MSA's Can Be a Windfall for All
Table of Contents
- Introduction
- Types of Health Spending Accounts
- A Drumbeat of Criticism
- Are Cost Savings from Raising Deductibles Exaggerated?
- Do MSAs Change Patient Behavior?
- Will MSAs Attract "the Healthy And the Wealthy" at the Expense of Everybody Else?
- Do MSAs Encourage People To Avoid Needed Preventive Care?
- Will MSAs Pull the Best Risks from "the Insurance Pool," Raising Costs for Those Who Remain?
- Can MSAs Help Control Costs over the Deductible, Where the Need Is Greatest?
- Conclusion
- Notes
- Appendix
Can MSAs Help Control Costs over the Deductible, Where the Need Is Greatest?
The critics have a point here, though a very small one. It is true that a large portion of annual health care expenses exceed the deductible of an MSA/high-deductible plan, and thus are not subject to whatever cost-constraining effects the MSA might provide. Controlling those high-cost situations is certainly important, but it does not violate the MSA concept at all. MSAs exist to control low-cost routine expenses, something managed care does not do very well. But once a patient has "broken through" the deductible, third-party insurance's cost-controlling mechanisms will apply. Moreover, people who become active consumers when dealing with low-cost services are not likely to change their behavior just because their expenses have broken through the magical $2,000 figure. They may continue to research their needs and demand that service providers explain the treatment options - and costs - to them. If they have become accustomed to dealing from a position of power in making health care decisions, they are likely to continue doing that. We can only imagine in what ways physicians and health centers may transform themselves to accommodate newly empowered patients, and that transformation will not cease simply because a dollar level has been reached.
"MSAs exist to control low-cost routine expenses, something managed care does not do very well."
The presence of an MSA with money in the account enables patients to exercise their own discretion even after the deductible is met. In South Africa, for example, to improve the management and cost of all care for diabetes, Discovery Health has contracted with local centers for excellence. Discovery Health pays the diabetic center the equivalent of U.S. $80 per patient per month to cover all treatment costs. Discovery Health requires each diabetic patient to pay one-third of the cost. Thus the diabetic center has an economic incentive to deliver services efficiently and the patient has an incentive to fully use the program. Patients with money in MSA accounts also have more options to go outside the provider networks available under their plans or to seek treatment not covered by ordinary insurance.
