Equal Time
The Atlanta Journal-Constitution
Personal health accounts are the future of health insurance. Like other forms of employer-sponsored health coverage, employers make deposits into accounts for employees, but they also purchase a low-cost, catastrophic (major medical) health insurance with a high deductible for the employee.
In this respect, options such as medical savings accounts and health reimbursement arrangements are a perfect alternative to one-size-fits-all employer-sponsored policies. They allow employees to control spending on incidental medical expenses, rather than giving control over patients to an HMO bureaucracy.
Due to federal restrictions, MSAs are not available to most workers. However, a recent ruling by the Treasury Department allows any company to establish HRAs.
Employees prefer MSAs and HRAs because personal accounts allow them to select the health services they prefer, not those chosen for them by an employer or an insurance company. This especially benefits patients suffering from chronic conditions, but patients with few medical expenses also benefit, since they can roll forward unspent dollars for times when their health care needs might be greater.
Employers like health savings accounts because they are simple and reduce waste. Since funds are readily available, patients seek care only when needed, which controls costs and improves quality since there is no incentive to seek unnecessary care.
Neither MSAs nor HRAs provide tax shelters for the healthy and wealthy. Employer-paid health insurance premiums are already excluded from taxation, which benefits high-income workers more than low-income workers, who are often younger. Many of these workers often do not participate in employee-sponsored plans because they feel they won't need much care and, therefore, would be wasting their money. For them, rolling forward unused funds is a significant benefit.
When employees control health care spending, they will be more willing to participate in employer-sponsored health insurance plans. Moreover, employers will be pleasantly surprised that annual increases in premiums will decline once employees become smarter consumers.