Health Insurance: What to Do When You're On Your Own

If you're paying for a HDHP, we think HSAs are an excellent way to supplement your coverage and cut your costs. You get true tax advantages and you have total control over how to spend and invest the money. There are limitations as to how much you can contribute. In 2007, it's $2,850 for individuals and $5,650 for families. (If you're over 55, you can make an extra catch-up contribution of $800.) Check with your employer to see if a HSA is offered through work. If not, you can establish an account with banks, credit unions or insurance companies.

You may also be able to set aside pre-tax dollars in what's called a dependent care account if you have a child, disabled parent or spouse. The main consideration here is the money you set aside pays for care of your dependent while you work. If you're married, both you and your spouse must be employed, unless he or she is disabled or a full-time student. Otherwise, you would be ineligible. As with HSAs, there are limits to how much you can contribute depending on your situation.

Health Insurance You Don't Need

We'll leave you with a warning about what kind of insurance not to buy. We hear from a lot of people who wonder if they should buy "single-purpose" health insurance policies, such as cancer insurance.

No!

If you had cancer, you wouldn't qualify for a cancer insurance policy. If you are healthy, why start placing bets on a specific illness? A one-size-fits-all health policy that covers physician care, hospitalization, and major medical is what everyone needs.

Want a little more straight talk on insurance? We have you covered:

• Slash Your Health Care Costs
• Disability Insurance: A Crucial Question for Your Family
• Why We (Generally) Hate Cash-Value Insurance Policies