[Congressional Record (Bound Edition), Volume 152 (2006), Part 1]
[Senate]
[Pages 973-974]
[From the U.S. Government Publishing Office, www.gpo.gov]




                        HEALTH SAVINGS ACCOUNTS

  Mr. HATCH. Mr. President, last week the President of the United 
States came to us with an ambitious domestic policy agenda for the next 
year. There were many noble goals outlined in that speech. But in my 
opinion, one of the most important and most necessary is his proposal 
to expand health savings accounts, or HSAs.
  There is not a single person in this institution who fails to 
recognize the ever-growing problem of health care expenses for ordinary 
Americans. For at least a decade now, this debate has been front and 
center in American politics. The American people are fed up and are 
telling us they want solutions to this crisis.
  In the last 30 years we have seen true revolutions in the way 
consumers do business in this country. Informed American consumers are 
increasingly involved in a direct way in making decisions on issues 
that affect their lives and that of their families. As an individual:
  It is easier to invest today.
  And it is easier to bank today.
  There is more choice in education. And there are more opportunities 
in the workplace.
  But almost uniquely in the American economy, our health care system 
is becoming more expensive and more difficult for individuals to make 
personal choices regarding their care. Because of the current structure 
of insurance plans, most consumers do not have the information they 
need with regard to the cost or the quality of health care that they 
receive. Information is readily available to make a value-driven 
decision on purchasing a television or a cell phone, but when it comes 
to health care, the consumer has little basis on which to make a 
rational quality and cost-based decision. What separates our 
increasingly complex and expensive health care system from other 
sectors of our economy that have become more user-friendly in the last 
30 years is a lack of adequate information and a lack of direct 
consumer decision making.
  I think that health savings accounts provide an incredible 
opportunity for real progress toward health care reform.
  Health savings accounts were established in the Medicare 
Modernization Act of 2003. These accounts allow Americans to save tax-
free dollars to pay for their everyday health care expenses on their 
own terms. At the same time, these accounts are coupled with high-
deductible comprehensive insurance policies to cover larger medical

[[Page 974]]

bills and also provide specific coverage for preventive care.
  This makes sense. HSAs allow individuals to save tax free for 
everyday medical expenses, while preserving insurance for major health 
care needs. With HSAs, individuals have unprecedented choice in their 
health care and are still protected from the high costs of serious 
illness. The result is predictable. Insurance becomes less expensive if 
it is used only for major medical expenses, and consumers make value-
based choices in their routine medical care.
  And, as we all know, the high cost of health insurance is the real 
problem that we face in providing health care coverage to all 
Americans. The current low-deductible plans so common in the workplace 
are increasingly costly for businesses and result in lower wages for 
workers and reduced employment. More and more small businesses are 
opting not to offer a health care insurance benefit at all. For the 
unemployed and/or the uninsured, health insurance premiums are far too 
expensive.
  Health savings accounts are proving themselves to be one important 
part of the solution to our health care crisis. Americans certainly 
think so. Since January 2004, over 3 million Americans have enrolled in 
HSAs.
  As innovative and popular as HSAs are proving to be, however, they 
are far from perfect. By improving and expanding them, health savings 
accounts could be even more effective in helping us reach our 
objectives.
  I believe we need to create more incentives for employers to offer 
these plans and for individuals to enroll in them. Incentives can be 
designed to assure adequate coverage and enrollment of those with 
chronic illnesses.
  The President has made it clear that we need to make these plans 
fairer and available to a larger number of Americans. Individuals that 
purchase HSAs on their own should have the same tax advantages as those 
with employer-sponsored insurance. To achieve this, premiums for HSA-
compatible insurance policies should be deductible from income taxes 
and an income tax credit provided to offset payroll taxes paid on 
premiums for HSA policies. All taxes on out of pocket spending through 
HSAs should be eliminated. HSA insurance policies should be portable 
between employers and across State lines. To allow for better 
individual healthcare decisions, information on price and quality of 
healthcare must be transparent and readily available. Acceleration of 
the implementation of an integrated health information technology 
system will be critical to these efforts. The President's budget 
outlines several proposals designed to improve HSAs and to make them 
more attractive to employers and employees. The employer community also 
has developed a set of proposals designed to improve HSAs. The Senate 
should give serious consideration to all good ideas to make health 
savings accounts work better.
  These are important goals.
  Health savings accounts are a good thing for our citizens, and they 
are a good thing for the economy.
  HSAs will make health insurance less expensive in the long run, which 
is the best thing we can do to tackle the problem of the uninsured in 
this country.
  They will make the health care sector of our economy more user-
friendly and more efficient.
  They will give workers more choice and more flexibility in their 
choice of plans and in deciding where they want to work.
  In short, they would help to bring our health care system into the 
new economy.
  In 1980, most people in this country had rabbit ears on their 
televisions and a choice of three channels.
  Today, we have the internet. We have cell phones. We have ATMs on 
every block.
  Yet, in some ways, our system of employer-provided health care is a 
dinosaur. It dates back to a policy decision made to assist employers 
during World War II and it is not aging well. There are too many 
Americans without employer-provided health insurance, and those with it 
are routinely frustrated with the level of customer service.
  The Bush administration estimates that under current law, the number 
of Americans with HSAs will grow to 14 million by 2010. By improving 
the program, however, we could see this number go as high as 21 
million.
  As a member of the Finance Committee, I am deeply interested in 
working with my colleagues to help improve HSAs in the coming months 
and years. The President's proposal represents a unique opportunity to 
make health care in this country more equitable, more affordable, and 
more cost-effective.
  I urge my colleagues on both sides of the aisle to join me in these 
efforts.
  I believe we would all be better off if we would do so.

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