How Does A Medical Savings Account Work?

We all know that the medical care cost is one of the biggest problems in our lives. When we get sick or injured and we need a special type of treatment, the medical bills become huge. Luckily, banks and financial institutions have created all sorts of services that come to give us a helping hand and the medical savings account, also known as health savings account is one of them. It is recommended to have a medical savings account even though you already have medical insurance, as this account helps you put money aside; the money will only be used in order to pay for important medical services, including prescription drugs and the co-payments that appear after visits to the doctor.

The medical savings account became extremely popular in the past few years and it is one of the components of the consumer driven health care. This consumer driver health care is a new type of program that tends to offer more power to the consumer, which is actually the person who is in need of a medical service. If the consumers spend their own money on a medical service, they get the chance to shop around for the type of medical service they receive and a recent study showed that by doing this, most consumers make smarter decisions. By making smarter decisions, they receive a much better medical service and they spend less for that service. Of course, the medical savings account will not help a consumer pay more attention in which concerns the emergency care, but it will surely help the consumer be wiser in which concerns the money spent on prescription drugs and on the service that have to do with the elective care. The same recent study showed the fact that a patient who uses a medical savings account in order to pay for a prescription drug will surely ask his or her doctor whether a cheaper option is available; some patients have even chosen the generic drugs instead of paying for the brand name medication.

How does this account actually work? It is very simple: when the medical savings account is opened by a person interested in having such an account, that person receives a special debit card. The debit card can only be used for medical purchases. This debit card is also known as the HSA card and it can be used in a doctor’s office in order to pay the co-pay bill; the HSA card can also be used in order to pay for the prescription drugs (until 2011, the card was accepted even for the non-prescription drugs, but the rule appeared just one year ago). One of the huge advantages of the medical savings account is represented by the fact that the money that remains in the account at the end of one year can be used the next year. This is actually the biggest difference between a medicals savings account and a flexible spending account, as the money that remains in the flexible account is lost at the end of the year.