Expensive health insurance premiums are increasingly being replaced with healthcare plan such as the High Deductible Health Plan (HDHP), particularly when used along with the Health Savings Account (HSA).
Many employers are also now offering this option of health care, and as per America’s Health Insurance Plans (AHIP) “The number of people with HSA/HDHP coverage rose to 10 million in January 2010, up from 8 million in January 2009, and 6.1 million in January 2008.”
The HSA is a pre-tax account, which many use to build up a fund for medical expenses instead of opting for insurance. Rather than pay the premium to an insurance agency, they pay over the money to this account, which can be used to cover qualified medical expenses such as dental, eye care, prescriptions etc.
There is a ceiling of the maximum yearly deposits that can be made to this account. The most important part of this plan is that even when you make the deposit, this remains your money and does not get paid over to an insurance or other agency.
Since this is a pre-tax accounts, your tax liability is lowered as well and there are several other benefits of this medical plan too.