Medical Savings Accounts Study
Central Features of Medical Savings Accounts

Whether an insured or self-insured employer, individual, association, trust, etc., MSA programs allocate total health plan financing into two parts: a portion of the financing pays for a high deductible major medical insurance or self-insured plan and a second amount is deposited in the employee's medical savings account.

MSA program financing mechanisms assure 100% coverage of health expenses incurred by MSA enrollees up to a predetermined threshold. MSAs provide first dollar coverage for qualified health services. They prefund health care expenses up to the point at which the higher deductible insurance policy comes into play. The higher deductible health insurance policy then provides 100% payment for services after the funds below the threshold have been paid out.

MSA programs may coexist with indemnity plans or managed care plans. The model MSA is sufficiently flexible to permit adoption by any health care organizational system. While beyond the scope of this paper, MSA programs also could coexist with Medicaid, Medicare, Veterans, Military and other government health plans.

MSAs are not the panacea for all people and all problems long associated with the health care system. They are not replacements for all of the various proposals offered to deal with health care reform. But as a promising health reform strategy, they should be an option for those who want them.

"The model MSA is sufficiently flexible to permit adaptation to and adoption by any health care organizational system."

Evergreen Freedom Foundation P.O. Box 552, Olympia, WA 98507 Phone: (360) 956-3482, Fax: (360) 352-1874 Email: effwa@effwa.org