IN THIS ISSUE:
? Medicare Reform Heating Up
? Thomas Proposes Expanding MSAs, Combining Them with FSAs
? Connecticut to Get MSAs – Finally
? Unions Resist MSAs in Wisconsin
? Daily Oklahoman Says Expand MSAs, Roll-Back Regulations
? MSAs Better Than Universal Health Care in Maryland
? Nevada Medicaid Would Benefit From MSAs
? President Should Use “Bully Pulpit” to Expand MSAs
Medicare Reform Heating Up
The Hill briefing Galen sponsored with AEI and Heritage on Medicare reform last week was a huge success with some 150 Congressional staff, media, and Washington association people showing up. I’ve done a lot of these briefings over the years, and it is rare to attract even half that many people. Of course, the timing couldn’t have been better with a “bipartisan” plan being announced in the Senate Finance Committee about the same time. These Medicare issues are well-covered in Galen’s other weekly publication, Health Policy Matters, so I’m not going into it here, save to mention there is a growing likelihood that Congress will take some dramatic action on Medicare this year. To stay on top of what is being proposed, please subscribe to Health Policy Matters by sending an email to firstname.lastname@example.org and check Galen’s website regularly at http://www.galen.org
Thomas Proposes Expanding MSAs, Combining Them with FSAs
House Ways & Means Committee Chairman Bill Thomas (R-CA) has introduced what will likely be the definitive MSA expansion bill this year, HR 2351. The bill makes most of the long overdo corrections to existing MSA law. It is permanent. There is no enrollment cap or employer-size limit. In fact, it appears that any individual with a qualifying insurance plan may set up his own “Health Savings Account (HSA),” with or without employer involvement. The bill lowers the allowable deductible to $1,000 for individuals and $2,000 for families, and allows annual contributions of 100% of the deductible. It allows first dollar coverage for preventive care. And, importantly, it allows up to $500 of unused cafeteria plan or FSA money to be rolled into either an HSA or a qualified retirement plan. Employers and employees may both contribute to the HSA, as long as the total contribution doesn’t exceed the annual maximum. Employer contributions are excluded from income and employee contributions are deductible. The bill falls a bit short of perfection because the maximum allowable deduction is only $2,500 for individuals and $4,500 for families. But additional cost-sharing incurred due to the use of out-of-network providers does not count against the maximums.
SOURCE: Dozens of groups have issued press releases supporting the bill, but to see the real thing, go to:
http://thomas.loc.gov and search for HR 2351.
Connecticut to Get MSAs — Finally
MSAs are getting a lot more attention these days. After six years of trying, the Connecticut Legislature has finally passed a bill that waives that state’s maximum $50 deductible for home health services. That mandate prevented MSAs from being sold in Connecticut. An article in “The Hartford Courant” by Diane Levick quotes John Parker, an independent agent, as saying “sole proprietors have been priced out of the market” in Connecticut. Golden Rule’s Mike Hampton says his company would sell a $2,500 deductible to a 50-year old smoking couple for $354/mo, while a $500 deductible plan would cost $712/mo for the same couple.
SOURCE: The article ran on May 24, 2003, but I have not been able to locate it on the “Courant’s” web site, http://www.ctnow.com. Good luck.
Unions Resist MSAs in Wisconsin
In Menomonee Falls, Wisconsin, village President Jefferson Davis wants to offer MSAs to the area’s teachers and municipal workers, according to Mike Johnson in the “Milwaukee Journal Sentinel.” He thinks MSAs could cut premium costs by 60%. The article says local Congressman Jim Sensenbrenner has introduced a bill (HR 498) to make MSAs available to public employees, bypassing the employer size restriction on Archer MSAs. But even if the bill were enacted, the unions for these workers are hostile to the idea. AFSCME representative Jack Bernfeld says, “(MSAs) shifts cost of health care to the backs of employees. It’s tantamount to a wage cut (and) a significant erosion of benefits.” Teachers’ union rep. Stan Johnson agrees, calling the idea an attack on employees and a “gimmick that works against working people.” Mr. Johnson would prefer to pressure doctors, hospitals and drug makers into lowering prices, says the article.
Daily Oklahoman Says Expand MSAs, Roll-Back Regulations
An editorial in the “Daily Oklahoman” says “(MSAs) make the government-knows-all freaks nervous.” It suggests “eliminating some of the tax incentives handed out to spur employer-sponsored insurance,” and putting the funds into interest-bearing accounts to let individuals “buy their own health insurance.” It also calls for “roll(ing) back restrictive state regulations, including those that preclude an Internet market for health insurance.”
SOURCE: http://archives.oklahoman.com/ The editorial ran on May 29, 2003. There is a fee for accessing it.
MSAs Better Than Universal Health Care in Maryland
Writing in the “Annapolis (MD) Capital,” local Chamber of Commerce president Bob Burdon agrees that “the current paradigm for providing health care coverage for Maryland citizens is flawed,” but he argues that current proposals for universal health coverage will only worsen the situation. He says, “insurance ? is meant to provide protection against unexpected and/or catastrophic losses.” UHI proposals are unable to predict future costs, so estimates of the impact are “grossly” understated. They ignore problems such as people moving into the state to take advantage of subsidized coverage or insured residents dropping existing coverage to get the subsidy. He adds, “The Health Care For All proposal (also) runs directly contrary to consumer choice.” As an alternative, Mr. Burdon suggests “a program with two separate tiers of payment that will cover health care needs.” One tier would be a catastrophic insurance plan, and the other would be a medical savings account to cover “health maintenance and routine medical procedures.”
SOURCE: http://www.capitalonline.com/ The article ran on June 1, 2003. There is a fee for accessing it.
Nevada Medicaid Would Benefit From MSAs
The “Las Vegas Review-Journal” thinks MSAs would be a good idea for Medicaid. In an editorial it points out that increasing numbers of physicians, especially pediatricians, are no longer accepting Medicaid patients. The state has cut reimbursement rates by almost two-thirds, the article says, giving as an example pediatric surgery for a ruptured appendix. Medicaid used to pay $1,200 for this procedure but has cut payment to $440. Spread over the entire course of treatment, that amounts to $44 an hour, when malpractice insurance alone costs $35/hour for one surgeon. The editorial concludes, “Medicaid must be reformed root and branch, first by tightening eligibility requirements. The federal government must also make carrying private health insurance more affordable for individuals and small business owners. Medical Savings Accounts would be a major help here.”
SOURCE: http://www.reviewjournal.com/lvrj_home/2003/Jun-02-Mon-2003/opinion/21433904.html By the way, this paper has one of the friendliest search functions in the country. Bravo to them!
President Should Use “Bully Pulpit” to Expand MSAs
Writing in a number of local Business Journals, Karen Kerrigan, the president of the Small Business Survival Committee, reports on a recently released paper by the National Women’s Business Council. The paper describes the plight of a number of small business owners as they try to maintain health coverage for their employees. Ms. Kerrigan says she met recently with President Bush who is acutely aware of these problems and has proposed a number of solutions, including Association Health Plans and expanded MSAs. She says he called these ideas “no-brainers” and says she hopes “he will use the bully pulpit to advance these reforms.”
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