Medical Savings Account - MSA

Categories: Tax, Insurance

Paying for health insurance can be a real drag, especially if we’re young, healthy, and convinced we’re invincible.

News flash: we’re not invincible, and even though health insurance can be a little expensive, there are ways our responsible selves can ease the financial burden while continuing to be covered…just in case our non-invincible status begins to show.

During the ‘90s, the powers that be introduced one of those ways, known as an MSA, or “medical savings account.” MSAs, when coupled with HDHPs, allowed peeps to save up for and afford medical expenses, while at the same time lowering the overall cost of medical treatment.

An HDHP is a high-deductible health plan, and here’s how it works:

Picture a sandwich. Not just any sandwich, but an ooey, gooey, PB&J. Mmm, right? Okay, in this analogy, our HDHP is the jelly and the MSA is the peanut butter. The HDHP is our actual coverage plan: it’s sort of sweet, kind of messy, maybe thicker than we need over here, but a little sparse over there. The MSA is like the peanut butter, because it’s the part that gets the HDHP to...stick. We put money into the MSA (tax-free), and then we can use that money to pay for our deductible health expenses.

After changes in healthcare laws created health savings plans (HSAs) in 2003, MSAs largely went the way of the dinosaur. In fact, MSA funding expired in 2007, though there are some MSAs still out there in existence. HSAs act very similar to MSAs: in simple terms, they are a tax-free savings account where we can stash money until we need to use it for medical expenses.

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Finance: What is medicare versus medicai...3 Views

00:00

Finance allah shmoop what is medicaid medic You hear the

00:07

soldier screaming all the time in war movies i need

00:10

aid Well that kind of is what it is Financial

00:13

aid but medicaid is basically health insurance for the poor

00:16

that is administered by the states but whose purse strings

00:19

are generally controlled federally i'ii centrally In washington medicaid is

00:24

the financial health bomb for over sixty five million americans

00:27

who simply can't afford their own health insurance Taxpayers give

00:31

their dough to the government which then re apportions it

00:33

to the masses to pay for everything from treatment of

00:36

boo boos and out cheese Teo you know serious things

00:39

Why do we have it Why do we have medicaid

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Well if you're a middle class quote average josie unquote

00:45

in this country and on any given sunday night you're

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sitting in your heated home while it's snowing outside and

00:51

you have your tv on and you belt from a

00:53

nice meal How you going to feel seeing a slow

00:56

moving stream of homeless joe's walking by outside coughing desperate

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for health care How does that feel Well maybe the

01:03

costs were so high they used to be you sitting

01:06

In there nice warm house but their kid got sick

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or they got sick or something else happened and had

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to sell their home their car everything covered the doctor

01:15

bills So yeah as a country we just don't do

01:18

india Yeah we don't treat people like that We don't

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have our politicians and successful people live like this while

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the huge percentage of our population you know lives like

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this Medicaid is one of a bunch of social welfare

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entitlements we offer as a country and we posit that

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these combined are in fact one of the many things

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that does make us great So yeah medicaid is specifically

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angled toward covering the medical cost of the poor it's

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not done perfectly it's not done efficiently it could be

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done a whole lot better but at least it's done

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We also have medicare which covers the medical costs of

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the old the g's er's the ones who no longer

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work for the most part except for driving for uber

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there are over sixty five and many of them are

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sick or at least they need pills in one form

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or another Medicare comes in a few flavors all named

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part this and part that like there's part ay which

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covers hospital insurance ever been to an e r they

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cost like a grand or three a night Yes more

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than the honeymoon suite at pebble beach and way less

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fun And if things are really bad it covers hospice

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Yeah for the the end with capitol the end then

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there's part b which covers the more basic less emergency

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today today outpatient care issues from pill subscriptions toe therapy

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then there's part c which is basically the arrangement between

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your employer and government health care You know hmo's p

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pose and so on that is essentially your employer pays

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medicare to just handle your coverage soup to nuts and

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you know unless you're allergic to nuts don't don't don't

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do that and party is all about drugs D for

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drugs see thats what it stands for that's how you

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remember it that's medicare and medicaid these social entitlements while

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helping plenty of people cost the country of fortune And

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yes there is corruption in the system and lazy people

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who are just they're collecting a paycheck And yes computers

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and robots will help us manage all this stuff more

03:04

efficiently in the future But the suffering they stave off 00:03:07.92 --> [endTime] is worth it

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