MEDICAL SAVINGS ACCOUNTSMEDICAL SAVINGS ACCOUNTSStarting January, 1997, Congress has allowed the experimental implementation of Medical Savings Accounts, or MSA's.
MSA's are a sort of IRA for medical expenses which allow people to save money in before-tax dollars with which to pay medical bills.
The contributions work very similarly to IRA's and may be invested in similar vehicles. Currently the maximum annual contribution is $1462 per individual or $3375 per family.
People under this plan must still maintain a major medical policy with a high deductible in case of calamity above and beyond medical savings. Increasing the deductible can cut insurance premiums by less than half.
The cost of routine and preventive health care is therefore discounted by your tax rate, defining a 30 to 38% savings for most people.
750,000 citizens will be allowed to sign up for this plan until October 1, 1997. To be eligible, you must be self employed or work for an employer with fewer than fifity employees. Those who are currently uninsured may utilize an MSA and not be counted against the quota. Those who start an MSA now will be able to continue contributing throughout their lifetimes, even if Congress fails to approve the program. [Editor's note: as of October only about 90,000 MSA's have been registered. This is a painful and abject failure on the parts of organized health care- another case of hoping that someone else will do the marketing, or that a miracle will happen. Wake up, Organized Dentistry!]
Withdrawal of savings for non-medical uses brings a 15% penalty as well as normal taxes at your rate.
After age 65, the accumulated money may be removed from the account with only taxes due- no penalties.
MSA's are a great deal for those who are very healthy, who can realize significant insurance premium savings by upping their deductible. (Three quarters of Americans pay less than $500 annually for health care.)
They also make sense for very sick people who presently have high co-payment policies.
Two separate surveys have shown that 43% of Americans would change to such a plan.
MSA's provide complete freedom of choice in providers- no stipulation is made by the government as to how the money is used, as long as it is for health care.
The one drawback may be that since patients will be required to withdraw from their "savings", they may be less inclined to pursue diagnosis for seemingly "minor" complaints. Patients will shoulder more of the responsibility for their own health, but the care will be provided under free-market rules.
MSA's have a serious advantage over FLEX plans in that savings accumulate- it is not "use it or lose it" by the end of the year.
| EVERY DENTAL ORGANIZATION, DENTIST, AND AUXILIARY MUST PROMOTE MSA'S TO THE WORLD. |
| MSA's PROMOTE FREE CHOICE OF PROVIDERS AND TREATMENT UNDER FREE MARKET CONDITIONS. THIS IS GOOD, THIS IS RIGHT, AND AIDA PROMOTES THE CONCEPT OF MSA'S. |
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8American Independent Dentist's Association
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