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Demographic Development and Moral Hazard: Health Insurance with Medical Savings Accounts

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  • Jonas Schreyogg

    (Department of Health Care Management, Faculty of Economics and Management, Berlin University of Technology, Secr. EB2, Straße des 17. Juni 145, 10623 Berlin, Germany. Email: jonas.schreyoegg@tu-berlin.de. Phone: ++49-30-314-22627; Fax: ++49-30-314-28433)

Abstract

In times of ever-rising health expenditures it is becoming more and more obvious that conventional models for funding health care are increasingly experiencing difficulties in meeting this challenge. The concept of Medical Savings Accounts (“MSAs”) represents an innovative and so far rarely analysed alternative for the funding of health care systems. In this concept an anticipated amount of money needed is saved up ex ante by each individual in a special account set aside to cover health care expenses. Since, however, health care expenses for certain kinds of treatment frequently exceed the financial capacity of the individual, Medical Savings Accounts are normally introduced in combination with health insurance covering defined services with higher financial risk. From a theoretical point of view the MSA concept helps to counteract the phenomenon of moral hazard in health insurance systems, at the same time coping with the future challenges posed by demographic development. This paper also examines experience gained so far in the implementation and use of Medical Savings Accounts in different countries. It draws a mixed but positive picture of the results. Therefore it could be feasible to integrate certain elements of this concept into health care systems of European countries. The Geneva Papers on Risk and Insurance (2004) 29, 689–704. doi:10.1111/j.1468-0440.2004.00311.x

Suggested Citation

  • Jonas Schreyogg, 2004. "Demographic Development and Moral Hazard: Health Insurance with Medical Savings Accounts," The Geneva Papers on Risk and Insurance - Issues and Practice, Palgrave Macmillan;The Geneva Association, vol. 29(4), pages 689-704, October.
  • Handle: RePEc:pal:gpprii:v:29:y:2004:i:4:p:689-704
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    Cited by:

    1. Jonas Schreyögg & Lim Meng Kin, 2004. "Health-Care Reforms in Singapore - Twenty Years of Medical Savings Accounts," ifo DICE Report, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 2(3), pages 55-60, October.
    2. Zhang, Hui & Yuen, Peter P., 2016. "Medical Savings Account balance and outpatient utilization: Evidence from Guangzhou, China," Social Science & Medicine, Elsevier, vol. 151(C), pages 1-10.
    3. Pablo Gottret & George Schieber, 2006. "Health Financing Revisited : A Practitioner's Guide," World Bank Publications, The World Bank, number 7094, August.
    4. Michel Grignon, 2005. "Aging, Health and Aggregate Medical Care Spending in France," Department of Economics Working Papers 2005-05, McMaster University.

    More about this item

    JEL classification:

    • H4 - Public Economics - - Publicly Provided Goods
    • I1 - Health, Education, and Welfare - - Health
    • L3 - Industrial Organization - - Nonprofit Organizations and Public Enterprise
    • O2 - Economic Development, Innovation, Technological Change, and Growth - - Development Planning and Policy

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