Despite Americans finding it increasingly difficult to meet rising healthcare costs, many health plans are offering less choices.  We must give workers more control of their own healthcare needs.  "Health banking" allows individuals to manage some of their own healthcare dollars and save for future needs.

That is why I am a strong advocate of Health Savings Accounts (HSAs).  HSAs work because they give the power of the market place to consumers.  Individuals can shop around for the care that best fits their need, for the best price.  Healthcare decisions are made by the patient not by third party insurance companies.  When consumers consider costs in their decision-making process, the market reacts, and costs come down.

Contributions to HSAs can be used tax-free to pay for qualified medical expenses. HSAs are also portable.  Assets belong to the individual can be carried from job to job and into retirement.  HSAs can be used during retirement to pay for retiree healthcare, Medicare expenses and prescription drugs.  HSAs provide significant benefit to seniors without employer-provided healthcare in retirement.  Individuals can also make catch-up contributions.

When HSAs first became available, more than a third of those who bought them had been uninsured previously.  In fact forty percent of those who have HSAs have yearly family incomes below $50,000,

I, along with the majority of Congress created HSAs in 2003.  And recently, Congress made health HSAs more attractive by substantially increasing the tax-free amount that Americans can contribute to them.

The annual HSA contribution limit in 2007 for individuals with self-only coverage is now $2,850; for family coverage, it is $5,650.  Individuals who are at least 55 years of age, but not yet in Medicare may contribute another $800.  For 2007, the deductible for self-only coverage was $1,100 (with an annual out-of-pocket limit not exceeding $5,500); the deductible for family coverage is $2,200 (with an annual out-of-pocket limit not exceeding $11,000).

Distributions made for any non-medical purposes are subject to income tax and a 10% penalty. The 10% penalty is waived for distributions made by individuals age 65 and older.  Money remaining in a Health Savings Account may transfer to a surviving spouse tax-free, and the funds can become part of your estate.  Rollovers are allowed from Flexible Spending Accounts and Health Reimbursement Accounts into HSAs.