Medical Savings Account Pilot Project Phase I
Summary

Study Thesis: Properly structured and designed MSA programs will ensure reasonable financial access and affordable health insurance, maintain appropriate quality of care, control inordinate health services spending growth, and satisfy participating sponsors, employers, providers, and patients.

This study was conducted as direct observational and descriptive research. Available literature and media reports were collected. Information about MSA plans and benefits was obtained directly from company senior management, plan beneficiaries, and other participants. The study investigators conducted all onsite research by personal and direct observation. As a result of these efforts, this study:

• assembled a vast literature and commentary on Medical Savings Accounts;
• reviewed their historical and emerging roles in the financing and delivery of health care services;
• identified and acquired relevant information about existing employer- sponsored MSAs;
• analyzed differing features, workings, and results of selected MSA prototypes;
• developed a framework for design, implementation, and evaluation of MSAs as the centerpiece of Comprehensive Managed Health Benefits Plans; and,
• expanded the literature, analytic premises, and knowledge base about Medical Savings Account Programs.

This study has produced extensive empirical data on selected employer provided MSA health benefits. This data includes features of working MSA models, provides details of MSA program "mechanics", and shows the effects of MSAs on health spending and utilization. Comparisons of MSA and prepaid medical plan costs show substantial differences between them and highlights the potential savings and utility of MSA plans to employers and enrollees. This important information was used to document an improved and deeper understanding of Medical Savings Accounts: what works, what doesn't work, and what needs improvement.

The evidence reported in this study confirms the effects many advocates proposed are likely to result from employers offering MSA programs to employees and families. At a minimum these effects include:

• positive behavioral changes in need and demand for health services
• increased individual involvement in clinical transactions
• greater, not less use of preventive services
• reduced health care expenditures for sponsor and employees

"Properly structured and designed MSA programs will ensure reasonable financial access and affordable health insurance, maintain appropriate quality of care, control inordinate health services spending growth, and satisfy participating sponsors, employers, providers, and patients."

• choice of MSA programs by both chronically sick and healthy people
• likely choice of MSA programs by low income employees
• strong employee participation, acceptance, and satisfaction
• strong and growing employer interest
• participation accepted and approved by providers

Based upon the observations and findings documented in this pilot study, Medical Savings Accounts programs and benefits are generally effective and do what they propose to do. MSAs incorporated within comprehensive managed health benefits warrant respect and utility among health benefits programs. Employers and sponsors wanting to offer these advantages and savings to their employees and families can conduct an objective review and analyze the comparative benefits and advantages of MSA plans against existing plans. Interested employers and others seeking to offer MSA plans may use the guidelines developed by this study to facilitate their decisions as to what health benefit plans meet objectives and what plans are in the best interests of their employees. Furthermore, this study provides a framework to conduct objective evaluations of employer-provided MSA plans and their outcomes.

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