Health Insurance Costs to Rise Sharply in 2011

Health Insurance Costs to Rise Sharply in 2011

A Coping Strategy for the Healthy

With open enrollment season just around the corner, this may be the year to consider a high deductible health insurance plan that you can then pair with  a Health Savings Account. More firms are offering these plans; if you are in relatively good health, you can reduce your premium by opting for a high-deductible plan. For this year that means a family deductible of at least ,400, or ,200 for an individual policy.

Once you enroll in a qualifying high-deductible plan you’re then eligible to contribute to your own HSA. You get a tax break on contributions into the HSA and withdrawals used to pay for medical expenses are not taxed. The maximum family contribution to an HSA this year is ,150. (,050 for individuals.) The maximums for 2011 have yet to be announced; they probably won’t budge given the low general rate of inflation.

You can also let the money sit in the HSA and grow; unlike a flexible spending account there is no “use it or lose it provision.” Your balance can be used for future medical expenses decades from now. Or once you turn 65 you are free to use your HSA balance for anything. though you will owe income tax on your withdrawals. Just like with a Traditional IRA.
Well, there’s one area where deflation will definitely not be at play in 2011: health insurance.  A survey of large businesses reports that employers expect their health care insurance costs to rise by an