[Congressional Record Volume 142, Number 67 (Tuesday, May 14, 1996)]
[Extensions of Remarks]
[Pages E797-E798]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




 MEDICAL SAVINGS ACCOUNTS: DELTA DENTAL EXPLAINS WHY THEY ARE ABOUT AS 
               GOOD FOR HEALTH CARE AS AN ABSCESSED TOOTH

                                 ______


                        HON. FORTNEY PETE STARK

                             of california

                    in the house of representatives

                         Tuesday, May 14, 1996

  Mr. STARK. Mr. Speaker, following is a letter in opposition to 
medical savings plans from Delta Dental, the large dental health care 
plan that serves about 27 million Americans.
                                                      May 3, 1996.
     Hon. Fortney Pete Stark,
     U.S. House of Representatives, Cannon Building, Washington, 
         DC.
       Dear Representative Stark: I am writing to urge you to 
     oppose the inclusion of Medical Savings Accounts (MSAs) in 
     healthcare reform legislation currently pending in Congress 
     (HR3103).
       As you know, Delta Dental Plan of California is the state's 
     oldest and largest dental health plan, covering almost 12 
     million people in our commercial and government programs 
     throughout California and the nation. We are a member of the 
     nationwide Delta Dental Plans Association, which serves more 
     than 27 million Americans and includes participation of 67 
     percent of the nation's dentists.
       Delta Dental Plan of California supports the primary 
     objectives of the current incremental healthcare reform 
     legislation to provide portability and limit preexisting 
     medical exclusions. It is important to note that dental 
     coverage plays an essential role in our nation's healthcare 
     system. In fact, dental benefits embody the qualities being 
     sought in healthcare reform by emphasizing primary care and 
     preventive services, holding patients responsible for a 
     portion of the services they receive and controlling costs. 
     According to the Institute of Medicine, regular dental care 
     dramatically reduces dental disease, saving $4 billion 
     annually. As a share of national health expenditures, dental 
     costs have actually declined over the past three decades--
     from 7.4 percent in 1960 to 5.3 percent in 1990. While 
     medical care costs were skyrocketing, the cost of dental care 
     rose at a rate less than half that of physicians' services 
     and one-third the rate of hospital costs.
       While MSAs may help lower healthcare costs for some, they 
     run counter to the principles of a sound dental care program.

[[Page E798]]

       MSAs discourage preventive care. Unlike physicians, 
     dentists have an extensive, cost-effective set of preventive 
     procedures to draw upon. By emphasizing preventive services, 
     dental insurance helps improve health and lower treatment 
     costs. MSAs, on the other hand, tend to discourage 
     preventive, routine services. I am concerned that 
     individuals will treat MSAs as cash savings and be more 
     likely to regard dental care as something that can be 
     postponed. By delaying routine care until dental problems 
     are at more advanced stages, the eventual cost of 
     treatment will be higher.
       MSAs are less cost-effective. MSAs may actually result in 
     higher employer benefit costs. Most healthcare dollars are 
     spent on a small portion of the population in high amounts. 
     Yet under an MSA option, individuals who are otherwise low 
     utilizers to healthcare would be eligible to receive the full 
     MSA contribution from their employers.
       MSAs could lead to adverse selection and higher premiums. 
     Young, healthy and financially well-off individuals are more 
     likely to choose MSAs, leaving the poorer, sicker individuals 
     in the insured population. Under those circumstances, 
     employer premium costs would increase significantly.
       I urge you to oppose the inclusion of MSAs in the final 
     healthcare legislation. Should you have any questions or need 
     further information, please feel free to call me.
       Thank you for your time and consideration.
           Sincerely,

                                              William T. Ward,

                            President and Chief Executive Officer,
     Delta Dental Plan of California.

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