While the current administration continues to work through their collective plan for tweaking the Affordable Care Act, the consistent theme from those in charge revolves around the idea of personal savings accounts for healthcare expenses.
Many folks remember the days of company funded pension plans and the slow transition away from them into individual funded plans, like IRAs and 401K plans. The same thing is happening in health care now with a shift toward Health Savings Accounts or “HSAs”. While these plans are not new, and in fact most employers have at least looked at them, they may quickly become the norm.
In the new HSA environment, employees will be responsible for saving money into their own personal accounts to help pay for medical expenses they may incur. And while employers may contribute to these accounts, the ultimate responsibility belongs to the individual. This philosophy is the basis for what is being proposed by the current administration. By providing individual savings accounts and the accompanying tax breaks for on the monies that fund them, the hope is that people will make smart decisions on where to direct their health care dollars. Ultimately, the goal is that with this new found attention to how your health care dollars are spent, consumers will become more savvy and help drive down the costs of health care.
While this may seem like a huge undertaking, make no mistake this trend is coming. Those who have been setting aside money into 401Ks to prepare for retirement will experience a sense of deja vu as they are once again forced to set aside money on their own, but this time for health care expenses. Be on the lookout for the forthcoming plan from the administration and notice who will be bearing the responsibility of bending the cost curve and saving money, you.