Controlling Risk Segmentation under Employment-based Medical Savings Accounts
How do employers decide whether to offer medical savings accounts (MSAs) to their employees? Researchers at the University of Pennsylvania’s Wharton School addressed the question of how employers in medium- and large-group firms think about MSA-induced risk segmentation in the health insurance market. They: 1) conducted a simulation analysis under different levels of premium reduction or employer contribution to the MSA account to analyze the financial impact of these different thresholds; and 2) surveyed employee benefit specialists and consultants and ask them whether, under various "realistic circumstances," they would choose to offer MSAs as an option and whether they would adjust the premium reduction/employer contribution to control the amount of risk segmentation. The objective of the study was to help inform the policy debate as to how medium and large-group employers say they would implement MSAs under various conditions.