Proposed HSA Expansion Unlikely in 2006
Senate Finance Committee Chair Chuck Grassley (R-Iowa) on Wednesday said that he will not support a proposal by President Bush to expand tax-free health savings accounts this year, USA Today reports (Stone, USA Today, 3/9). According to Grassley, the committee likely will not address the proposal this year because of inadequate support to ensure passage in the Senate (Reichard, CQ HealthBeat, 3/8).
Grassley also raised concerns about the benefits of the proposal. He said that Republicans and Democrats have cited problems in the health care system and said that "the answer is more tax subsidies."
However, Grassley said, "Instead of charging down that path, ... we need to take a step back. We want to believe that if we just spend more money or provide more tax subsidies, our problems will magically disappear." He said that health care tax incentives cost the federal government $177.6 billion last year, adding that such incentives will cost $2 trillion over 10 years.
"Too often here in Washington, people try to solve problems by throwing money at them. Before we add more tax subsidies, we first should look to see if we can make the incentives we have today work better," Grassley said (Dalrymple, AP/Houston Chronicle, 3/8).
Sen. Max Baucus (D-Mont.), ranking member of the committee, raised concerns that HSAs would attract younger and healthier individuals and make traditional health insurance unaffordable for older and sicker individuals.
Grassley said, "I think HSAs are so new that it's reasonable that Sen. Baucus has the concerns he might have and he may be right. I hope he's not right because I think they're a good answer. But it's going to take a while to show who is right."
Grassley also cited the importance of bipartisan efforts to address the issues of health care costs and the uninsured with tax incentives (CQ HealthBeat, 3/8).