Can medical savings accounts for the nonelderly reduce health care costs?
E. B. Keeler, J. D. Malkin, D. P. Goldman and J. L. Buchanan
Health Sciences Program, RAND, Santa Monica, CA 90407-2138, USA. EmmettvKeeler@rand.org
OBJECTIVE--To understand how medical savings account (MSA) legislation for
the nonelderly would affect health care costs. DESIGN--Economic policy
evaluation based on the RAND Health Expenditures Simulation Model.
SETTING--National probability sample of nonelderly noninstitutionalized
households. PARTICIPANTS--Persons in 23 157 sampled households from the
1993 Current Population Survey. INTERVENTIONS--Medical savings account
legislation would allow all Americans who are covered only by a
catastrophic health care plan to set up a tax-exempt account that they can
use to pay medical bills not covered by their health insurance. The
interventions we evaluate differ in the deductibles of the catastrophic
plan and in whether the employee or employer funds the MSA. MAIN OUTCOME
MEASURES--Changes in national health expenditures and net societal benefits
of health care. RESULTS--If all insured nonelderly Americans switched to
MSAs, their health care expenditures would decline by between 0% and 13%,
depending on how the MSAs are designed. However, not all nonelderly
Americans would choose MSAs; taking into account selection patterns, health
spending would change by + 1% to -2%. CONCLUSIONS--Medical savings account
legislation would have little impact on health care costs of Americans with
employer-provided insurance. However, depending on the size of the
catastrophic limit, waste from the excessive use of generously insured care
could be reduced, and MSAs would be attractive to both sick and healthy
people.
