Statement by the Galen Institute on Health Savings Accounts

Ways and Means Committee Chairman Bill Thomas (R-CA) should be congratulated for introducing legislation allowing the creation of “Health Savings Accounts.”

Health Savings Accounts (HSAs) are unified health accounts that would combine the best aspects of Medical Savings Accounts (MSAs), Health Reimbursement Arrangements (HRAs), and Flexible Spending Accounts (FSAs) to create one tax-advantaged account that can be used for health care expenses when coupled with qualified health insurance.

The new legislation (H.R. 2351) solves a number of problems in all three consumer-driven health vehicles while making them available to everyone.

The bill allows all individuals with qualifying insurance coverage to set up an HSA. It lowers the allowable deductible to $1,000 for an individual and $2,000 for a family and allows first dollar coverage for preventive services. It allows account holders to fully fund the deductible each year, and roll-over unspent funds for future needs.

It also allows up to $500 in unspent FSA money to roll-over into an HSA or a qualified retirement fund, eliminating the “use it or lose it” provision that has plagued FSAs.

Employers everywhere are investigating “consumer driven” approaches to health care financing.

By promoting Health Savings Accounts, Mr. Thomas continues the momentum the IRS started a year ago with its Health Reimbursement Arrangement ruling and gives workers and employees another weapon in the struggle to control health care costs and put power back in the hands of consumers.

Americans are well-served with the kind of leadership Mr. Thomas has shown on this critical issue.

For more information contact:
Greg Scandlen
703-299-9206
gmscan@aol.com

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Ways and Means Committee Chairman Bill Thomas (R-CA) should be congratulated for introducing legislation allowing the creation of “Health Savings Accounts.”

Health Savings Accounts (HSAs) are unified health accounts that would combine the best aspects of Medical Savings Accounts (MSAs), Health Reimbursement Arrangements (HRAs), and Flexible Spending Accounts (FSAs) to create one tax-advantaged account that can be used for health care expenses when coupled with qualified health insurance.

The new legislation (H.R. 2351) solves a number of problems in all three consumer-driven health vehicles while making them available to everyone.

The bill allows all individuals with qualifying insurance coverage to set up an HSA. It lowers the allowable deductible to $1,000 for an individual and $2,000 for a family and allows first dollar coverage for preventive services. It allows account holders to fully fund the deductible each year, and roll-over unspent funds for future needs.

It also allows up to $500 in unspent FSA money to roll-over into an HSA or a qualified retirement fund, eliminating the “use it or lose it” provision that has plagued FSAs.

Employers everywhere are investigating “consumer driven” approaches to health care financing.

By promoting Health Savings Accounts, Mr. Thomas continues the momentum the IRS started a year ago with its Health Reimbursement Arrangement ruling and gives workers and employees another weapon in the struggle to control health care costs and put power back in the hands of consumers.

Americans are well-served with the kind of leadership Mr. Thomas has shown on this critical issue.

For more information contact:
Greg Scandlen
703-299-9206
gmscan@aol.com

SHARE THIS ARTICLE

About the author