A new option for uninsured Alaskans: Health Savings Accounts provide numerous financial and tax benefits.

• Author: Orr, Vanessa

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With health care costs rising every day, both individuals and businesses are scrambling to find affordable health insurance options. While politicians often talk about the issue of universal health care, the fact is, seeing a plan come to fruition is probably years away if it happens at all.

According to current estimates, U.S. health care spending is approximately 15 percent of the GDP--the highest in the world. Despite this, only 84 percent of the population has health insurance, whether provided through an employer, bought individually, or as part of a government program. Between 2005 and 2006, the number of uninsured citizens nationwide increased from 44.8 million to 47 million.

Health insurance costs are hurting employers too. On average, employers spend between 4.6 percent and 8.7 percent of their payroll in health insurance premiums. According to a study by the Kaiser Family Foundation, the cost of health insurance is rising faster than inflation of employee wages, increasing 78 percent since 2001. During that time, inflation rose by 17 percent and wages rose by 19 percent. Because the United States is the only wealthy, industrialized nation that does not have a universal health care system, it is up to individuals and employers to find their own insurance options.

HEALTH SAVINGS ACCOUNTS

One alternative, the Health Savings Account (HSA), is steadily gaining in popularity across the country. Signed into law as part of the Medicare Prescription and Modernization Act of 2003, HSAs became available to everyone who does not have another insurance plan, or who is not on Medicare, as of Jan. 1, 2004. Although similar Medical Savings Accounts (MSAs) preceded HSAs by a number of years, they were only available to those who were self-employed.

"One of the reasons that HSAs are gaining in popularity is because of their affordability," explained Ellen Laden, director of public relations for Golden Rule Insurance Co. "People also like them because they offer tax savings, and they give the consumer control over their own health care spending."

"Health Savings Account participants are positioned to take on more control and responsibility toward how their health care dollars are spent," said Matt Schnug, ODS Alaska & Delta Dental regional marketing manager. "This, combined with higher deductibles, tax-advantaged contributions and the ability to carry over savings not withdrawn from year to year, equates to lower monthly...