THERE'S ANOTHER HEALTH CARE OPTION MEDICAL SAVINGS ACCOUNTS OFFER AFFORDABLE ALTERNATIVE TO HMOS.

Byline: Scott Holleran

WITH escalating co-pays - Kaiser Permanente recently hiked premiums 11 percent - it's no secret anymore that a managed care plan, such as an HMO or PPO, may not offer the cheapest - let alone best - health care. However, I've discovered a solution that's better - and cheaper.

It's worth bearing in mind that, when it comes to matters of life and death, cheap is relative. HMO horror stories have caused many physicians and patients to explore old-fashioned, fee-for-service health insurance. That's basically what I have - catastrophic health insurance with a medical savings account to cover expenses.

As a former HMO enrollee - I could wallpaper my living room with HMO and PPO cards - my medical savings account and insurance have liberated me from managed care.

I pay a monthly premium for my health insurance - a catastrophic, high-deductible policy that covers every penny over the deductible. The higher deductible - mine is more than $2,000 - means lower premiums. But it also means I'm covered by a top-quality policy.

If I get sick, I can visit any physician without permission from a committee. There's no co-pay, no waiting for an appointment, no requirements that medications be generic, and no more lists. When I recently told a friend that my doctor sees me within 24 hours, then serves me coffee in the waiting room and sees me five minutes after arrival, his jaw dropped; he's still waiting for his PPO doctor to see him for a potentially serious illness that he reported six weeks ago.

There's more - my insurance policy allows me to earn money. I make an annual, tax-deductible contribution to my medical savings account. The money in my MSA earns interest, rolls over - unlike flexible savings plans - and I own the account. Funds can be used for medical costs - vitamins, chiropractic, vision, psychotherapy - with neither tax nor penalty. I can choose to pay out of pocket and let the MSA earn interest. The choice is mine.

Paying out of pocket for medical care is easier than one might suspect. Sure, it takes planning, but I have an incentive to keep costs down. I've asked each doctor to provide a discount and each has complied with my request - some as high as 30 percent.

Cutting costs doesn't mean I don't go to the doctor, either. I visit a general physician for an annual examination and I also visit an eye doctor, a dentist and an orthodontist. They're all more friendly, professional and discerning than my HMO and PPO doctors ever were - and why not? They know they'll get paid for their work. It's no accident that none of my doctors accepts HMOs. Like me, they prefer autonomy over bureaucracy. MSAs are win/win/win for the patient, physician and insurer.

There is a catch. Congress forbids most Americans from owning an MSA and the accompanying top-quality insurance. My own eligibility is based on my status as a self-employed individual.

Expansion of the accounts to all Americans, supported by insurers, banks, physicians and patient advocacy organizations, is one of presidential candidate George W. Bush's goals.

Bush, who embraced MSA expansion during my recent interview in Los Angeles, proposes allowing employees to convert their flexible savings (use-it-or-lose-it) accounts into MSAs.

MSAs have their critics, most of whom are advocates of socialized medicine. MSA opponents, including California Sens. Dianne Feinstein and Barbara Boxer, claim that MSAs favor young and healthy patients. According to the president of one California MSA insurer, Indiana-based Medical Savings Insurance, the opposite is true.

CEO Randy Suttles cites Treasury Department statistics and company data on the typical MSA patient: the median age of an MSA policyholder is 43 and one-third of patients were previously uninsured.

``Almost three-quarters of our business are families between the ages of 30 and 50,'' Suttles told me during an interview. What if the highest deductible - $5,100 for a family plan - leaves a family strapped in a catastrophe? Suttles's firm offers a rider to cover the policyholder up to the deductible. And the 44-year-old Suttles practices what he preaches: His own family is covered by an MSA.

Some patients prefer an HMO and that's their right. But for those of us who prefer higher quality health care, an affordable alternative awaits approval by Congress. As someone who's witnessed the advantages first-hand, I say: Let Americans have free choice in medicine. It's each American's right - and it works.