Can a tax-free savings account help cut Marylanders? medical care costs?
Beginning Oct. 1, CareFirst BlueCross BlueShield, along with CareFirst BlueChoice Inc., added a high-deductible HMO plan paired with savings options to its portfolio. The offering will be available in Maryland, the District and Northern Virginia.
“By adding an HMO-based plan, CareFirst has given consumers another affordable option,” said Gregory A. Devou, CareFirst executive vice president and chief marketing officer.
This marks the Maryland-based insurance provider?s first venture into the medical savings account field touted by President George W. Bush as a way to control the cost of health care.
Participants allocate a portion of their income to be deducted before taxes and deposited in a dedicated account. Health care expenses not covered by their insurance, including health education, prescription drug co-payments and HMO deductibles can be drawn from that account. Any year-end balances roll over from year to year, and contributed dollars earn interest tax-free.
Medical savings accounts may be having an impact nationally, according to the insurance lobbying group America?s Health Insurance Plans.
A report by the Center for Studying Health Systems Change found growth in health care spending slowed for the fourth-straight year in 2005, while growth in prescription drug spending slowed for the seventh year.
In 2005, “drug price trends, as measured by the CPI, remained relatively stable at a low rate of growth,” the report states.
Consumers are taking advantage of cost-saving strategies like medical savings accounts and multitier drug coverage, the study released Oct. 3 found.
This “news is the latest validation of the value of a new generation of cost-containment tools and techniques developed by health insurance plans,” said Karen Ignagni, AHIP chief executive.
