[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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