With medical savings accounts gaining in popularity among higher-income people, the Medical Association of Georgia wants the state's poor to have the same healthcare freedoms.
The group's push for a Medicaid MSA pilot project is keeping step with many states, which also are considering Medicaid MSAs.
At its recent annual meeting, the association voted to recommend that the Georgia Department of Medical Assistance launch an MSA pilot.
"It gives a little more dignity to the Medicaid patient," said Cam Grayson, director of health policy and programs for the medical association. "It doesn't make them a second-class citizen."
A spokeswoman for the state department that administers Georgia's Medicaid program responded: "There's nothing we won't study."
Georgia has about 1.2 million Medicaid recipients and spends an average of $2,600 per year per recipient.
The specifics of the medical association's recommendation haven't been worked out, but the theory is this: Medicaid money would be put into MSAs so recipients could use it to buy care from doctors of their choice. A high-deductible insurance policy also would be put into place to cover what the MSA doesn't.
Supporters say MSAs could hold down healthcare costs. Allowed to choose their own doctors, recipients would be encouraged not to overuse the system, they argue.
What's not clear is what would happen to money left over in an MSA held by a Medicaid recipient.
That would be the primary difference between a Medicaid MSA and a private MSA, where unspent money can be left to garner tax-free interest or be withdrawn for nonmedical expenses, minus income taxes and a penalty (May 5, p. 108).
Federal legislation last year made MSAs available to the self-employed and to employees of small companies as part of a pilot project.
State Sen. Tom Price, M.D., who represents an area near Atlanta, proposed a Medicaid MSA bill in Georgia's last legislative session. But his idea didn't get very far. "That involves significant politics in the state of Georgia," he said. The state is focused on capitated, mandated managed care, not MSAs, he said.
In Montana, lawmakers recently approved starting a Medicaid MSA pilot project in 1999. But the state is expecting an uphill battle from HCFA for a waiver to get the pilot going. Montana has proposed that any money left over in MSAs be given to the recipients to use as they please.
"People will make wise healthcare decisions if they have an incentive to do it," said Nancy Ellery, administrator of Montana's health policy and services division.
Virginia also has passed legislation to test Medicaid MSAs.
Louisiana is another state looking at MSA-type alternatives. The state is considering a voucher program, much like an MSA, for Medicaid recipients, said Bobby Jindal, secretary of the Louisiana Department of Health and Hospitals. The difference would be that any money left over in an individual's account most likely would be rolled over into a pool for catastrophic coverage.
But Medicaid MSAs don't come without their hurdles, said Merrill Matthews Jr., vice president of domestic policy for the National Center for Policy Analysis in Dallas. The problems are as much politics as logistics, Matthews said.
For example, two years ago, Texas' Health and Human Services Commissioner told legislators that while MSAs had the potential to lower costs, "financial and regulatory considerations undermine this potential."
Besides questions about what to do with any leftover money, there also are issues, such as what to do with an MSA as people drift on and off the Medicaid rolls, Matthews said.
Still, Matthews said he thinks MSAs could lower administrative costs. "The problem that you have to overcome is the public perception that low-income families are getting a real good deal that lower-middle-income families might not be getting," he said.
Charles McDowell, M.D., a delegate to the Georgia medical association, fears critics will say it's physicians who stand to gain from MSAs if Medicaid recipients are allowed to choose their providers. McDowell contended that doctors will be regulated by market forces not to overcharge patients.
"Trust people to make the best decisions for themselves," he said.