Health Savings Account

A health savings account is a tax-advantaged account for an individual with high deductible health plans that want to save for medical expenses that those plans do not cover. Contributions are made into the account by the individual or their employer and are limited to a maximum amount each year. This is the ultimate investment account since the contributions to your health savings account are invested tax-free over time and can only be used for qualified medical expenses. The money in your health savings account can be used to invest in stocks, mutual funds, ETFs, bonds and other securities which can yield significant returns on the financial markets. Growth on your investments are tax free which makes having a health savings account ideal for doing investments. These accounts are ideal for self-employed individuals or those who are a part of the informal sector in any economy. If the funds are not used then it can be used for investments which would build more capital for more significant medical needs or just as an investment fund for retirement. This is one of the best tax-advantaged savings and investment tool that is available. Contributions are not subjected to tax, the money can be invested and grow tax free and withdrawals are not taxed once they are used for qualified medical expenses. 

There is also the issue of alternative healthcare financing for informal sector operators which makes up more than half of the economy in most developing countries. The informal sector may include those with employment in street vending, taxi driving, domestic work, farming or self employed contractors. Traditional health insurance model is not an option for the informal sector because of affordability, lack of mandatory health insurance laws for the poor, irregular income, unpredictable healthcare expenses, lack of risk pooling, lack of inclusion, fragmented access to healthcare, restricted access to health insurance, limited coverage and administrative challenges. Innovative models that can provide better systems for alternative healthcare financing include: 

1. Health Savings Account- This allows individuals to set aside funds specifically for healthcare expenses. These accounts are usually paired with high-deductible insurance plans, where individuals pay out-of-pocket costs up to a certain threshold. Health savings accounts can empower individuals to make informed decisions about their health care spending and provide a safety net for unexpected medical expenses

2. Medical Microinsurance- This refers to health insurance products designed for low-income individuals or households including those in the informal sector. These products usually have low premiums and simplified administrative processes. Microinsurance plans can provide coverage for specific healthcare services or a package of health benefits. These products are offered through partnerships between insurance providers, microfinance institutions and community based organisations.

These approaches to healthcare financing that are tailored to the circumstances of low income households are necessary for the advancement of universal access to quality healthcare services.

The medical laboratory will be at the forefront of solving many of these problems related to alternative healthcare financing. Lets partner together as we make quality and efficient healthcare delivery available to everyone.