The purpose of this paper is to analyse medical savings accounts as an instrument
for financing private health care expenses incurred by individuals in Poland.
A medical savings account (MSA) represents a mechanism of health care financing
which relies on the accumulation of personal savings to cover the costs of health care
services at the time of consumption. The paper focuses on voluntary
MSAs, which – from an individual’s perspective – can be considered as a tool for
financing additional out-of-pocket medical expenses, especially after retirement. The
concept and specific characteristics of an MSA and of a financial product combining the
medical savings account with insurance against catastrophic health care costs are
presented here. After, with the use of actuarial methods, a model is proposed in order to
estimate the amount of the annuity payment made to an MSA depending on the
discounted value of a person’s health care expenses, age, gender and investment
variants. The results of the conducted simulation analysis can be useful in practice,
especially in the context of accumulation of savings to cover private medical expenses
incurred by retirees, which – if funded on an ongoing basis – can result in a significant
burden for retirees’ household budgets.