Yes — Health Savings Accounts.
The new year will bring something of a revolution in American health care. Insurance companies such as Golden Rule, Fortis and Aetna will soon be marketing Health Savings Accounts, which promise a new era of individual choice for health insurance.
HSAs, the saving grace of the Medicare prescription drug bill, are the new and improved version of Medical Savings Accounts. They promise individuals and employers relief from spiraling health costs, and without the need for restrictive HMOs.
The basic idea is to pair an inexpensive insurance policy that has a high deductible — $1,000 or more for an individual, $2,000 for a family — with a tax-free savings account. Individuals would thus be covered in case of serious injury or illness. But they would also have an incentive to consume basic health services wisely, since any unspent account balance could be rolled over from year to year. Such accounts could grow to be substantial over a lifetime — a good thing, since health expenses tend to increase with age, and everyone knows Medicare isn't sustainable in its current form.
The Treasury Department announced rules for new HSA policies yesterday, and private insurers are already jumping into the market. A glimpse of their market potential is provided by South Africa, of all places. After the Mandela government deregulated South Africa's private insurance market in 1994, HSA-type plans quickly captured about two-thirds of it.