Medical Savings Account Plans: A Patient-Centred Approach to Medical Insurance
David T. Springer
Medical savings account (MSA) plans are a form of medical insurance that combine high-deductible medical insurance with a tax-free personal trust account (used to pay medical bills not covered by insurance). MSA-like plans have been in existence in US companies for over 10 years, in Singapore since 1984 and in South Africa since 1994. MSA plans have a distinct advantage over other forms of medical insurance in that the locus of medical decision making remains with the patient and doctor; in addition, market forces are brought to bear on cost, availability and quality of medical services. The concept of MSA plans has been criticised for only benefiting healthy and wealthy individuals, and for the potential difficulties individuals may encounter in making informed healthcare decisions. However, these criticisms have not been borne out by the US, Singapore or South Africa experiences. There are many distortions in the medical marketplace which MSA plans alone cannot address. These include price-fixing, mandated insurance benefits, onerous insurance regulations and government or employer-provided medical insurance. A free medical marketplace would include unrestricted MSA plans, individually owned and fully portable insurance, benefits decided by the patient, market-determined pricing, fee-for-service arrangements and minimal cost shifting.
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