Okay, I applied for a high deductible policy through Humana. My daughter and I were approved, but my wife was denied due to a pre-existing condition.
So, if I establish and HSA, can I use money from the fund to pay for the wife’s (uninsured) medical expenses?
Also, is there any hope of private insurance for pre-existing conditions? I’m not sure of the exact reason for her denial. I do know that she smokes and was hospitalized for depression about 10 years ago (she got better), but let’s just assume she had a heart attack last year. Is there any hope of insurance?
Try to find out if your state has any special programs. I know in Michigan, Blue Cross Blue Shield cannot deny anyone coverage or jack their rates because of preexisting conditions. Last time I talked to them I asked “so if I have stage 4 cancer, you’ll cover me and my rates will be the same as everyone else’s?” and they said “yup.”
I do think there was a 6 month waiting period before they covered the pre-existing conditions, and from what I hear BCBS of MI isn’t the greatest insurance, but it’s something.
Pre-existing conditions, per HIPAA, go into affect 62 days after losing insurance. Depending on the policy, it can take 6-12 months before those"pre-existing" conditions will be covered. These affect group plans, and probably (although not certainly) individual plans. HSA’s aren’t affected, to the best of my knowledge.
Pre-existing conditions can be anything from the medication someone prescribed you for your allergies to depression to a sore throat. I’ve seen circumstances where CANCER has been denied as a “pre-existing” condition because there was a lapse of 62 days in between insurance coverages. It sucks.
So, that’s what I’ve got. (5+ years medical billing specialist)
Really? Is this insurance-company-specific or a federal statute?
I’m not doubting you but do you have a cite? I have an HSA and offer them to my employees (ok, my other employee) and that is an interesting thing to know if it’s true!
The best route for this is to get a job that will cover you for insurance. Like I know people that work in hotels for 20 - 30 hours as PBX operators or something else, so they can have insurance. They have other jobs, their goal is to get the insurance. Then when they get it they quit and go to COBRA which will cover for 18 months.
If the pre-exisiting condition is not something that could cause a need for emergency care you could try to get it excluded (i.e. accept that it will not be covered) which may work in some states. It didn’t work in Nevada tho. Then leave the country for any treatment.
I was recently visiting Nevada and needed surgery to remove an unknown lump in my chest. Cost in Nevada - about $5-7K. Here in Europe the total cost was $300… that is straight out of pocket with no insurance involved. This covered a total of 9 doctor visits (1 fairly major surgery and two follow up surgeries, plus lab work/pathology etc.)
Here’s a list from the American Diabetes Association for state high risk pools. It looks like Florida has something called the Florida Comprehensive Health Association, but it’s currently closed to new enrolees. I suggest you contact Humana and ask them about this program, they might have more information.
Are you referring to pre-existing conditions or the ability to pay for a dependent? In either case, your HSA is between you and the government, not your insurance company. Publication 969 (pdf) lists those for whom an expense may be paid on page 8. Generally speaking, it is you, your spouse and your dependents.
Eligible expenses for distributions are generally those which would qualify for the medical or dental expenses deduction. Publication 502 lists these. For the most part, if it looks like a medical expense, it probably is with the notable exception of cosmetic surgery. (Which of course is different than reconstructive surgery.) There is no mention of pre-existing conditions in either document. As long as the expense is incurred after starting the HSA, you should be OK.
IANA Tax Accountant, just a member of an HSA and a computer guy whose work requires him to be familiar with these things.
If you’re self-employed, you don’t even need an HSA as far as I know. We deduct everything medical-related that we pay for out of pocket. No fancy HSA required.
HSAs might be better - deposits are tax deductible, they earn interest, and can be used for any expense after age 65. Even hookers and blow. The only catch is that you have to have a high deductable policy. I think that’s a good idea - our deductible is $10,000 per person, per year, which is more than I could cover with my HSA deposits.
It seems like health insurance for smart people - you keep your money growing, but pay to make sure you don’t go bankrupt if/when a huge emergency arises.
Hmm… I’m still not seeing it. Being self-employed, anything we pay for medical expenses is tax-deductible already. I can put the cash in an interest bearing account if I want. We’re far from 65, so that’s not really important to us.
The difference is the high deductable insurance. If, Og forbid, one of you gets brain cancer or falls down the stairs, unless you’re doing extremely well, you won’t be able to keep up, particularly if you can’t work for awhile. There are also specialty policies, like if you take some high cost meds but are otherwise healthy, that have additional types of coverage, but these are more expensive.
Some people don’t spend enough on medical (and other things) to itemize. This way, even if you don’t itemize, you tuck this money away tax-free and use it for medical expenses. There is a limit - I think for families something like $5,300 per year. You leave it in there if you don’t spend it.
It’s actually hard to get enough medical expenses to itemize, unless you really have high medical bills relative to your income. Only medical expenses greater than 7.5% of your adjusted gross income are deductible.
I’m assuming the policy you’re talking about is for family coverage, right? For self-only coverage, the out-of-pocket cost (deductibles and co-pays) has to be less than $5,600 (in 2008).
That’s how I thought things worked; my medical expenses haven’t ever reached that level so the HSA works out well. I’m curious how Athena is deducting everything medical-related unless some type of incorporation for self-employed people helps? I’ve only dealt with my situation as a sole proprietor.
With my HSA, at least, I do get some medical coverage. So for the $200/mo I pay to be on an HSA medical plan through Medical Mutual, I do not have to pay cost (out of my HSA account) for medicine or doctor visits - Medical Mutual pays a good bit and that goes towards my deductible. I went for my annual gyno exam and also got a full STD/AIDS test and it was covered 100%.
No, we’re not incorporated. Both of us are just contract workers, nothing fancy. I’m just repeating what my accountant tells us. I’ll have to ask him about that 7.5% thing, maybe I’m misunderstanding something.
I do know that medical insurance premiums are deductible without meeting any minimum; that law changed a couple years ago, and we went over it in some detail with our CPA.
