dependent on a particular employer to enjoy the advantages of having an HSA. Like an individual retirement account (IRA), the HSA is owned by the individual, not the employer. If the individual changes jobs, the HSA goes with the individual.



In addition, individuals over age 55 can make extra contributions to their accounts and still enjoy the same tax advantages. In 2004, an additional $500 can be added the HSA. By 2009, an additional $1,000 can be added to the HSA.

[Betty]

5. Thanks

That is very useful. Would be nicer if we had universal coverage for everyone but I don't expect to see that happening in my lifetime.
My expectation is that the government is going to force us all to be very self-sufficient , even more than we are now. I am not counting on any social security to speak of because I am certain that we are going to be paying for this mess that bush is creating now. He'll be long gone when the fiscal shit really hits the fan, and the simpletons who love him now won't be able to connect the dots, if for no other reason than tiny attention spans.

[madfloridian]

3. Ask those who already have good coverage what will happen.

That is the saddest part. Why should this bill cause them to drop those of us who already have coverage as retirees from our employers..which we pay for.

Sounds like insurance people will be very happy over this, while those of us with good insurance and drug coverage already will be dropped.

[ewagner]

4. Haven't seen

anything to indicate that there is an incentive by any companies to "drop" coverages.....at least, not yet..........

the real ringer is that nobody REALLY knows what was in that monstrosity of a bill.........

[madfloridian]

6. Yes, there is no incentive NOT to drop us.

We each pay 200 a month. The congress in its wisdom decided to subsidize the companies to keep us at the tune of 88 mil the first year.

Now let's be sensible....all they have to do is pass a law that they can NOT drop us.

The insurance companies will be getting double dips on those of us who have insurance and drug coverage already.

I am waiting for the Alliance for Retired Americans site to get back online to check out the latest indignities. They keep track there of everything. They have had a huge influx of AARP dropouts.
I talked to them last week,and they are having a hard time getting all the news folks in the system....and it is our goal to keep sending people.
www.retiredamericans.org

If they are not back online Monday I will call them.

This bill was nothing except a nice gift to the insurance industry. Shame on our country for doing this to us.