Politics & policy

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MSAs Fall Short Of Expectations, Says GAO Report

If medical savings accounts were a stock, they'd be falling --if not plummeting. But if they were a stock, they just might be a good buy right now.

According to a General Accounting Office survey, more than three-quarters of MSA vendors say that sales of qualified plans were lower than expected. But most experts expect enrollment to pick up once purchasers learn the ins and outs of the program.

When insurers leaped onto the tax-favored pilot program a year ago, they had tough sledding trying to market the plans to consumers. Many brokers were reluctant to sell MSAs because of high deductibles and low commissions.

But there's ample evidence that MSAs, like many stocks, simply suffer from bloated expectations. According to the GAO, the number of MSAs doubled between April and June. Marketing efforts may increase consumer awareness now — and the timing couldn't be better. This year's federal tax forms include a line item for an MSA deduction. Expect an enrollment surge this quarter.

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