Anybody have any experience with HSA's (Health Savings Accounts)?

[BlueJazz]

My Health-care-provider is thinking about changing their system and I'm wondering if it's truly a "Good Thing" to join a HSA system.

[DrDan]

1. I started an HSA this past year.

I cannot think of any reason not to do so - if are qualified. I regret having waited so long.

[rzemanfl]

2. These are different than a cafeteria plan, right? My insurance

always tells me they got some huge amount knocked off a provider's bill (which is smoke and mirrors, dog and pony show, etc.) But if you are paying from a HSA do you end up paying the inflated bill?

[gulliver]

3. I have been in HSAs for about three years.

It has been a fairly good deal for me. Cost savings, minimal hassle. I think it is a good deal for healthy people who can take advantage of the tax savings. The premiums are rock bottom because the deductible is so high (in my case about $2500). Then you can contribute up to the deductible each year to your HSA and pay no taxes on that money, similar to but not as good as an IRA (more below). That tax savings alone pays about four months of my already-low premiums.

Considerations:
1. You are still part of a health care network, so your costs (which you pay from your HSA up to your deductible) are network costs, not retail. I had some testing done that retailed for about $600 on the bill, but the network cost ended up being about $100.

2. Same with drugs. I have a card that gets me discounts at Walgreens.

3. One problem I had was with the $600 testing procedure. The hospital looked up my deductible and saw it was high, so they asked for pre-payment of part of the $600. I don't know that I had to do it, but I just paid them the $600. Then when the network cost ended up being only $100, I had a hassle getting the hospital to refund me $500, which they eventually did.

4. My HSA makes a truly pitiful interest rate. Really insulting. And the HSA provider charges a fee. The fee cancels out the earnings on the money I put in (a little over my deductible). I have no choices in how the money is invested. That stinks.

5. You can use the HSA money for things like Lasik, over the counter drugs, and a bunch of other stuff that might not be covered by a health plan or flexible spending account (FSA).