Policy Documents

Are Medical Savings Accounts Good for the Sick?

John Goodman –
November 1, 1995

In this policy fax, John Goodman argues that 

People with high medical expenses are almost always better off if they can switch to a Medical Savings Account plan. If any are worse off as a result of the switch, they lose very little. For example, an MSA plan would be a bonanza for high-cost Medicare patients, who would gain a lot more than healthy seniors from such a plan. The people who gain the least by switching to an MSA plan are not the very sick, but chronic patients with moderately expensive-to-treat conditions-people who generate medical bills in the range of $2,000 to $5,000 per year. But even this group would likely find MSAs attractive.