Insurers move into market for private employer MSAs

Sensing a possible loss of business if they don't do it, health plans find ways to sell medical savings accounts.

By Myrle Croasdale, AMNews staff. Feb. 25, 2002.

Some insurers aren't waiting for Congress to decide about expansion of medical savings accounts before going ahead with their own MSA-style products.

CIGNA HealthCare, Aetna and WellPoint Health Networks are among the large HMOs introducing MSAs, which combine high-deductible, catastrophic insurance with a tax-exempt savings account made up of a consumer's own money.

The quickly growing premiums for HMOs are a big factor in why insurers are offering MSAs. Small businesses -- including physician groups -- have reported premium increases this year of up to 50%, making them rethink whether they can afford to offer health insurance to their employees.

"We see this as a driver of new business," said Kathy Kelly, the MSA product manager for Blue Cross and Blue Shield of Minnesota, which recently debuted its MSA Blue. The product is aimed at companies with 50 employees or less, which Kelly said make up half the employers in Minnesota.

Bruce Kelley, health care consultant for Watson Wyatt Worldwide, Bloomington, Minn., said there may be a limit to the popularity of this product, but there is growing interest. "Self-funded plans aren't for everybody, but the underlying concept has broad appeal," he said. "Now that the large players are fielding products, we'll see even more. In most cases this design is offered beside other choices and might appeal to lower-risk employees."

Shelly Giebel, MD, an obstetrician-gynecologist in Temple, Texas, and an MSA user and advocate, said it was inevitable that health plans would move in the direction of MSAs. "Because of premium increases, employers are going to have to shift the cost of health care to the employee, and ultimately a cheap alternative obviously is the MSA, where people who exercise and choose not to smoke will reap the benefit of their healthy behavior." [...]