[Congressional Record Volume 150, Number 30 (Wednesday, March 10, 2004)]
[House]
[Page H992]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                        HEALTH SAVINGS ACCOUNTS

  The SPEAKER pro tempore. Under a previous order of the House, the 
gentleman from New Mexico (Mr. Pearce) is recognized for 5 minutes.
  Mr. PEARCE. Mr. Speaker, I rise this evening to discuss the inclusion 
of health savings account in the Medicare legislation. It is one of the 
most exciting provisions to business owners in my district.
  Health savings accounts are going to change the way that our country 
looks at health care. It is going to change the way that our companies 
buy health care. Basically a health savings account is simply an IRA. 
It is a medical IRA. It is a medical IRA where we are allowed to put 
money in tax free at any age up to $5,500 a year. An employer or the 
plea can make the contribution.
  The nice thing about the health savings account is that it can be 
taken out at any age if it is used for medical purposes. So unlike 
other IRAs which have to be deducted or taken out of the savings 
accounts after you are 62\1/2\, health savings accounts can be taken 
out now at any age. It can be used to pay for premiums, deductibles, 
co-pays, prescription drugs, medical supplies or any medical 
treatments.
  The value of this is, Mr. Speaker, that we are going to get to about 
30 percent more buying power with our dollar because we make tax free 
contributions into the plan and we can take tax free contributions out 
if we pay for legitimate medical expenses.
  The nice thing also is that it becomes a part of your estate. It 
travels with you. It is a thing that will go to the next generation if 
you do not use it. And so it is a way for you to prepare for your 
medical expenses, but if you do not use the account, then it becomes a 
way for your children to pay for their medical expenses.
  I think that the example of my company is a very good one, Mr. 
Speaker. We used to have a company with 50 employees. Almost every year 
we gave bonuses to employees. I would tell you that if we still owned 
the business, that we would begin to pay those bonuses sometimes 2, 3, 
4, and $5,000 a year into the health savings account. That way we could 
begin to have the employees use tax free money to pay for their 
premiums in the program, and if they used the medical services to pay 
for their deductible, so with tax free money.
  Now, if I am paying $5,000 a year into an account for every employee, 
2 or 3 years down the road, each employee would probably have 10 to 
$15,000 in their medical savings account, their health savings 
accounts. At that point, I would begin to shop for $5,000 deductible 
rather than $500 deductible. The resulting collapse in premiums is 
something that I will guarantee will be attractive to every single 
small business owner in America and most large businesses. Each 
employee is going to want to look at this as a way to begin to prepare 
for their medical future.
  The important aspect of the health savings account is that after we 
establish these large accounts to be used for medical purposes for our 
employees, and they know it is a part of their estate, they will begin 
to look at their medical decisions with regard to the amount of money 
that is coming out of their health savings account. It is one of the 
things that we think will depress the demands, the arbitrary demand 
that sometimes goes along with medical decisions today.
  We think that the health savings accounts is one of the most 
important pieces of legislation passed during the past year. When 
employers in my district hear about it, they call our office and begin 
to ask can they buy that now.

                              {time}  2000

  Most insurance companies will begin to have plans this year. Most are 
saying to me that they will have the plans up and running by the mid-
year June of 2004. I think that in the future years, as employers and 
employees alike begin to combine their efforts into the health savings 
account, we are going to find real changes in the way that medical care 
is paid for in this country, and that is the beginning point of most of 
the reforms that are going to make medical insurance available and 
affordable to all Americans.
  Mr. Speaker, I salute this House in passing the prescription drug 
bill with the Medicare reforms that included the Health Savings 
Account.

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