A Republican MSA-Bomb
REES, MATTHEW
A Republican MSA-Bomb by Matthew Rees HOUSE SPEAKER NEWT GINGRICH is a major advocate of medical savings accounts (MSAs), because, he says, they will inject market-based cost controls into the...
...Why all the fuss about MSAs...
...Immediately after the Senate defeat, Senate majority leader Bob Dole indicated continued support for MSAs, and House and Senate sources say it's likely MSAs will be included in the final legislation...
...We'll soon see just how much capital he and Dole are willing to expend, but at the very least some progress has been made: Preemptive surrender has been dropped as a negotiating tactic...
...Senate Republican staffers were furious when Dole agreed on April 17 to bring Kennedy's health-care bill to the floor the next day...
...The squeeze on Dole has been exacerbated by the lack of deference accorded to him (it was a Republican, Kassebaum, who led the anti-MSA effort) and by his failure to employ the same hardball tactics against Democrats they're using against him...
...A Republican MSA-Bomb by Matthew Rees HOUSE SPEAKER NEWT GINGRICH is a major advocate of medical savings accounts (MSAs), because, he says, they will inject market-based cost controls into the health-care system...
...Robert Torricelli, who is running for the Senate in New Jersey, sent a letter to Clinton touting MSAs as a "wonderfully innovative idea" that will control costs and increase access...
...With Democrats better recognized for their health-care efforts than Republicans-President Clinton called for passage of the health-care legislation in his State of the Union speech-this is a reasonable fear...
...Torricelli is making them a major plank in his healthcare platform...
...Individuals would withdraw money from their accounts for out-of-pocket medical expenses, and any unused amount would roll over each year, giving the mass of health-care users an incentive to shop around for the most affordable health care and to avoid unnecessary services...
...The politicization is such that in the April 18 Senate vote, every Democrat favored keeping MSAs out of the health-care bill...
...thus credit will go not to Dole and Gingrich, but to Clinton and Kennedy...
...But on April 15 Donna Shalala, Health and Human Services secretary, characterized MSAs as "an inherently bad and risky idea" that "threatens to undermine the insurance safety net...
...It's clear, then, that MSAs will remain a political issue this year...
...Assuming Dole sheds this defensive posture and sticks to his pledge to fight for MSAs, the looming question will be whether Clinton will veto health reform because of an MSA provision...
...Pete du Pont, former governor of Delaware and a champion of MSAs, says they are "the one free-market provision that would at least mitigate some of the damage the other provisions would do...
...Andy Jacobs of Indiana told me he's "amazed" by the opposition: "It's unfortunate that emotions have taken precedence over reason...
...Even while pressing to keep his own health-care legislation free of amendments, Kennedy derailed immigration reform by offering an amendment to raise the minimum wage...
...But Gingrich is standing firm, having sent a four-page letter to the White House on April 10 strongly plugging MSAs...
...Companies or individuals could make annual tax-deductible contributions of up to $2,000...
...In late September Clinton said "the medical savings account may be something that we ought to explore and experiment with," and during the budget debate he expressed support for them...
...That was Gingrich on offense...
...the legislation would give MSAs the same tax treatment as other kinds of employer-provided health insurance...
...Conservatives were furious over Gingrich's hint at a preemptive MSA surrender...
...He's penalized if legislation languishes in the Senate, yet he risks Clinton's hogging the credit for whatever becomes law...
...Patrick Rooney, former chairman of the Golden Rule Insurance Co.-has contributed over $1 million to Republicans since Bill Clinton became president...
...He could probably get away with it, as congressional Republicans concede they would send a bill back without MSAs...
...Golden Rule is an advertiser in THE WEEKLY STANDARD...
...All of this underscores the need to include MSAs in the legislation...
...Kevorkians of health reform...
...Their supporters, who include figures as diverse as Ross Perot and Milton Friedman, believe the savings accounts would get at one engine of rising heath-care costs: third-party payments...
...MSAs were always part of the House health-care bill, but it was unclear whether they would be in the Senate bill until Dole announced on April 16 that he and William Roth, chairman of the Finance Committee, would offer an MSA amendment...
...It took on added significance after Senate Republicans failed in their April 18 attempt to insert MSAs into their health-care bill...
...He also said MSAs would be a "killer amendment" to the health bill, hardly behavior that merited reward from Dole...
...In To Renew America, he wrote that "every American ought to have the opportunity to belong to a [medical savings account] system...
...That will mollify conservatives, who aren't thrilled about passing a bill sponsored by Sens...
...Both Democrats and the press have also repeatedly stressed that the most prominent advocate of the savings accounts-J...
...William Lipinski of Illinois says he's "disappointed" Senate Democrats fought them, while Rep...
...The Clinton administration has also experienced a change of heart...
...Nancy Kassebaum and Ted Kennedy and endorsed by President Clinton...
...Jim Moran of Virginia, a Democrat, delivered a heated denunciation of Golden Rule during floor debate on the health bill, zinging the company because more than half of its revenues went to "shareholder profits" and calling the whole effort "a sham...
...But like so many issues before Congress, MSAs have become politicized...
...On April 17, Jacobs and Rep...
...Yet the campaign against MSAs does not have unanimous Democratic support...
...And conservatives fear that if Democrats somehow succeed in blocking MSAs this spring, the health-care legislation won't bear a sufficiently Republican imprimatur...
...Gingrich on defense said on March 28, as the House was on the verge of passing its health-care legislation, "If the president sends up a veto signal, maybe we would have to back down...
...His approach to Kennedy demonstrates this...
...The Senate minority leader, Tom Daschle, supported MSAs in a September 1992 letter but has since retreated, calling them "the Dr...
...But Dole is in a difficult position as presidential candidate and Senate majority leader...
...Despite Gingrich's wavering, MSAs should get another chance...
...Individuals would have the opportunity to withdraw their deposits for non-medical expenses, but a heavy tax penalty would follow...
...The announcement came after pressure from Senate conservatives, including Trent Lott and Don Nickles...
...While MSAs are already offered at over 2,000 companies nationwide, employer deposits are currently taxed...
Vol. 1 • April 1996 • No. 32
