Many studies show that health care consumers do make cost-conscious decisions when given a financial incentive to do so. For example, the RAND Corporation conducted a study of changes in people's health care decision making based on the size of the consumer's copayment. The study found that an individual who had to pay 50 percent of the cost of health care spent 25 percent less than did an individual with no copayment. Rather, the savings result from reduced utilization of optional services and cost-based selection among competing providers. Moreover, health expenses paid out of a medical savings account would entail no insurance administrative cost.
Insurance is a very inefficient way to pay for small or routine health expenses.
Medical savings accounts would cut insurance companies out of the vast majority of health care transactions. That would reduce both the overall cost of health care and the paperwork burden on doctors. Medical savings accounts would provide these individuals with a pool of money to pay for health care and health insurance costs during their uninsured spells. Moreover, because medical savings accounts belong to the individual and are completely portable, they alleviate the fear that the loss of a job will lead to the loss of insurance. The campaign against medical savings accounts is really just a continuation of the battle over the Clinton health care plan.