But employers around the country are now combining Medical Savings Accounts and managed care. Medical Savings Accounts are inconsistent with the traditional philosophy of HMOs. But efforts to make medicine cost-effective are natural allies of Medical Savings Accounts. Let's see why. Combining MSAs and Managed Care.
Catastrophic insurance pays all expenses above the deductible.
Currently, the IRS taxes MSA deposits, although employer payments for third-party insurance are tax free. MSA advocates in Congress want to end this discriminatory treatment. Since employees keep any MSA money they do not spend, they have a financial incentive to shop prudently in the medical marketplace. In general, they won't spend a dollar on health care unless they get a dollar's worth of value. Whether or not they have MSAs, today most employers and their insurance companies negotiate prices with doctors and hospitals and explore other ways to obtain quality care at a lower cost.