Health Maintenance Organization vs. Health Savings Account Essay

Health Maintenance Organization vs. Health Savings Account - Essay Example Contributions to the plan are tax deductible and interest can effectively be accrued whilst the plan operates on a 'roll over' basis. The first point of view we shall look at here is from someone who opted for the Health Savings Account health plan. The individual here was actually in their mid-twenties and decided to take out the HSA plan at this relatively early stage in order to build a suitable sum of money that they could use to cover health costs at a later stage. However, less than a year later they found themselves in a position where the money was needed. The medical bill they incurred amounted to approximately $2000, however, due to the nature of the plan they were only liable for around 1400 of that. In addition, their employer had thus far contributed $560 and the remaining $840 could be deducted from taxes. Overall the individual only had to pay $168 on top of the annual premium which, given the circumstances, they felt was a good result. Moreover, the individual was imp ressed by the fact that the money could effectively cover aspects such as prescriptions, glasses and even visits to the dentist. The second account we shall deal with here also comes down on the side of the HSA plan as far as saving money is concerned. Their main point is how the fact that the contributions to the plan that are deducted from an individual's wages are actually done so at the pre-tax stage.