Question

11. One reform idea that is often floated in the US is the use of Medical Savings Accounts (MSA’s) in conjunction with high-deductible insurance plans (sometimes called catastrophic coverage). Individuals could deposit pre-tax dollars into their MSA and use the money to pay for out-of-pocket medical expenses. If unused, the MSA money simply becomes savings for the individual.

1. What is a high-deductible plan?

2. What are the pros and cons of such a plan?

Answer 1

1. In US a high-deductible plan [HDP] is an insurance option that offers a higher deductible than what you would receive through a traditional insurance plan.You will typically received a lower monthly premium in return for paying more of the health care costs yourself before the insurance company begins to pay a greater share.most HDP options can be combined with a health savings account that allows you to pay for medical expensrs without encountering federal taxation.

2.Pros and cons of HDP

Pros

• The monthly premiums for a HDP are typically lower than other insurance plans
• Can open a health savings account with an HDP
• There is a cost adventage to consider for employers.i.e the cost to insure employees through the use of a high deductible health plan is lower.
• The stracture of HDP is similar to what we already use for other essential needs in our lives,such as home or car insurance
• Once the maximum is met ,we do not incur additional expenses for in-network care.

Cons

• It costs more to manage a chronic illness with the HDP option.
• It can lead to higher levels of medical debt for some households.
• People using HDPs are less likely to receive preventative screenings.
• The premium cost and deductible levels continue to rise
• There are no exceptions on the timing of when you receive care