Advantages of Health Savings Accounts for Seniors

Expensive medical treatments can be required at any stage of life, but aging seniors experience a preponderance of medical procedures needed to offset physical decline that naturally attends age. According to the World Health Organization (WHO), roughly 75% of deaths in people age 65 over who live in industrialized countries occur from:

  • heart disease
  • cancer
  • cerebrovascular disease (e.g. stroke)
  • Osteoporosis due to falls and broken bones

The palliative or therapeutic approach for many chronic maladies can cost millions of dollars for a single patient. This is why many health insurance policies cap the total payout for individual policies in the low millions of dollars, if not less. Whether you have a degenerative disease like muscular dystrophy or an ailment like the flu, after you’ve spent the maximum payout for your policy, you are on your own.

If this were to occur, you needn’t resort to visiting clinics where you wait hours, searching for a physician who offers a sliding payment scale and charges you a flat amount based on your earnings, or head to a university hospital where you’re examined by interns instead of experienced physicians.

These aren’t necessarily bad options if you’re in a pinch, but a better option for seniors who have a fixed income and are covered by a High Deductible Health Plan (HDHP) is a health savings account (HSA), which you can own and control as a private individual. 

Benefits of Health Savings Accounts    

For many, the greatest benefit of HSAs is the autonomy to handle the accounts personally. For patients under 65, expenditures from HSAs must be used to pay for qualified medical expenses. As long as HSA funds are used in this capacity, a HSA yields the following important advantages, among others, that benefit patients directly.

Funds aren’t exposed to federal income tax at the time of deposit.  

HSA funds roll over and accumulate yearly if not used.

Dividends earned from HSA funds are tax-free.

HSA funds help prevent situations such as selling property to pay medical bills.

HSA funds can be used for any purpose if you’re 65 or older.

Using HSA funds to cover big medical bills helps preserve your estate.

According to Wikipedia’s entry on health savings accounts, “Among individual plan holders, 51% were under age 40, and 49% were age 40 or over.” Although HSAs are commonly associated with older patient populations, you needn’t wait until the golden years to make significant contributions to a HSA.

According to Kiplinger, “You can contribute up to $3,350 if you have individual coverage or $6,750 if you have family coverage in 2016, plus up to $1,000 if you’re 55 or older anytime during the year.” Furthermore, “Your contributions are pretax if made through your employer or tax-deductible if you’re on your own, and you can use the money tax-free for medical expenses in any year.”

Interested in Health Savings Accounts? 

The earlier you open health savings accounts, and the more frequently you make deposits, the more money you’ll have when you need it most. American Eagle Credit Union proudly offers HSAs. 

To learn more about HSA eligibility requirements and availability of funds from HSAs, call us today at (800) 325-9905, or send us an email through our contact page

 


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