[Congressional Record Volume 142, Number 95 (Tuesday, June 25, 1996)]
[House]
[Pages H6716-H6717]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                   WHY CONSUMERS SHOULD SUPPORT MSA'S

  The SPEAKER pro tempore. Under the Speaker's announced policy of May 
12, 1995, the gentleman from Florida [Mr. Stearns] is recognized during 
morning business for 5 minutes.
  Mr. STEARNS. Mr. Speaker, I hope the gentleman from New Jersey [Mr. 
Pallone] will stay around for just a moment to listen to this.
  In 1994, the then House majority leader, the gentleman from Missouri, 
Dick Gephardt, thought MSA's, medical savings accounts, were such a 
good idea that he included them in the Democrat leadership bill.
  In 1994, all but one Democrat on the House Committee on Ways and 
Means voted in favor of medical savings accounts in the Clinton health 
care reform plan. So I think the gentleman from New Jersey, Mr. 
Pallone, and others on the Democrat side who complain about medical 
savings accounts should realize that their leadership, not only in the 
House but in the Senate, when the Medical Cost Containment Act of 1992 
was--which included medical savings accounts--presented to the Senate, 
even Tom Daschle, was there sponsoring it. So, Mr. Speaker, I think it 
is appropriate that I talk about medical savings accounts this morning.
  We have heard a great deal from that side of the aisle, talk about 
how they are tax breaks for the rich, which is absolutely false, and I 
think we have all these Democrat leaders who have supported it, so I 
think the bottom line is, it is good for America. They were based upon 
the premise that the consumer, in this case the purchaser of health 
care, should have control over their health care dollars. This is 
important, because those of us who believe that by empowering people to 
have more control over their health care spending, they will become 
more cost conscious and in all likelihood would seek information to 
shop around, look at the marketplace.
  Mr. Speaker, let us ask the basic question: What are medical savings 
accounts? During debate on the Clinton health care bill, we learned 
that Americans want health care reform that will provide consumers with 
the ability to choose the type of health care plans that best suit 
their needs. Medical savings accounts would provide consumers with just 
such an opportunity.
  Under current tax law, third-party insurance is subsidized and self-
insurance is penalized. Every dollar an employer pays for third-party 
insurance is excluded from employee income. When employees try to save 
that money, it is taxed. Medical savings accounts should be given the 
same tax incentive as currently given to third-party health insurance 
premiums.
  Mr. Speaker, if we are to provide true health care reform, we must 
provide individuals with the options of being allowed to create medical 
savings accounts. On that side of the aisle, they have talked about 
giving retirement accounts for women who are at home and for working 
people. We had that in our American dream account. Medical savings 
accounts are under the same concept. They would enable consumers to use 
tax-free savings accounts to self-insure for routine, out-of-pocket 
medical expenses. The inclusion of a medical savings account would 
provide people with the opportunity to choose higher deductibles in the 
place of premium savings in individual medical savings accounts.
  Mr. Speaker, our health care bill, which the gentleman from New 
Jersey [Mr. Pallone] was talking about, provides that taxpayers would 
be permitted to have one account to make an annual deposit of no more 
than $2,000 if single, $4,000 if married. Under this bill, in order to 
make these contributions be tax deductible, an individual must be 
covered by a high deductible health care plan. By empowering consumers 
with choice and individual responsibility, healthy competition among 
insurance companies is created and it is better for all of us.

  In 1994, in the issue of the Journal of American Health Policy 
article entitled, ``Why Medical Savings Accounts Deserve a Closer 
Look,'' it said: ``Research has shown that these accounts give lower 
health care expenditures markedly without any negative health effects 
on individuals with such coverage.''
  What are some of the advantages? They are portable, total freedom of 
choice, allows spending on long-term care premiums, will increase the 
number of insured Americans and, of course, Mr. Speaker, they create 
wealth through all of us increasing our savings rate.
  Critics claim that health care has become too complicated and that 
consumers are no longer capable of making cost-conscious decisions. 
Several studies show that health care consumers do make cost-conscious 
decisions provided they are given the financial incentive to do so.
  Critics also claim that consumers will not seek preventive care in 
order to save money for these accounts, but studies show that they do 
not deter preventive care. What we find is that savings result from a 
more discriminating use of optional services, and consumers select less 
expensive health care benefits.
  Perhaps the criticism we hear the most is that these accounts would 
attract the healthy, leaving the sick with conventional insurance. In 
that case, the adverse selection or what is called cherry-picking, 
would cause an increase in the cost of traditional insurance. But this 
has not been shown to be true. Companies using this type of account 
have not experienced this problem. Several different groups and 
organizations have already established these accounts for their 
employees, and I believe the success they have met in so doing is a 
surprise for some of the critics.
  What do the polls tell us about the public's reaction to medical 
savings accounts? Well, of the 1,000 workers responding to a survey 
conducted by the Marketing Research Institute, 87 percent said they 
would like to have medical savings accounts. Of course, when I 
mentioned earlier about the critics, we have the gentleman from 
Missouri [Mr. Gephardt], we have the gentleman from South Dakota [Mr. 
Daschle], we have all the Democrats on the Committee on Ways and Means 
voting for medical savings accounts, so it is clear it is bipartisan.

[[Page H6717]]

  Mr. Speaker, let me close by also pointing out that 18 State 
legislatures have passed medical savings accounts legislation with 
overwhelming bipartisan support. Mr. Speaker, 68 million Americans 
already have access. We need to bring the rest of them in.

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