House Ways and Means Committee Chairman Bill Thomas (R-Calif.) and Rep. William Lipinski (D-Ill.) on June 5 introduced a bill to create health savings accounts for individuals to pay for medical expenses.
The measure would amend the Internal Revenue Code of 1986 to allow individuals to deduct contributions to health savings accounts.
HSAs would be permanent and portable and allow tax-free rollover of up to $500 of unspent flexible spending account balances, which currently are forfeited at the end of each year.
"Creating HSAs to assist with the cost of medical expenses is just one way we can help uninsured families better access affordable healthcare," said Thomas in a written statement. "HSAs help put individuals in control of their own healthcare, while helping manage healthcare's rising costs."
Thomas's release said individuals spend 30% less when spending their own money for healthcare, with no adverse effects, according to the Rand Corporation.
Other elements of the health savings account proposal include:
- availability to all individuals with a qualified deductible plan
- establishment in connection with a health insurance plan providing a minimum deductible of $1,000
- allowance of annual contributions to equal 100% of the deductible
- allowance of both employer and employee contributions
- marketing by PPOs and cafeteria plans
- no cap on taxpayer participation
Traditional insurance pools, on a per capita basis, will be older and sicker and cost considerably more money, Pollack said. "The potential for damage is enormous. I think it is ill-advised to pass legislation like this."