Ron Paul's Texas Straight Talk - A weekly Column
August 10, 1998
MSAs best option for better health care
Americans should have greater say over medical treatment

As a physician, I am painfully aware of the shortcomings of our medical system. But few are as dangerous as the rush towards managed care.

Managed care is dangerous because it all but removes the two most important people from the decision-making process for medical care: the patient and the doctor. The managed care system is one which no one seems to want, yet no one can avoid.

With health-care costs rising at ever-increasing rates, many of us feel we have no choice but to surrender to "the system." The costs are rising for many reasons, most notably, of course, is government meddling in medicine in the first place, followed closely by frivolous lawsuits.

But there is a better way, a way which has been gaining attention and even a growing degree of political respectability; the better way is the medical savings account, otherwise known as MSAs.

MSAs are a terrific tool because they allows the individual to save money - tax-free - for use in paying routine medical costs. As consumers are able to set aside cash for their routine, or even emergency, medical expenses, they are able to increase control of their care. With their own cash to spend the way they like with whom they like, the patient is no longer held back by the cost concerns of a managed care organization.

The MSA will help keep down the costs associated with routine medical care simply because the physicians and hospitals will now have an incentive to offer the best service at the best price. And as the patient is able to negotiate with the doctor, better arrangements best suited for that patient can be made.

For most people, an MSA will not take care of all their lifetime medical-care expenses, and for that catastrophic health insurance policies can be purchased. But for routine medical expenses, MSAs can help everyone.

But MSAs are still not a reality. Recently, the House of Representatives passed the Patient Protection Act; while an otherwise bad piece of legislation, it did move us closer to universally available tax-free MSAs. Essentially, the legislation removed restrictive caps on the MSAs and changed our tax laws so that either an employer or an employee could contribute to the accounts. Further, under current law, a person can only contribute one-twelfth of their annual allowable MSA total in a given month. The recently-passed legislation allows for single-time annual contributions.

It is important to note that while the House has passed this legislation - with all its many faults - the Senate has not, and there is some indication that the president will veto it.

If we are serious about reforming our system of health care, the key must be allowing for more choices and more freedom, not further restricting patients and doctors. The MSA is tool whose time has come.

Ron Paul represents the 14th District of Texas in the United States House. He can be contacted at his Washington office, 203 Cannon HOB, Washington, DC 20515, or at his web site (