Medical Savings Accounts Study
Why the Critics Fail in Their Objections to MSAs

There is one glaring omission in each of these studies. None of the critics test their assumptions, or their projections about Medical Savings Accounts, against real life experiences or theoretical models. None of the MSA opponents offer empirical evidence nor do they offer personal experience substantiating their objections and concerns. Each of the authors present only presumptions and suggestions as to perceived and possible effects and consequences associated with MSA programs. What little data is offered consists of inappropriate use of claims information, omission of insurer administrative costs, and unbalanced proration of health benefit dollars for insurance and for MSAs.

One of the recent critics, Mark Pauly, published his concerns in an American Enterprise Institute policy paper.37His objection dealt primarily with recommendations by advocates for preferred tax treatment of MSA accounts. In an ideal world free of protecting special interests and free of politicizing especially health benefits, this is in part a valid objection. Perhaps the best tax policy is to treat all health benefits exactly in the same way for all employers, employees, and individuals regardless of age. Pauly adds nothing further to the arguments about desirability or to surmised adverse consequences of MSA programs.

Further countering the naysayers of MSAs are independent studies and papers published by the Buckeye Institute of Ohio, the Council for Affordable Health Insurance, and the National Center for Policy Analysis. Each rebuttal responds directly to the speculations presented by Burry, Lav, CBO's budget analysts and others. None of the MSA opponents offer substantiating research-based arguments. This baffles the advocates of MSAs. Why then will the opponents not sponsor, support or participate in a structured, formal demonstration to compare MSA programs with conventional insurance, health maintenance organizations, and other systems that employ prepaid comprehensive medical services? Why not undertake a real test?

In summary, the criticisms addressed above offer no empirical data and are, on the whole, subjective responses. This said, the critics do present questions and concerns that deserve objective review and clear answers. (See Sham Arguments in Appendix)

"None of the critics test their assumptions or their projections about Medical Savings Accounts against real life experiences or theoretical models."

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