It’s no secret that health care costs are rising, and health insurance is becoming less and less affordable. Employer groups, families and individuals alike are finding it more difficult to get quality health insurance at a price they can afford.

Insurance professionals speculate that one reason the cost of health care continues to rise at a rapid pace is that consumers often do not view health care costs as their own responsibility. In general, consumers do not know what the actual cost is of a physician office visit, a hospital visit, or the prescription drugs they take daily. However, there is a new alternative available.

The latest trend in health care has been the Medical Savings Account (MSA). MSAs have been around since 1996, but are just now gaining popularity. An MSA is a savings account usually set up by the insured’s broker to pay for incurred medical expenses in conjunction with a high-deductible medical plan. Because consumers are initially responsible for tracking and paying their own expenses out of this savings account, the MSA plan may help to make them more conscious of what they are spending on health care. Consumer tracking of expenses could lower the overall cost of health care as a direct result of increased consumer awareness.

MSA plans are often confused with Health Reimbursement Arrangements (HRA), or Flexible Spending Accounts (FSA). All three are tax-deferred plans, however there are significant differences. Unlike the HRA and FSA plans, the insured person controls an MSA, and any business that has 1-49 employees is eligible. The money in the account can also be used for non-medical expenses — with a penalty. A qualified MSA allows the funding to carry over from one year to the next, while an FSA has a use-it-or-lose-it within the current calendar year provision.

Bremerton-based KPS Health Plans has introduced several MSA plan options across Washington State. The Healthy Investor™ Medical Savings Account (MSA) has been available to selected Associations statewide since late 2001. In response to a high number of requests from small businesses, KPS began offering the MSA plan to groups with 1-49 employees in its 8-county commercial group service area in January. The Healthy Investor™ MSA is offered through a partnership with insurance broker Acordia Northwest.

“The Healthy Investor™ MSA is one of our most exciting new options,” said KPS President Elizabeth Gilje. “Employers have been asking for this type of account, and we are happy to be able to offer them the choice. The great thing about this plan is that small groups can take the MSA with a dual option, meaning they can select the MSA plan for the owners and officers, and offer a more comprehensive plan with lower deductibles to their employees.”

Although KPS reports a high level of interest in its MSA plan options, the future of the MSA is uncertain. The federal law permitting MSA accounts is due to expire this year, but MSA advocates plan to extend MSA legislation indefinitely, including modifications to the product that would ensure its future success. A federal proposal is currently under discussion to open MSA plans up to everyone with no limitations. The proposal is awaiting acceptance.

For more information, call 800-628-3753 or visit www.kpshealthplans.com.