Are MSA Regulations Too Rigid and Complicated?
Congress was far too prescriptive in program design. For example, HIPAA set the deductible to fall within a very narrow range (between $1,500 and $2,250 for individuals). But no one had studied the market to determine the “best level,” and because the law was so restrictive it was impossible for insurers to adjust to meet market demands. Some people already had deductibles of $5,000 or more and would have had to lower their existing deductible to qualify for the MSA. On the other hand, many people with lower deductibles (say, $200 or $250) might have been interested in gradually raising their deductible — to $500, then $1,000, then $1,500 or more — as they built up MSA funds to cover the growing deductible. It would have been far better for Congress to authorize the concept in broad strokes and see how the market evolved. South Africa, for example, has allowed for much greater flexibility in MSA program design, and the results have been striking — MSAs are now the choice of one-h
