Health & Medical Saving Accounts

Background

The historical, economical and societal circumstances that led to the introduction of employer based health insurance are all well known. The same factors that surrounded the introduction and implementation of the government based health insurance programs are also very well known. Although not explicitly mentioned, it is clear from the economic indicators and numbers that no one have successfully predicted that the different private and government sectors’ interventions in the health care market would lead to the unique situation that dominates the health care market in the USA. Since the growth in national health expenditure has historically outpaced any other economic activity, not to mention the GDP, both the government and the private sector tried to introduce policies and interventions that would control the continuous growth in health care spending. However, the never ending plethora of laws and plans that aim to introduce new solutions for the continuous growth of medical along with the different predictions of continuous growth of health care expenditures in the USA can only mean that the different strategies and interventions failed to achieve their intended short and long term goals (Cuckler et al., 2013). Such interventions included government price setting, promoting competition, premium control, health system integration, managed care, Health Reimbursement Arrangement (HRA), Medical Savings Accounts, flexible spending accounts (FSA), and Health Savings Accounts (HSA) (Gleid and Remler, 2005, Moon et al., 1996).

Since all previous interventions targeted the supplier side with limited realizations, a major change in paradigm to overcome the limitations of previous interventions and help control the growing health care Medical was the introduction of individual based spending control mechanisms (consumer side interventions). One of the most recent examples is the Medical Saving Accounts (MSA) which were first established during the early 1990s in many states. The Health Insurance Probability and Accountability Act (HIPAA) of 1996 contained the provisions of a five year federal MSA pilot project, also known as Archer MSA (for Congressman Bill Archer who supported their amendment). After the federal enactment, twenty six states followed and established similar MSAs. The MSA created under the HIPAA was bounded by many rules that limited its expansion, MSA was discontinued on December 2005 (Bunce, 2012, Moon et al., 1996). Health Savings Accounts (HSA) is a type of MSA and were permanently created as part of the Medicare Prescription Drug Improvement and Modernization ACT (MMA) in 2003 (Hoffman and Tolbert, 2006). The 2010 Affordable Care Act (ACA) contains provisions that are aimed to promote HSAs through clauses that promote High Deductible Health Plans (HDHP) by offering them at lower tiers (Shenkin et al., 2014, U.S. Department of the Treasury, 2014).