Reply #20: Speaking from a background in the finance sector

[TechBear_Seattle]

I'm just a programmer, but I've worked at a brokerage firm for almost ten years; you can't help but to pick things up :think: So please, remember that I am NOT a broker and I am NOT offering financial advice.

"Savings account" is a misnomer. In reality, personal medical accounts operate almost exactly like an traditional individual retirement account (IRA.) If you have medical expenses not covered by existing insurance, you may withdraw money you need from the account without the usual penalty. Federal law sets a maximum amount you may put in to an IRA without paying taxes; money put in to a medical account is deducted from your annual limit. If you have a standard IRA and a medical account, the combined amount you put in both is the maximum limit.

They are best for people like me, who have standard insurance with routine care and prescriptions but don't have much coverage for major medical or chronic care. They are also allowing smaller businesses to provide some medical coverage to their employees: the company sets up a 401(k) style medical account, then offers a less expensive, less comprehensive insurance package with a higher deductible. The medical account can be used to cover the out-of-pocket deductible and major medical. Medical accounts can also be used to cover items not covered by insurance such as cosmetic surgery and alternatives to traditional medicine.

They are NOT suited to people with no insurance. They are not an insurance alternative, and anyone who markets them as such is is bordering on fraudulent claims.