Medical Savings Accounts are being would help former welfare recipients develop a sense of personal responsibility in using the health care system say health policy analysts. Overuse or abuse of the health care system would mean fewer dollars in their MSAs at the end of each year.

• As Medicaid recipients move off welfare rolls and into jobs, they eventually lose their Medicaid benefits.

• Utilizing MSAs will soften the transition, proponents point out.

• They suggest that Medicaid be converted to a more general system of low-income health insurance subsidies.

• State authorities would determine the level of the deductible on catastrophic insurance they would subsidize and set up a schedule for contributions to each family's MSA that would decline as family incomes increase.

Former welfare recipients finding jobs with employment based health insurance would be offered the choice of the subsidized MSA or their employer's insurance. Employers of those choosing the MSA would be required to make a payment to a "Low Income Assistance Fund" in exchange for being relieved of the responsibility for insuring those employees.

Source: Bill Styring (Hudson Institute), "How to Wean the Poor from Medicaid," Wall Street Journal, October 2, 1996.