[Congressional Record Volume 141, Number 85 (Monday, May 22, 1995)]
[Extensions of Remarks]
[Pages E1090-E1091]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]


                        MEDICAL SAVINGS ACCOUNTS

                                 ______


                        HON. FORTNEY PETE STARK

                             of california

                    in the house of representatives

                          Monday, May 22, 1995
  Mr. STARK. Mr. Speaker, the debate on reforming our health care 
system has begun to focus on the potential role of medical savings 
accounts.
  I would like to enter into the Record some comments from business, 
consumer, and health policy organizations regarding medical savings 
accounts [MSA's]. There comments are helpful in evaluating the likely 
costs and benefits to be derived from MSA's. In sum, these 
organizations find that the risks of MSA's are high and the rewards 
are, at best, overstated.
  The attached also sheds light on one particular company that is 
profiting handsomely from MSA's, and how this is so. The level of 
profits generated by this company, and how they have chosen to spend 
them, give us reason to take pause.
  These comments follow.
                                                 February 1, 1995.

              Medical Savings Accounts--Not for Medicare!

       Dear Colleague: We have heard much about medical savings 
     account (MSAs) recently. Companies that stand to benefit 
     financially from MSAs--and those who have benefited from the 
     profits of these MSA proponents--have been quick to push 
     their merits. This week, Speaker Gingrich proposed to give 
     Medicare recipients vouchers to enroll in medical savings 
     accounts.
       More objective parties--business, consumer and health 
     policy organizations across the potential spectrum--have 
     concluded that the expansion of medical savings accounts will 
     exacerbate problems in the health insurance market.
       ``While on the surface these proposals have some appeal . . 
     . they pose serious problems . . . There does not appear to 
     be a way to design an MSA that is not detrimental to the goal 
     of achieving universal or near-universal coverage at a 
     reasonable cost.''--Center on Budget and Policy Priorities
       ``To illustrate the current misunderstanding of how MSAs 
     would generally operate, the [Academy] uses an example that 
     appeared in a letter released by Senator Phil Gramm . . . The 
     example seems clear enough. However, like many others, it 
     misrepresents what is generally financially possible.''--
     American Academy of Actuaries
       ``Our judgment is that the medical IRA is not going to 
     bring about the kind of universal coverage and the stopping 
     of cost shifting [[Page E1091]] that we would like to see . . 
     . There are a number of other problems we have with a medical 
     IRA that we think it will be found lacking in terms of where 
     we would like to see health reform go.''--US Chamber of 
     Commerce
       ``[The MSA] proposal does nothing for cost containment . . 
     . Once fully implemented, [the MSA] proposal would have 
     enormous negative effects on Federal revenue. It would create 
     a huge new tax advantage/subsidy, going mostly to the non-
     poor . . . It could have deleterious effects on primary 
     care.''--American Association of Retired Persons
       ``The likelihood that MSAs would be more attractive to 
     healthy families indicates a potential adverse selection 
     problem . . . In an unrestricted market, the difference in 
     premiums [between traditional and MSA plans] would grow over 
     time as the healthiest people in high-cost groups switch to 
     lower-cost plans.''--Congressional Research Service, 
     September 1994
       Advancing MSAs may be in the financial interests of a few, 
     but Medicare beneficiaries are not among them. Shown on the 
     reverse is the chief proponent of MSAs and some information 
     on this insurer's operations.
           Sincerely,
                                                       Pete Stark,
     Member of Congress.
                                                                    ____

       Insurance company advocating tax subsidies for MSA 
     insurance plans: Golden Rule Insurance Company.
       Percentage of Golden Rule insurance premiums going to 
     medical claims: 65.2%.
       Rating of Golden Rule's financial condition in ``1994 
     Best's Insurance Reports'': A+.
       Stated reason for Golden Rule's A+ rating: ``This 
     profitability is attributable to the company's careful 
     underwriting, its sophisticated claims system, and its 
     adequate rate increases.'' (emphasis added; translation: 
     ``they don't insure sick people.'')
                                                                    ____

       Cites from information on Golden Rule Insurance Company 
     contributions to Newt Gingrich compiled by the Office of 
     Congressman Stark.
       (1) Roll Call, August 18, 1994; Los Angeles Times, January 
     29, 1995; CNN, Inside Politics, October 12, 1994. Amount of 
     reported contributions from Golden Rule Insurance Company 
     executive to GOPAC, the political action committee of Speaker 
     Gingrich: $117,000.
       (2) Roll Call, September 15, 1994. Amount contributed by 
     Golden Rule Insurance Company to the Progress and Freedom 
     Foundation, sponsors of Mr. Gingrich's ``Renewing American 
     Civilization'' course: Amount not disclosed.
       (3) Los Angeles Times, January 29, 1995; The Atlanta 
     Journal and Constitution, September 24, 1994; Roll Call, 
     September 15, 1994. Amount contributed by Golden Rule 
     Insurance Company to ``Progress Report,'' a weekly talk show 
     on National Empowerment Television featuring Mr. Gingrich: 
     Sole sponsor. Amount not disclosed.
       (4) American Political Network, January 11, 1995; United 
     Press International 1995, January 10, 1995; US Newshire, 
     January 10, 1995. Amount of ``soft money'' contributed by 
     Golden Rule Insurance Company executives to GOP National 
     Party Committees (1/1/93-11/28/94): $523,775.
       (5) Los Angeles Times, January 29, 1995. Amount contributed 
     by Golden Rule Insurance Company to Mr. Gingrich's 1992 re-
     election campaign: $15,000.
       (6) CNN, Inside Politics, October 12, 1994. Amount 
     contributed by Golden Rule executives to Mr. Gingrich's 1994 
     re-election campaign: $20,000+.
     

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