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This Web site contains a compilation of more than a thousand consumer finance  columns written by Tony Novak from the 1980s through 2006, updated and reformatted for maximum usefulness today.  New material was added after 2010.

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Prescriptions covered by HSA

originally posted: 11/22/2006  reposted: 2/18/2011 This post has not been recently reviewed or revised by the author and may be out of date. If in doubt, please send a new question or ask for an update.

Q: It is my understanding that some of the med savings accounts are offering plans with prescription coverage. do you have any plans that provide prescription coverage? I know that they provide a discount prescription card.

A: Just to clarify terminology, you probably mean "health savings accounts" since medical savings accounts are obsolete in current tax law. A relative few old medical savings accounts still exist, but new accounts are no longer available. All health savings accounts provide prescription drug coverage by law in the same manner as any other covered medical expense. The expenses that are less than the deductible benefit only from a discount pricing but once the out-of-pocket costs exceed the policy deductible, prescriptions are covered the same as any other medical expense. Health savings accounts may not provide a separate benefit for prescriptions. For example, a health plan that provides for prescriptions with a $10 co-pay is not qualified as a health savings account. Keep in mind that all individual insurance plans, regardless of HSA qualification status, exclude coverage for pre-existing medical conditions including prescriptions. In this case, the pre-existing prescription expense may be reduced through the use of a discount plan and the cost is covered from HSA account funds. In contrast, employer-provided group health insurance policies cover pre-existing medical conditions, including prescriptions, after the waiting period has been satisfied. A listing of low cost HSA qualified plans for individuals and families is listed at .


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