THE YOUNG AND THE RISKLESS

Sara and Travis are young, healthy, and saving a boatload of money on health care with a high-deductible health plan

SARA SCHRYER WALKS TO A SHADY spot in the back corner of her garden in Jacksonville, Florida, and just a few feet from her wooden stockade fence, reaches down for a closer look at one of her year-old camellias. She’s a bit concerned.

The variety, known as Colonel Fiery, can be spectacular, with an abundance of dark red formal blooms and oval, glossy leaves. Because it flowers from mid- to late winter, it can be a welcome addition to an otherwise colorless garden.

But camellias can drive a gardener to frustration. And Sara’s, including her Colonel Fiery, aren’t in peak condition. Sara says they can be sensitive to cold, so you have to take care to cover them during a frosty night.

“This is their first flowering season outside of a pot and so far they are not doing too well. While I have a lot of buds, very few seem ready to open, and some of the flowers that have bloomed have been small and messy.”

Sara learned about camellias from her grandfather, John Bowen, who passed away in 2009.

“They were a passion of my grandfather and he shared it with me,” she said.

Bowen had a collection of camellias in his backyard that he trained into trees. He had anywhere from twenty-five to forty different camellias at a time, and he was interested in grafting together different varieties to see if a new hybrid could be made.

“He was lucky a few times and named a particularly delicate and beautiful camellia, Lady Gwendolyn, after my grandmother. It was never formally registered so it cannot be found if [you’re] searching for one, but he did manage to make a few smaller cuttings and now my dad and uncle have a few Lady Gwendolyns blooming in their yard.”

Sara travels a lot, both for her job, at CSX Transportation, and for leisure. When I spoke with her, she was recently back from Houston, and days away from a ski trip to Breckenridge, Colorado. Later in the year, she and her husband, Travis, are making their first trip to Italy, a two-week vacation with stops in Rome, Venice, Florence, and Sorrento.

“We love traveling,” she says. “Every month we try to do an out-of-town trip.”

But whether she’s on a trip or out in the garden, she doesn’t think much about visits to the doctor. She doesn’t have to; she’s healthy and has an advantageous health care plan I love called a “health savings account” (HSA).

I asked Sara if she would help me tell you about health savings accounts, which she and Travis have had for about six years and have been very happy with. And I’m happy to say that she agreed.

Sara, thirty, goes to the doctor three or four times a year. Travis, also thirty, goes once or twice. That means they don’t spend a lot on medical care. So instead of paying a ton of money in premiums for a traditional health insurance plan, Sara has an HSA.

What exactly is a health savings account? It’s a tax-free savings account that’s generally paired with a high-deductible insurance policy to provide affordable health coverage.

Sara’s HSA, which she gets through her employer, has a monthly premium of just $90 for both her and Travis.

“We are relatively young and healthy, and after costing out our various appointments needed during the year plus the cost of the plan, we found it to be the least expensive,” Sara said. “I think the next plan up was around $160.”

The downside to HSAs is the high-deductible insurance, which is intended primarily to protect people against the cost of catastrophic illnesses, like cancer, or injuries that might require surgery. So it doesn’t cover routine doctor visits.

People with HSAs, like Sara and Travis, put the money they save on monthly premiums into a tax-free savings account, and use the money that builds up in the savings account to pay for the occasional doctor bill.

Sara’s plan has a $3,800 deductible per year. That means insurance doesn’t cover anything unless the couple’s medical bills in a year top $3,800. After that, the insurance pays 85 percent of their medical costs. If their out-of-pocket costs hit $8,000, that’s the limit. Everything else is covered at 100 percent for that year.

But the nice thing is that CSX softens the blow for Sara and Travis by depositing $2,400 in their HSA at the beginning of the year. So unless their medical bills top $2,400, they pay nothing.

Sara and Travis also put $250 a month into their HSA. That adds up to $3,000 a year, money they can use to pay medical bills and for which they get an income tax deduction. And the money is theirs, so it can grow over time into a nice investment account.

“The $250 a month is to build up money to pay for future health care and it is also an investment,” Sara said. “We have roughly $7,000 in our account.”

Sara also doesn’t have to worry much about whether a doctor is in her network.

“We feel like it gives us more control in deciding which doctor we want to see and when. We don’t need a referral to go see a dermatologist or podiatrist; we just research them online and go.”

HSAs are not for everyone, but can work very, very well to hold down health costs, provide excellent coverage, and offer affordable premiums. I encourage you to give them some thought.

At CSX, Sara is responsible for overseeing the movement of coal to river terminals, where it is loaded onto barges. Once the coal is loaded, it can be delivered to a variety of places, such as steel mills, utility companies, and other smaller industrial companies, and for export.

When she’s not traveling for work or leisure, or caring for her flowers, Sara enjoys watching football. She and Travis root for their hometown NFL team, the Jaguars, which is good because they have differing allegiances on the college football front.

Sara roots for her dad’s school, the Florida State Seminoles. Travis, meanwhile, roots for the University of Florida Gators. In Florida, where college football rivalries are strong, that’s a big deal.

“We love each other 365 days a year,” says Sara, “but the day Florida and FSU play each other, we’re not so friendly.”

What should you keep in mind if you’re thinking about getting involved with an HSA?

Understand the basics of HSAs.

• An HSA is basically a qualified high-deductible health plan with premiums that are lower per month than a traditional health plan. The cash you’re saving with those lower premiums goes into a tax-free savings account. You can then use it to pay for routine stuff or you can invest it for your future.
• HSAs are great for certain kinds of people. For example, if you’re self-employed, you get a tax deduction for putting money in. Then the money grows and can be spent tax-free. It’s such a great triple threat. You can contribute a maximum of $3,250 for a single person and $6,450 for a family.
• Where these kinds of plans really shine is for catastrophic things, not for when you have the sniffles and want to go to the doctor. If your health gets really bad, with many traditional health plans there could be more holes in your coverage than in Swiss cheese. Yet with an HSA, if something bad happens to you, you are covered to the max.

Pick the right investments for you.

• HSAAdministrators.info and HSAFinder.com both offer quotes and other info for individuals looking for HSAs and companies looking to start HSA enrollment for their employees.
• Health Savings Administrators is an affiliate of Vanguard and offers a full suite of twenty-two Vanguard no-load mutual funds. There’s even a simple money market account available for those who like to take the conservative approach with their money.
• HSAs are not for everyone, but if you are in fairly good health and generally seek value in everything you purchase, this program probably will allow you to reduce health insurance costs and retain the savings.

Name your own price for health care.

• If you have an HSA and have to pay for routine procedures, you know that every dollar counts. Enter bidding for health care à la the Priceline model as a way to save money!
• BidonHealth.com lets you put out for bid the care you need from multiple providers who need to keep their lab techs busy during slow hours. The site claims it will save you 60 to 90 percent on labs, X-rays, mammograms, cancer screenings, ultrasounds, and more.
• The Arizona Republic reported that a woman who was on her husband’s high-deductible health plan needed a spinal MRI and was quoted $3,200 at a nearby radiology office. So she went on BidonHealth.com and successfully bid $350 for the same procedure at a facility about 190 miles away. She had to drive about three hours to have the test, but what a savings!

HSAs are one answer to our health care quandary.

• Health care accounts for 20 cents of every dollar of economic output in the United States, with much of it coming from government and private employers.
• We all know this system lacks transparency and is anti-free market. So what would I do to fix the mess in Washington if I were in our nation’s capital?
• I would take health care out of the hands of employers and the government. Each individual would be responsible for buying his or her own policy, if they wanted to. The elderly and those of low income would get a voucher to go shop for coverage on their own. That way, we would become consumers again, shopping for the best deals. HSAs go a long way toward achieving that goal.
• But since we’re not doing it like this, we have removed capitalism from 20 percent of our economy . . . and that is not sustainable.