Health savings accounts (HSAs) let you pay for medical care with tax-free money. But are HSAs right for you? It depends on your health, your personal finances, and your preferences for medical care.

A health savings account (HSA) is a way to put aside tax-free money to pay for medical costs. Health savings accounts continue to increase in popularity because they promise health care cost savings for business and more control over health care choices for individuals. To qualify for a health savings account, you must be covered by a high deductible health plan. Like everything, there are both advantages and disadvantages to using a health savings account to pay your medical expenses. Is an HSA right for you? It depends. See where you find yourself in the situations below.

If you're relatively healthy, then a health savings account might be right for you. The main advantage of an HSA is the amount of money you save on premiums for your high-deductible health plan (HDHP). The high deductibles on HDHPs translate into lower monthly premiums. Your good health may allow you to avoid some medical expenses that would fall under the deductible. Compare your annual health care costs to your current annual premium costs. If you're paying more for the premiums than you are for health care, you definitely ought to take a look at HSAs.

If you don't use the money you deposit into your HSA, it rolls over into the next year and your HSA increases in value. Until you're 65, you can use your HSA balance to pay medical costs. Once you turn 65, the accumulated funds can be used for any reason, just like an IRA.

Some employers will contribute money to your health savings account. If your employer does this, then you should consider an HSA even if you aren't always healthy. With the lower monthly premiums and your employer picking up the tab for much of the deductible, you very well may come out ahead. Individuals with chronic diseases that require frequent doctor visits (like diabetes or arthritis) should probably think twice before switching to an HDHP/health savings account combination.

It's actually possible that you could have a qualifying high-deductible health plan without the health savings account. You should add an HSA right away if this has happened to you. If you are covered by Medicare or by a traditional health plan, then you're not eligible for a health savings account. Your employer may offer an HSA-eligible plan though, so you may be able to switch during your company's open enrollment period.

Many people are finding that health savings accounts and high deductible health plans are a good choice to fill the time gap between early retirement and Medicare coverage, especially if they're in good health. HSAs should also be considered by those who are self-employed and self-insured.

Critics of health savings accounts are concerned that individuals may delay or forego needed medical care, leading to worse health problems that are more expensive to treat. If that happens, health care costs will rise instead of drop. It's important for you practice good preventive health care measures and to seek medical care when you first need it.

In the end, your decision should be based on your personal financial situation, health condition, and the way you prefer to access medical care. Regardless of the plan you choose, if health savings accounts have the impact on costs that proponents predict, we'll all benefit from lower medical costs.