Pay for alternative medicine with a health savings account

Pay for alternative medicine with a health savings account

The Health Savings Account allows you to set up a tax-deductible account to pay for medical expenses that are not covered by your health insurance. This includes expenses to cover your deductible and other medical expenses such as dental and eyeglasses. However, many do not realize that HSA funds can be used to pay for virtually any type of medical service, as long as it relates to the treatment or prevention of a specific health condition.

Because funds withdrawn from a health savings account to pay medical expenses are tax-free, anyone with an HSA can handle all alternative medical expenses through their HSA and receive a tax write-off. This could include biofeedback, naturopathy, ayurvedic medicine, aromatherapy, magnetic healing, reflexology and the list goes on.

People who use complementary therapies are often very health conscious and are less likely to see traditional doctors. It therefore makes no sense to pay a high premium for traditional health insurance with co-payment, especially if your medical treatments are not covered anyway. Instead, many opt for a low-cost, high-deductible HSA plan.

Alternative therapies are becoming mainstream

Many hospitals now offer complementary treatments. Memorial Sloan-Keating Cancer Center's website states that complementary therapies are used to "relieve stress, relieve pain and anxiety, treat symptoms, and promote a sense of well-being."

Some group health insurance plans are starting to cover more additional costs, but there is still very little coverage for these costs in individual or family plans. Those that do cover chiropractic limit coverage to 12-20 visits per year, and a few cover a limited amount of acupuncture. But very few, if any, cover hypnotherapy, reiki, iridology or faith healers.

Why complementary medicine?

The conventional medicine practiced by most doctors is called allopathic medicine. The philosophy of this system is to treat illness and injury using countermeasures. For example, if you have a fever you can take aspirin to lower it, if your cholesterol is high you can take a statin to lower it, if you have heartburn you can take an antacid. Thinking primarily focuses on eliminating the symptoms of the disease, and the primary treatment modalities are surgery and prescription medications.

But there are other ways to look at things. Naturopathy is based on the belief in the body's own healing powers, which can be strengthened through the use of certain foods, vitamins, herbs or other "natural" remedies. Traditional Chinese Medicine (TCM) is based on ancient Chinese theories about the balance of Yin and Yang. Ayurvedic medicine is based on the principles of movement, metabolism and structure.

Part of the increasing use of complementary therapies is a response to the costs, side effects and philosophy of conventional allopathic medicine. Doctors receive much of their training in the pharmaceutical industry and work in an environment where both insurers and patients are looking for a quick fix. The result is that the average 60 year old now takes 5 regular medications, but there is little expectation that these medications will ever cure the health problems for which they are used. Many consumers see this and instead try other methods to get to the bottom of their illness.

What is considered “HSA qualified expenses”

Qualified medical expenses have been defined in part in IRS Publication 502 and by various federal court decisions. There is no definitive list, but there are really very few restrictions as long as the procedure is intended to treat or prevent a specific health condition. For example, you wouldn't be able to use your HSA funds to pay for a relaxing massage for your personal pleasure. However, if your doctor recommends a massage for specific medical reasons, this is considered a qualifying expense. Yoga wouldn't normally be considered a qualified medical expense, but it would be if it were recommended as physical therapy after an accident.

Some may wonder why the government would give a tax deduction to someone who uses a crazy energy vibration machine to cure their cancer. But that's how it should be. No one but you should be able to decide what type of treatment you use for your own illnesses. By allowing individuals to manage their health as they see fit, health savings accounts promote personal responsibility and help loosen the monopoly on health care that conventional medicine has had over the past few decades.