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Medicaid to offer HSA pilot program

Patients could use the "Health Opportunity Accounts" to visit any doctor -- even those who don't participate in Medicaid.

By Amy Snow Landa, amednews correspondent. March 13, 2006.

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Health savings accounts aren't just for the private market anymore.

President Bush has signed legislation that will allow up to 10 states to offer Medicaid recipients "Health Opportunity Accounts" that are similar to health savings accounts available in the private market.

The legislation originally was introduced by Sen. Mike Crapo (R, Idaho) and Rep. Mike Rogers (R, Mich.) in October 2005. It was later rolled into the budget reconciliation bill that President Bush signed into law last month.

The provision allows participating states to test whether HOAs encourage Medicaid recipients to be more cost-conscious about their health care decisions by giving them a stake in their health care spending.

Proponents note that HSAs in the private sector have shown that giving patients more control of their health care dollars motivates them to look for better value.

"That's especially needed in Medicaid, because people on Medicaid have had very little exposure to the actual cost of their health care consumption," said Grace-Marie Turner, president of the Galen Institute, a health policy research organization in Alexandria, Va., that advocates for consumer-driven health care.

But critics warn that putting these patients in the driver's seat could have a big downside.

"There isn't a lot of evidence that people in Medicaid are over-utilizing services," said Rachel Klein, deputy director of health policy at Families USA, a health care consumer group in Washington, D.C. "You don't want to be discouraging them from going to the doctor when they need to."