Mandela: Father of MSAs
About the time that Nelson Mandela became South Africa’s president, there was wholesale deregulation of the country’s market for health insurance. As a result, virtually every major form of insurance that existed in the United States at the time competed on a level playing field in the South African market: PPOs, HMOs, MSA plans, etc. In fact, U.S. companies were involved in many of these ventures.
In a short period of time, Medical Savings Account plans became the most popular, capturing more than 50 percent of the market. However, as Shaun Matisonn explained in an NCPA study, there were no restrictions on the design of MSA plans like there were in the U.S. Whereas our plans are required to have an across-the-board deductible, in South Africa insurers were free to creatively use the accounts to create special programs for the chronically ill and to create economic incentives only in those areas and for those services where patience choice is appropriate and desirable.
This market, by the way, directly affects only about 20 percent of the population ― since everyone else tends to rely on free health care system. Like similar systems in other countries, government-provided care is characterized by limited resources and rationing by waiting.
I really don’t know why we couldn’t do this here. If you have a so-called “free” system (and nothing’s free of course) you will have to abide by the restrictions of that system. On the other hand, if you have your own MSA, HSA, whatever, at least you can have some freedom of choice.
This is new and interesting.
I think Singapore is an even better example of how a nation should use a strategy of compulsory medical savings.