Five Advantages of Medical Savings Accounts
February 16, 2009
Five Reasons to Pay Your Health Care Bills with Medical Savings Accounts
During a tight economy, asking for yet another deduction from your paycheck might sound like a dumb move. However, medical savings accounts (MSAs) can help most Americans save money on health care expenses while shortening doctors' visits and hospital stays.
#1: They Can Link Directly with Your Health Insurance
Because most Americans allow their health insurance providers to manage their medical savings accounts, paying your office visit co-pays and other out of pocket expenses with an MSA is often seamless. In many healthcare offices, billing departments can submit reimbursement requests to a single insurer, streamlining the billing process. Using secure Web sites that resemble online banking services, account holders can review transactions and track payments to healthcare providers.
#2: You Can Use a Debit Card
Many flexible health spending accounts offer subscribers the option of carrying a special debit card that can be used in doctors' offices and at participating retailers. In major pharmacies and discount stores, checkout registers can track eligible purchases of medication, health aids, and equipment. Making health-related purchases using an MSA debit card eliminates the need for record keeping, since receipts are transmitted instantly to your insurance provider.
#3: Health Savings Accounts Prevent Budget Catastrophes
By making a regular contribution from your paycheck, you can maintain an MSA to cover the maximum out-of-pocket expenses required by your insurance provider. For Americans on a budget, a health savings account can help guarantee access to care when providers demand payment in advance. According to personal finance experts, we tend to take better care of ourselves when using the maximum value of our health savings accounts. Instead of scraping together funds for a doctor's visit, it's assuring to know that a bill has already been paid.
#4: You Get More Value While Paying Fewer Taxes
Because the IRS does not tax contributions to medical savings accounts, Americans with MSAs enjoy increased spending power with health care providers and at pharmacies. On average, you can spend twenty to thirty percent more using a flexible spending card than you would by paying with after-tax funds.
#5: When You're Sick, You Don't Have to Worry About Payments
The last thing you want to worry about when you or a loved one needs medical attention is the bill. By planning MSA contributions that accurately estimate your maximum potential healthcare spending over the year, you can rest assured that your family will be well cared for. In fact, many states now allow insurance companies to offer less expensive policies for subscribers who agree to offset higher deductibles with medical savings accounts.
Different insurance policies and employers offer different kinds of medical savings accounts. Therefore, you should ask for information about the availability and the limitations of the health accounts available for your family. Overall, an MSA or a similar account can reduce your expenses and your stress.