The HMA Fixed the Worry over High Deductibles. A promising tool to grow the cash market!

Elliott Gorog - Owner, Health Matching Account Services

Advisors are worried free-market reformers are too dependent on the popular, tax-advantaged Health Savings Account as a tool both to empower patient shopping and allow cheaper plans due to higher deductibles. Too many HSA holders are blue-collar workers not sufficiently funding them to elude the bankruptcy risk that stems from insurers’ high Out of Pocket exposure. Wealthy entrepreneurs are thriving with HSAs because they represent a tax shelter even more powerful than IRAs - to build $100,000 or more to make a nice nest egg.

How do we, then, help regular Americans for whom HSAs are not living up to their potential? The late Don Levitt on LinkedIn argued for years with HSA defenders on his coming invention, and now the HMA represents the fastest growing tool among licensed health agents. Why?

The genius of the HMA - stems from the brightest actuarial minds at the famous Milliman firm. Using the traditional 80-20 rule, where 80% of users will use only 20% of funds, Milliman analyzed the “pooling” of risk and the frequency of claims to devise a system of increasing benefits - resulting in a prepaid VISA that doubles one's contributions over 3 years. $40 over 3 years, for example, doubles to a $2500 prepaid Visa for Out of Pocket. $140 over that same time period doubles to $10K. Higher monthly amounts double to $40K or even more.

What level you purchase depends on your expected Out of Pocket exposure. Those with higher needs need bigger HMAs. Many will want a modest HMA just for cavities, urgent care, the odd prescription or test, and unexpected hospitalizations.

Doubling means Out of Pocket becomes effectively halved, making the HMA a godsend for chronic patients and families expecting a baby, needing braces, or for anyone expecting a surgery (or wanting one, what’s called “elective”). What healthy people don’t realize, though, is that a $5,000 health expense hits everyone every 5 years, on average. And very few families can afford more than $1,000 for any given episode.

With several years of experience under HMA’s belt, they are about to release a rider for long-term care, solving finally the biggest worry on every retiree’s mind. Speaking of seniors, Forbes Magazine just characterized the HMA as the best “supplement” for Medicare’s gaps. They also have a money-doubling pre-paid VISA for pets.