One Area of Agreement: Medical Savings Accounts

Article excerpt

While discussions of a broad-based health care plan seem to spew more conflict than agreement, support does seem to be building for one specific idea, that of Medical Savings Accounts.

MSAs, also called medical IRAs and Medisave Accounts, would allow workers and employers to make tax-free deposits to an account controlled by individuals and used by them to pay some of their medical expenses.

Money could be withdrawn without penalty or taxes only for medical expenses or health insurance premiums. Money not spent would grow with interest, and be transferrable to a retirement plan. The decision would be the individual's.

Acceptance of the concept seems to have swelled from below rather than descended from above _ from elected officials and public policy advocates.

It has considerable bipartisan acceptance in Congress, and has won favorable notice from the House Ways and Means Committee and Sen. Ted Kennedy's Labor Committee. Several states have adopted the concept.

Agreement of that sort suggests an idea with merit, a natural rather than a contrivance.

Whatever becomes of it in Washington, the concept already has developed support in the private sector, and not just from corporations. Among others, the United Mine Workers agreed this year to a plan based on the MSA philosophy.

The concept represents a departure from traditional health insurance in which monthly premium payments are made by an employer or individual to an insurers such as Blue Cross, which pays medical bills as they are incurred.

In an MSA, individuals could reduce costs by limiting health insurance coverage to catastrophic illnesses. Generally, this would be accomplished by raising deductibles to cover only expenses over a set figure, perhaps $2,000.

Whatever money is saved by so doing could be deposited in the MSA, where it would be controlled by the individual and used to pay small bills for routine services such as annual physicals and minor illnesses. …