[Congressional Record Volume 142, Number 85 (Tuesday, June 11, 1996)]
[Senate]
[Page S6024]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




    REPUBLICAN PROPOSAL ON MEDICAL SAVINGS ACCOUNTS AND THE HEALTH 
                         INSURANCE REFORM BILL

  Mr. KENNEDY. Mr. President, yesterday, House and Senate Republicans 
announced a compromise on medical savings accounts. In reality, this 
compromise is a capitulation to House Republicans who are more 
interested in creating an issue and serving a special interest 
constituency than in passing a bill.
  Medical savings accounts have become the Trojan horse that could 
destroy health insurance reform. This untried and dangerous proposal 
does not belong in the consensus insurance reform bill. It has already 
been rejected by the Senate. A bill containing it cannot be enacted 
into law and signed by the President.
  Democrats and the White House have offered a fair compromise, which 
would provide for a controlled and limited test of the MSA concept to 
see if it should be expanded. But the House Republican leadership has 
said that it will be their way or no way. As Majority Leader Armey said 
on Sunday, ``I will not give up medical savings accounts,'' and he 
dared the President to veto the bill. The latest proposal clearly 
reflects this partisan strategy.
  The Republican leadership pretends their proposal is a fair attempt 
to deal with concerns about medical savings accounts. But it is nothing 
of the kind. Under their proposal, medical savings accounts could be 
sold to all small businesses and the self-employed immediately. This 
opens MSA's to a massive market consisting of more than 40 million 
workers--one-third of the Nation's entire labor force. This is hardly a 
controlled, limited test.
  Even more serious, experts agree that the small business sector of 
the health insurance market is the most vulnerable to the disruption 
that medical savings accounts would cause. The Joint Tax Committee 
concluded that sales of medical savings accounts would be concentrated 
in small- and medium-sized firms.
  The proposal would clearly go beyond the bounds of what is 
acceptable, even if it stopped there. But it does not. After 3 years in 
which medical savings accounts are sold to this vast market, the 
accounts would be expanded to everyone. Only if both the House and 
Senate voted to stop the expansion would it be prevented. This is not a 
test. It is a travesty.
  The great danger of medical savings accounts is that they are likely 
to raise health insurance premiums through the roof and make insurance 
unaffordable for large numbers of citizens. They will discourage 
preventive care and raise health care costs. They are a multibillion-
dollar tax giveaway to the wealthy at the expense of working families 
and the sick. Their cost could balloon the deficit by tens of billions 
of dollars.
  The most troubling aspect of medical savings accounts is the risk 
that they will destroy the health insurance pool, and price 
conventional insurance out of the reach of most American families. 
Medical savings accounts will raise premiums for the vast majority of 
Americans--especially those who are sick and need coverage the most--by 
siphoning the healthiest people out of the insurance pool. As premiums 
rise for everyone else, more and more working families will be forced 
to drop comprehensive coverage. In the words of the Congressional 
Budget Office, medical savings accounts ``could threaten the existence 
of standard health insurance.'' Mary Nell Lenhardt, senior vice 
president of Blue Cross and Blue Shield concluded that MSA's destroy 
``the whole principle of insurance.''
  The leading proponents of medical savings accounts are insurance 
companies like the Golden Rule Co., which have been the worst abusers 
of the current system. The strongest opponents of medical savings 
accounts are organizations representing working families, senior 
citizens, consumers, and the disabled, who have the most to lose if the 
current system of comprehensive insurance is destroyed. We know whose 
voice should be heard when Congress decides this issue--not the voices 
of greedy special interests, but the voices of those who depend on 
adequate insurance to get the care they need at a price they can 
afford.
  The Kassebaum-Kennedy bill passed the Senate by a bipartisan vote of 
100 to 0, without medical savings accounts. It passed unanimously, 
because it contained the noncontroversial, important insurance reforms 
that everyone agreed on. The American people deserve to see those 
reforms enacted, not jeopardized by the last-minute addition of a 
partisan poison pill.
  House Republicans should not turn a bipartisan bill that could be 
passed by both Houses today and signed by the President tomorrow into 
just another election year issue. The American people deserve a fair 
compromise on this highly controversial issue, and I continue to be 
hopeful that we can find a satisfactory compromise to save this needed 
bill.
  To those who genuinely believe that medical savings accounts offer an 
improvement in the health care system, I say let us work together to 
devise a fair test of the concept that will not put millions of 
American families at risk. The American people's hopes for insurance 
reform should not be held hostage to a partisan, special interest 
agenda.
  Mr. President, I yield the floor.
  Mr. GRAHAM addressed the Chair.
  The ACTING PRESIDENT pro tempore. The Chair recognizes the Senator 
from Florida.
  Mr. GRAHAM. Mr. President, I ask unanimous consent to speak for 10 
minutes for purposes of introducing two bills.
  The ACTING PRESIDENT pro tempore. Without objection, it is so 
ordered.
  Mr. GRAHAM. Mr. President, thank you.
  (The remarks of Mr. Graham pertaining to the introduction of S. 1859 
are located in today's Record under ``Statements on Introduced Bills 
and Joint Resolutions.'')
  Mr. ROTH addressed the Chair.
  The ACTING PRESIDENT pro tempore. The Chair recognizes the Senator 
from Delaware.

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