[Congressional Record (Bound Edition), Volume 151 (2005), Part 13]
[HOU]
[Pages 17524-17525]
[From the U.S. Government Publishing Office, www.gpo.gov]




   HEALTH SAVINGS ACCOUNTS: A SOLUTION TO THE HIGH COST OF AMERICA'S 
                           HEALTH CARE SYSTEM

  The SPEAKER pro tempore. Pursuant to the order of the House of 
January 4, 2005, the gentleman from Pennsylvania (Mr. Fitzpatrick) is 
recognized during morning hour debates for 5 minutes.
  Mr. FITZPATRICK of Pennsylvania. Mr. Speaker, I rise today to address 
the high cost of America's health care system and also to highlight a 
solution to this problem that not only reduces the number of uninsured 
in the United States, but gives consumers the ability to rein in the 
high price of health care on their own terms.
  Everyone in this Chamber and across the Nation knows that our Nation 
is in the midst of a health care crisis. The crisis not only affects 
patients, but our health care professionals as well. Rising health care 
costs have left nearly 45 million Americans without health insurance 
and thousands of small businesses struggling to cover their employees. 
In my home State of Pennsylvania, over 50 percent of Pennsylvanians 
surveyed said their family has had difficulty paying the cost of health 
care or obtaining insurance for their dependents.
  Since 2001, the cost of health insurance has risen 59 percent. In 
2004, employers who offered health insurance benefits were paying an 
average of 11 percent more for health insurance premiums, making that 
year the fourth year of double-digit increases in premiums.
  Last year, President Bush spoke of the need to create an ownership 
society in America. His idea was simple: Pass laws to enable our 
families to take greater ownership in their investments, their 
financial security and their future. The idea of an ownership society 
has already resulted in a booming housing market, impressive job growth 
and historic economic productivity.
  I come to the floor today to say that the ownership society can also 
change health care as we know it today through the use of Health 
Savings Accounts. Designed as part of the Medicare Modernization Act of 
2003, Health Savings Accounts are tax-free accounts that empower 
consumers to take control over their own health care expenses.
  The principle is simple: If a person has a health insurance plan with 
a high deductible of at least $1,000 for an individual or $2,000 for 
family coverage, that person can make pre-tax contributions to a 
savings account specifically designed to handle health insurance.
  Health Savings Accounts are portable, interest-bearing financial 
instruments. Like a 401(k), contributions to HSAs are made with pre-tax 
income. Like an IRA, the account grows tax-free and can also be moved 
from job to job. There is no penalty for the removal of money from an 
HSA, and if an individual does not use any money from an HSA over the 
course of a year, the money is not lost. Instead, it is rolled over 
into the next year and without penalty.
  Due to the ability of account holders to contribute 100 percent of 
their deductible in pre-tax income into an HSA, consumers gain an added 
benefit by having health insurance plans with higher deductibles. The 
higher the deductible, the more they are able to invest without a tax 
penalty.
  For business owners, especially small businesses, HSAs allow 
employers to lower health care spending and simultaneously reap a tax 
benefit. These incentives will motivate more businesses to take 
advantage of Health Savings Accounts.
  I can relate to you a first-hand account of the success of HSA for 
small businesses. Last week, I hosted a Small Business Forum back in my 
State of Pennsylvania that brought together small business owners and 
employees from across my district to discuss the issue of the cost of 
rising health care premiums.
  The gentleman from Illinois (Chairman Manzullo) and I heard from 
George Donovan, the principal of a small architectural firm that 
employs 30 people. Mr. Donovan testified that the health insurance he 
pays accounts for nearly 50 percent of his total insurance costs. Three 
years ago, his firm's health insurance premium was $120,000 per year. 
By switching to an HSA, he was able to cut that amount by half, to just 
$60,000, in his first year.
  Like many employers, George Donovan does not believe in employing 
individuals without health insurance. He found through staff interviews 
that health insurance is the number one criteria for accepting a job or 
for staying

[[Page 17525]]

with his firm. By all measures, his adoption of HSAs has helped his 
bottom line, as well as allowed him to retain trained and talented 
staff.
  Health Savings Accounts empower Americans across the country to make 
informed choices. Instead of being tied into a traditional plan that 
limits choice and keeps the consumer at arm's length from the health 
care market, Health Savings Accounts allow individuals and businesses 
to take an active role in choosing how to spend their money.
  According to Andy Laperriere in a Wall Street Journal article of 
January 24 of this year, ``health care is the only sector in the 
economy where there is almost no price transparency and no price 
competition.''
  Laperriere's article is correct. How many of us actually understand 
the cost of a medical test or procedure? Most of the information in a 
medical or hospital bill is too complicated to understand, and most 
health insurance plans compound that confusion.
  HSAs create an economic incentive for consumers to shop for care 
competitively, become involved in the market and save more money with 
HSAs. Since you are able to keep that money that you do not spend in 
your HSA, it makes sense to purchase the best care at the lowest 
possible price. Therefore, the widespread use of HSAs will create an 
educated class of consumers that will cut administrative costs, lower 
overhead and reduce the cost of health care for the majority of 
Americans.
  Mr. Speaker, I call on my colleagues to support Health Savings 
Accounts and legislation that will expand and support their use. The 
best way to lower the cost of health care is to make the consumer an 
active participant in the market. Health Savings Accounts do just that, 
and bring us one step closer to an ownership society.

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