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Len Nichols, PhD, a health economist at the Urban Institute in Washington, says the outstanding flaw in MSAs is that they are likely to appeal only to the youngest, healthiest, and wealthiest of the population. Left behind in the traditional insurance market would be the older and sicker population, for whom costs would likely rise.

"The difficulty is that health expenditures are extremely skewed," Nichols tells WebMD. "One percent of the population accounts for 30% of all expenditures."

Additionally, some have feared that MSAs could be used by the very wealthiest -- who can pay out of pocket for even the most expensive care -- simply as a tax shelter.

Partly in response to these criticisms, the HIPAA law capped the number of allowable MSAs at 750,000 and limited them to self-employed individuals or employers with less than 50 workers. It also imposed minimum deductible requirements and restrictions on amounts that could be contributed to accounts.

Since that time, less than 100,000 MSA accounts have been formed. Scandlen says the restrictions have inhibited the growth of MSAs unnecessarily. He also disputes the notion that such accounts are only for the wealthy and healthy, citing research by the Rand Corporation showing that MSAs have broad appeal across income groups.

Now, there is reason to believe that the vision of MSAs may not have faded entirely. One patients' bill of rights proposal, sponsored by Republicans in the House of Representatives, contains a provision that would remove the restrictions currently imposed on MSAs. And during his campaign, President George W. Bush expressed support for medical savings accounts.

Scandlen also says that some businesses confronting high employee healthcare costs are beginning to develop MSA-like products for their workers -- even if they are not being called medical savings accounts.

"The same notion is taking on different forms," Scandlen says. "When HIPAA first passed, most [employers] were moving toward managed care. In the past five years, that attitude has changed dramatically. Now large employers are thinking that some kind of cash account for employees to pay directly for services makes sense."

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