Sens. Chuck Grassley and Robert Torricelli today announced plans tointroduce a bill that greatly would expand Americans' access to medical savings accounts.
"Americans may feel they're losing control over their health care," Grassley said. "Theirchoices of what services are covered and which doctors they can see are increasingly limited. Medical savings accounts build more options into health care. They put patients instead of healthcare plans in control."
"By expanding MSAs, this legislation will give policyholders direct control over medicalexpenditures, offer them a new freedom to select the physician or specialist of their choice, and makeinsurance affordable for millions of Americans," said Torricelli.
Grassley and Torricelli said they plan to introduce The Medical Savings AccountImprovement Act of 1999 at their earliest opportunity after the congressional recess. The bill wouldmake it possible for any individual to set up a medical savings account, the senators said. It wouldauthorize a tremendous expansion of medical savings accounts over current law.
The Health Insurance Portability and Accountability Act of 1996 created a limited pilotproject for medical savings accounts. The pilot project authorization is set to expire next year.
Grassley and Torricelli said the Medical Savings Account Improvement Act of 1999 would:
- repeal the limitations on the number of medical savings accounts that can beestablished;
- stipulate that the availability of these accounts is not limited to employees of smallemployers and self-employed individuals;
- increase the amount of the deduction allowed for contributions to medical savingsaccounts to 100 percent of the deduction;
- permit both employees and employers to contribute to medical savings accounts;
- reduce the permitted deductibles under high deductible plans from $1,500 to $1,000for individuals and from $3,000 to $2,000 for couples;
- and would permit medical savings accounts to be offered under cafeteria plans, orcompany-sponsored plans that offer employees a choice of benefits.
Grassley and Torricelli said the widespread use of medical savings accounts would haveseveral benefits:
- Lower health care costs. Administrative costs should be lower. Consumers withmedical savings accounts likely would use health care services in a discriminatingmanner. Consumers with the accounts would be selective in choosing providers. This should cause those providers to lower their prices to attract medical savingsaccount holders as patients.
- Complete choice of provider, an option many Americans do not have.
- Portable health care coverage. Medical savings accounts are completely portable.They are the property of the individual even with a job change.
- A national increase in health care coverage. A substantial number of the morethan 40 million Americans who lack health insurance are uninsured because they arebetween jobs. The individual ownership of these accounts would provide money forhealth expenses during periods of unemployment.
- A promotion of personal savings. Since pre-tax monies are deposited in medicalsavings accounts, there should be a strong tax incentive to use them.
"Medical savings accounts work," Grassley said. "All Americans should have this optionfor their health care expenses. I hope the Senate will give this bill full consideration at the firstopportunity."
