Health Care’s New Paradigm – The HSA

The HSA, or Health Savings Account, will revolutionize health care as we know it. The HSA will give the health care consumer ultimate control. The concept of freedom of choice, once limited by insurance carriers to control costs, will see a revival as patients, working together with their physicians, begin once again dictating the course of their own health care.

Cost containment will become a reality as more and more consumers realize what actual health care costs are. Consumers will begin to use only the services that they want and to search for the prices that are competitive.

All health care consumers covered by a high deductible health plan, or HDHP, not covered by another health plan, and not eligible for medicare benefits can establish an HSA. This means that sole proprietors, partners, employees, unemployed persons, ie a vast majority of the population, can establish an HSA.

The IRS has already published notices on how to treat these tax exempt savings accounts. Insurance carriers have researched and produced the HDHPs needed for HSA elegibility. Medical Savings Account administrators/trustees have changed over from the less desirable MSA to the extremely flexible HSA. Change is Coming!

The HSA became a reality on January 1, 2004 and has already become a growing movement. Government subsidies in the form of the mighty tax savings dollar, coupled with millions of cost conscious consumers has created a tidal wave of interest. The HSA is here. Welcome to the HSA era! Contact info: Clifford Chinn may be reached at

Health Care’s New Paradigm – The HSA By Clifford Chinn CC Financial Services Los Gatos, California On December 8, 2004 President Bush signed into law the “Medicare Prescription Drug Improvement and Modernization Act of 2003”. Ironically, health insurance and health care plans will undergo a paradigm shift due to the ramifications of a small unpublicized section found in that act. The creation of a new Internal Revenue Code sec223, described as a “tax incentive for health and retirement security”, gave rise to the HSA.

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