Publicly Funded Medical Savings Accounts: Expenditures and Distributional Impacts
AbstractThis paper presents the findings from simulations of the introduction of publicly funded Medical Savings Accounts in the province of Ontario, Canada. The analysis exploits a unique data set linking population-based health survey information with individual-level information on all physician services and hospital services utilization over a four year period. The analysis provides greater detail than have previous analyses regarding: the distributional impacts of publicly funded MSAs across individuals of differing health statuses, incomes, ages and current expenditures; the impact of differing degrees of risk-adjustment for MSA contributions; and the impact of MSA funding over multiple years, incorporating year-to-year variation in spending at the individual level. In addition, it analyses designs for publicly funded MSAs than existing studies. Government uses information available from period t-1 to allocate its budget for year t between MSA contributions and catastrophic insurance in a manner that is actuarially fair for the public sector: the government first withholds funds equal to expected catastrophic insurance payments under the MSA plan, and then allocates only the balance to individual MSA accounts. The government captures the savings associated with reduced health care utilization under MSAs and we examine deductibles that vary by income rather than current health care expenditures. The impacts on public expenditures under these designs are more modest than existing studies and under plausible assumptions MSAs are predicted to decrease public expenditures. MSAs, however, are predicted to have unavoidable negative distributional consequences with respect to both public expenditures and out-of-pocket spending.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by Centre for Health Economics and Policy Analysis (CHEPA), McMaster University, Hamilton, Canada in its series Centre for Health Economics and Policy Analysis Working Paper Series with number 2007-01.
Length: 40 pages
Date of creation: 11 Apr 2007
Date of revision:
Contact details of provider:
Postal: CRL Building, 282, 1280 Main Street West, Hamilton, Ontario L8S 4K1
Phone: (905) 525-9140, extension 22122
Fax: (905) 546-5211
Web page: http://www.chepa.org/
More information through EDIRC
Medical Savings Accounts; Health Care Financing; Health Care Funding; Cost Sharing;
Find related papers by JEL classification:
- I10 - Health, Education, and Welfare - - Health - - - General
- I11 - Health, Education, and Welfare - - Health - - - Analysis of Health Care Markets
- I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health
You can help add them by filling out this form.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Lyn Sauberli).
If references are entirely missing, you can add them using this form.