MEDICAL SAVINGS ACCOUNTS Introduction Health

History, Concept and Current Status of Medical Savings Accounts

Concept. The National Center for Policy Analysis (2000) characterizes the concept of the Medical Savings Account as that of allowing employees of small businesses to set up a tax-free interest-bearing medical savings accounts. Under traditional health insurance, people make monthly premium payments to an insurer such as Blue Cross, and the insurer pays medical bills as they are incurred. Under the new system, people could confine health insurance to catastrophic coverage (say, expenses above $3,000), reduce their monthly insurance premium payments and make deposits to a Medical Savings Account instead. Insurance would pay for expensive treatments that occur infrequently, while individuals would use their MSA funds to pay small bills covering routine services.

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ere is a good deal of waste in the health care industry, part of which is that people use health insurance money to pay for nonrisky medical episodes. If they use MSAs, it is estimated that the U.S. health care system would save almost $588 billion over five years. 2. Increased Choice and Higher Quality - Even without health care reform, people are increasingly finding their choice of doctors restricted, and bureaucracies are interfering with doctor-patient relationships. MSAs would give power and money to patients; doctors would become their agents rather than agents of bureaucracies; and people could exercise choice in the medical marketplace, thereby ensuring quality service delivery. 3. More People Will Be Insured - Medical Savings Accounts allow people to use their MSA funds to continue coverage with a previous employer or to purchase a new policy if they are currently unemployed. Thus, it also prevents job lock. In addition to the foregoing, it is also felt that Medical Savings Accounts will help to restore the doctor-patient relationship by allowing patients to make their own choices for health care. Further, since people know that they have monies available, they are more likely to seek preventive medical care. In
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Approximate Word count = 1487
Approximate Pages = 6 (250 words per page)

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