House To Consider Three Bills To Address Increased Health Care Costs
House Republican leaders this week plan to hold debate on three bills that would help address increased health care costs to "demonstrate their concern" about the issue, CQ Today reports. The first bill (HR 4279), sponsored by Rep. Jim McCrery (R-La.), would allow employees to transfer as much as to $500 of unused funds from flexible spending accounts to new health savings accounts or roll over the funds to FSAs for the next year. Under current law, employees can place pre-tax funds into FSAs for unreimbursed health care expenses, but they lose unused funds at the end of each year. The House Rules Committee plans to consider the legislation on Tuesday. The House last year passed similar versions of the other two bills, which remain stalled in the Senate, and House Republican leaders hope to "pressure senators by reviving the measures," CQ Today reports. One of the two bills (HR 4280) would cap noneconomic damages in medical malpractice lawsuits at $250,000; the House in March 2003 voted 229-196 to approve similar legislation (HR 5). The other bill (HR 4281) would allow small businesses to join together to form association health plans; the House in June 2003 voted 262-162 to approve similar legislation (HR 660). "There is no greater threat to America's continued economic security than the current state of our health care delivery system," House Majority Leader Tom DeLay (R-Texas) said. DeLay added that "once the three bills pass the House, they will be bundled and sent to the Senate as one measure," CQ Today reports (Schuler, CQ Today, 5/7).
The Christian Science Monitor on Monday examined the "heaps of praise" that HSAs have received from taxpayers (Decker, Christian Science Monitor, 5/10). Under the new Medicare law, HSAs, which allow individuals to save funds tax-free for future medical expenses, are available to members of health plans that have a deductible higher than $1,000 for an individual and $2,000 for a family (California Healthline, 3/31). Employees, employers or both can contribute as much as a combined $2,600 for individuals and $5,150 for families for HSAs each year. In addition, employees can establish HSAs when employers do not offer them. According to the Monitor, HSAs are "far more flexible" than FSAs because they allow employees to roll over unused funds each year and use them "for any purpose" after they reach age 65. John Goodman, president of the National Center for Policy Analysis, said that HSAs provide employees with "another way to sock money away, especially when we don't know what will happen with the Social Security and Medicare systems in the future." However, opponents maintain that HSAs benefit higher-income employees and could "leave workers paying the majority of their own health costs," according to the Monitor. "HSAs will siphon off healthy employees and leave traditional plans with less healthy or older workers," Dan Adcock, assistant legislative director of the National Association of Retired Federal Employees, said, adding, "That in turn will drive up premiums and do damage to the concept of group health insurance, which charges everyone on that plan the same premiums regardless of age or health" (Christian Science Monitor, 5/10).
In related news, 45 of the largest U.S. employers on Monday will announce a plan to place their uninsured employees into a single health insurance pool and seek an "insurer willing to offer them a variety of health policies at lower prices than the workers could get individually," USA Today reports. Officials for the employers -- which include Ford Motor, Gap, Home Depot, IBM, Sears Roebuck and Textron -- estimated that the plan would include about four million employees. Although the employers have not finalized the details, the plan could take effect by early 2005, according to USA Today. "We're tired of waiting for people to figure out what to do about the uninsured," Randy MacDonald, senior vice president of human resources for IBM, said, adding, "We could not get that reform through the halls of Congress, so we are reforming the marketplace." Greg Lee, senior vice president of human resources at Sears, which has about 100,000 uninsured employees, said, "The more affordable we can make it, the fewer uninsured we will have." HR Policy Association, which developed the plan in conjunction with Hewitt Associates, said that employees who participated would have access to a number of health plans, from low-cost discount cards for medical services to comprehensive benefit packages. Aetna President Ron Williams said that the company has discussed participation in the plan with the employers, adding, "We see the uninsured as the alignment of two important interests: the opportunity to do good for society and an important business opportunity to attract new customers." However, opponents raised concerns about whether uninsured employees could afford to participate in the plan because the employers would not help cover the cost. In addition, USA Today reports that the plan could fail "if not enough workers of average health join" the pool. "The question is, who would actually participate, absent some sort of compulsion or subsidy?" Gary Claxton, a vice president at the Kaiser Family Foundation, said (Appleby, USA Today, 5/10).
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