After years of debate and political maneuvering, Congress approved the most significant reform of the Medicare system we have seen in decades in the Medicare Act of 2003. While much of this debate has focused on the inclusion of prescription drug coverage, there is another provision that may hold even greater promise for affordable health care in the United States: Health Savings Accounts.
These accounts have tremendous potential to give Utahns greater control over their own health care and add innovation-producing and cost-reducing competition to the health insurance marketplace. In return for purchasing health insurance policies with higher deductibles at least $1,000 for individuals and $2,000 for families and lower premiums, Health Savings Accounts will allow individuals and employers to set dollars aside on a pre-tax basis for routine and minor health care expenses. This allows patients to be fully covered by insurance for costly injuries or illnesses, while choosing to cover routine costs out of pocket in order to take advantage of significantly lower premiums. Consumers and employers can put up to $2,600 a year for an individual and $5,150 a year for a family into these accounts on a pre-tax basis. The money accumulates year after year tax free, and can be withdrawn tax free to pay not only for routine medical expenses normally covered by insurance, such as doctor visits and laboratory tests, but for other medical expenses as well, such as cosmetic surgery, dental care and eyeglasses.
For most Americans, the combination of lower insurance premiums and tax-advantaged savings represents a real opportunity to enjoy significantly lower health care costs, particularly over the long term. Further, the money put aside in a Health Savings Account can, if necessary, be used for other purposes as well; however, taxes would then be owed. Although I have serious concerns about the total cost of the entire Medicare reform bill, I believe, with the inclusion of Health Savings Accounts, it is a step in the right direction. HSAs are a great option for those who would otherwise be without any insurance. Surveys have shown that more previously uninsured Americans are enrolled in HSAs than in traditional health plans.
I am happy to see that so many Americans are taking advantage of the benefits of HSAs with enrollment tripling since March 2005. Making certain that Utahns have affordable health care is extremely important and HSAs are an important option for employers and employees to work together to guaranteeing health coverage.
