Ok, following up on the last post, I found something called HSAs which I have not hear about before. This is not surprising because up until I started my current job, I had never heard about a flex savings plan/account -- this has a lot to do with my lack of hospitalizaiton. Unlike the flex plan, an HSA rolls over each year and works like a savings account/IRA. Essentially, you open up an HSA and put money into it, either pre-tax or as a tax deduction. You spend this money on medical related expenses, also tax free. The account can earn 1-2%, tax-free. An individual can put in up to $2850/year or a family can put in $5,650/year. Again, this is untaxed money. If you are putting the money in from your net pay, you can deduct that amount from your taxes. If your employer or retirement/investment account puts this money in pre-taxes, you are never taxed. You can then spend it on medical expenses such as doctor visits, band-aids, or lasik eye surgery without paying taxes on it.
Now, the really interesting part that has someone like me excited is that health insurance providers provide special rates for people with HSAs. Essentially, you pay a higher deductible for lower rates. For someone that is healthy, this is very exciting. You put your pre-tax money into an HSA and then pay a lower fixed monthly payment. For example, I can get a plan with $1250 deductible, $15 doctor's visit, and 0% copay otherwise for $75/month. Now, that $1250 deductible is pretty scary until you realize it's $104/month for the first year ($179/month for the first year), and once you get it built up, it's there until you use it, earning 1% interest. If you put more into your account, you can use those savings for things like co-pay and prescriptions ($5 generic). From the same company with $0 deductible, $20 doctor visit, and $15/generic prescription would cost me $139/month. The HSA would save me $64/month ($768/year). If I was smart and put $139/month into my HSA for the first year, I would have $768 + interest in my HSA, unless I've used some of it to pay deductibles/copays.
So until you get your HSA built up, you're taking a gamble that you won't need to get work done and pay a deductible. This is a relativley safe gamble in that you can probably work out a billing arrangement with the medical facility if you do end up needing their services. Once your HSA is built up however, you can add to it at a much slower rate or even stop contributing once you get to double your deductible or double your maximum out of pocket expenses. Essentially, you can decide how much to put into the HSA based on your comfort level with meeting medical expenses below the deductible.
For further research, I did a quick search on HSA Insider to see what a 63-year woman would have to pay. A $0 deductible, $20 co-pay (plus $15 generic prescriptions) would be $613.57/month. An HSA compatible plan has a worse deductible in this case. The cheapest plan is $224.10/month, but with a $3,750 deductible ($15 office visit/$10 prescriptions ). The next best plan (ignoring all the co-insurance ones and those that don't cover doctor's visits) is $316.58/month with a $1250 deductible ($15 office visit/$5 prescriptions).
Again, I just discovered these today and this is rough math, but my initial impression is that an HSA definitely saves you money in the long run and, depending on your medical expenses, could save you money in the short run. The thing that could hurt is if you get hit with a high medical bill (like an extended hospital stay) in your first year of using an HSA (before you get your account built up). It will of course, be cheaper than no insurance and an extended hospital visit, which could be between $1000 and $5000/night.
Another advantage is that money in your HSA can be used to pay for the deductible, medical supplies, and even uncovered procedures (like lasik). Also, in times of financial hardship, you can make withdraws from your HSA as well to cover basic living expenses (there may be tax restrictions on this).
As a final note, tt seems I pay $68/month (no deductible) through my employer-sponsored program. I couldn't find a plan that really beats that. There was a $60 plan with a $2500 deductible and $51 plan with a $5000 deductible. $5000/$17 = 294 months or 24 years. $2500/$8 = 312months or 26 years.
You might want to check up on those spending accounts because the ones I've heard of and what my work has, is you either use that money up by the end of the year or lose all that money. That's how UPMC system wide is, Kennametal, and other local places' health insurance savings accounts work.
My company offers those flex-spending accounts as well that are "use it or loose it". These HSAs do roll over, just like a savings account does. I did read that if you don't have a "high-deductible health plan", you can't enroll in an HSA. Flex-spending does not -- any employee could enroll. So if a company offer health-insurance, they most likely won't be offering HSA.
However, even if your employer doesn't offer anything health-wise, all have the ability to make pre-tax deductions into a specific account (ie, an HSA), even if they don't quite realize it.
UPDATE: I later realized that *if* your employer does offer a health plan, you can *not* enroll in an HSA.