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Is a health savings account right for you?

October 01, 2013|By David Lazarus

As pre-enrollment begins for Obamacare, Albert is exploring his options. He wants to know more about health savings accounts.

Good idea. Health savings accounts, or HSAs, can be a good fit for some, but not for all.

Basically, a health savings account is like an IRA for healthcare. Money you put into it isn't subject to federal taxes. It can also roll over from one year to the next if unspent.

ASK LAZ: Smart answers to consumer questions

If you withdraw money from an HSA for non-medical purposes, there are penalties.

Here's the deal: Health savings accounts typically come with large deductibles. That means you'll pay more out of pocket for healthcare.

So if you don't anticipate much in medical spending -- that is, if you're relatively healthy -- an HSA may be just what the doctor ordered.

If, on the other hand, you have a condition that makes medical spending likely, a traditional insurance policy could be wiser.

For more, check out today's Ask Laz video.

If you have a consumer question, email me at or contact me via Twitter @Davidlaz.

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