Medical Savings Accounts Study
What Are Medical Savings Accounts?

Medical Savings Accounts (MSAs) are an alternative to prepaid comprehensive medical and health services. The coupling of MSAs and high deductible insurance forms a viable option to the current model of financing and delivering health care. This different and powerful approach is now used in many companies and is being written into law by various state legislatures.

MSAs utilize high deductible health insurance, financial incentives, wellness programs, life-style modification incentives, and large case management enabling individuals to participate more effectively in their own health care decisions. Together, these elements preserve and improve employee and family health. They reduce health care spending, increase compensation, improve productivity, and strengthen company competitiveness in the marketplace.

MSAs provide first dollar coverage of individual health care expenses and minimize administrative costs. They cover personal preventive health measures, reduce utilization, and breathe new vigor into the doctor-patient relationship. Comprehensive MSA programs eliminate many financial barriers to health care services and protect individuals and families from catastrophic expense. Properly structured, they can provide employee, rather than employer, ownership of health care benefits.

The MSA model restores the patient to a central and influential position in health care transactions. Informed consumers choose the extent of personal resources to place at risk, and hence, use health care services more prudently. The patient decides whether a visit to the doctor is important, eliminating the distant bureaucrat, whose purpose is to comply with cost control rules and regulations.

In the debate over health care spending, no one denies that spending is a result of utilization. Every use costs somebody something. Health care utilization and spending decrease in relation to the extent to which people who use the services have a direct responsibility to pay for them. MSAs reward less frequent and more thoughtful use by providing the patient with immediate savings.1

"The MSA model restores the patient to a central and influential position in health care transactions."

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