They could choose the health plan best suited to their needs, with the doctors, hospitals, treatments and services they prefer. They could benefit financially through cash rebates from the MSAs and other private plans. Finally, they could gain control over their health care dollars and avoid the limits on access to care that are increasing under Medicare. Thus today's retirees would not suffer from a Medicare financing crisis - and neither would future generations. Medical Savings Accounts are personal, individual accounts used to pay for routine and preventive health care and are combined with high-deductible, catastrophic health insurance that pays for major expenses.
Catastrophic insurance pays all bills above the deductible.
Under the Medicare reform proposal, private insurance companies such as Aetna and Prudential would offer high-deductible insurance policies to seniors as an alternative to traditional Medicare. After paying normal income taxes, seniors could spend the money as they wished. One option would be a health care debit card. Seniors would present the card to a doctor or hospital at the time a service was rendered, and funds would automatically be transferred from the patient's MSA to the doctor's or hospital's account. Another way would be to pay in cash and take or mail the receipt to the financial institution managing the MSA for reimbursement.