Medical Savings Accounts Study
What Is The Likely Future Of MSAs?

• Sponsor: Windham Hospital in Willimantic, Connecticut

• Coverage: Traditional plan coupled with bank savings plan.

Much of the debate surrounding MSAs is not over the desired objectives of health care reforms. Too often, the discussion starts and stops on the respective ideologies that guide experts and common people alike. Medical researcher and analyst, William Allen, differentiates these ideologies in Technology And Health Care in an Era of Limits. He defined the differences as poles apart because of views held rigidly by egalitarians on one side and libertarians on the other. The former seek equality through governmental controls, regulation, community, and collectivization. The latter propose individual responsibility, limited government, minimal centralization, and voluntary cooperation. The differences reflect intellectual expressions and aspirations guided by conviction and belief in the rightness of the respective ideologies.40

Most proponents of MSAs cite the Rand Study (HIE) results of the 1970s and early 1980s as proof of the effectiveness of MSAs—if they would but be tried, tested, and evaluated. Some authors ascribe the original concept of the MSA to Jesse Hixon who proposed the concept in 1981. In 1959, an article appeared in German literature that set forth the basic concept of the medical savings account, its purposes, and results.41 A pediatrician from Seattle, Washington presented a variant MSA in testimony before the 1975 House Ways and Means Committee Hearings on proposals for national health insurance.42

In Washington state there are scattered verbal reports of MSA programs installed for private and public employers over recent years. Attempts to date to obtain complete data on these programs has not been productive. Though we have been unable to locate published reviews of the data and outcomes associated with any of these programs, we look forward to their objective evaluation.

In July 1994, the WA Health Services Commission Task Force on MSAs for Public Employees made a presentation of an employer's experience with MSAs as a form of profit sharing.43 Though explicit data was not shared, the presenter concluded the program worked as projected for a couple of years, but failed later because the employer: (1) did not account for changes in health inflation (2) held back relative compensation increases, and (3) shifted cost increases onto employees.

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