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Republicans Pushing Hard for Medical Savings Accounts

May 8, 1996

WASHINGTON (AP) _ Cindy Blagg, wife, mother of two and bookkeeper at a Columbus, Ohio, car dealership, found herself in a new role recently: advocate for medical savings accounts.

Brought to Washington with co-worker Angie Reeves as examples of ``real working people who have and use MSAs,″ Blagg became part of an intense lobbying effort in Congress over a health insurance bill.

``I don’t understand why people have a problem with the MSA program being tax free,″ Blagg said at a news conference last week by Senate Republicans.

Republicans want to include an income tax exemption for medical savings accounts in the bipartisan insurance bill, now under negotiation in Congress. The bill would guarantee that workers who change or lose jobs keep access to health insurance.

``If we just hang in there, we can get what we want,″ said Keith Appell of Creative Response Concepts, which arranged the news conference. President Clinton needs a health care bill, Appell said, and medical savings accounts must be in the bill to stamp it with Republican free-market ideology.

``Otherwise, Clinton and (Sen. Edward) Kennedy will get all the credit,″ Appell said.

But so far, Democrats don’t seem willing to budge from their opposition to the accounts. As the bill heads to a House-Senate negotiating committee in the next few weeks, Democrats have in turn organized their own lobbying efforts.

On the day Blagg was in town, for example, Consumers Union held a news conference with Kennedy and groups opposed to medical savings accounts.

Democrats argue the accounts are for the healthy and wealthy, would increase premiums, lack consumer protections and would cost taxpayers about $1.8 billion a year.

President Clinton promised to sign the bill in its original, narrower form but opposes MSAs. Yet, predicts House Majority Leader Dick Armey, R-Texas: ``He’s too good a politician to veto the bill over medical savings accounts.″

Consumers could put into MSAs tax-deductible contributions of up to $2,000 a year for an individual or $4,000 annually for a family, and employers could contribute some or all of that. Their insurance company would provide a catastrophic health plan for big medical expenses. Money from the account would be used to pay for routine medical expenses, and unspent money would roll over into the next year.

Appell’s GOP strategy is to spotlight ``regular, middle class, not wealthy, some of them not even healthy″ people who now use similar accounts.

His firm, which also promoted the House GOP’s ``Contract With America,″ is financed by a conservative group, but Appell would not identify it.

The newly formed Coalition for Patient Choice includes many of the groups that have promoted GOP issues since Republicans took control of Congress in the 1994 election: the American Medical Association, Americans for Tax Reform, Small Business Survival Committee, Concerned Women for America and Christian Coalition.

Also pushing for the accounts is the Council for Affordable Health Insurance, which gets financial support from Golden Rule Insurance, an Indianapolis company and GOP campaign donor.

Golden Rule stands to benefit if medical savings accounts are approved because it is the premier seller of the policies, including those covering the Ohio women.

The company and its president, Patrick Rooney, began cultivating political support about five years ago with donations, mostly to Republicans, totaling a reported $1.3 million.

But, supporters stress, medical savings accounts also fit the Republican philosophy of individual responsibility.

``In Ada County (Idaho), we have introduced 163 employees ... who perhaps for the first time in their working lives care how much health care costs, who will ask their doctors, `How much?‴ said Ada County commissioner Gary Glenn.

If consumers shop around for doctors offering the lowest prices, health care costs will come down, Glenn says.

Blagg said she checked prices before selecting a doctor to treat her sons for allergies, but when she needed surgery recently she stayed with the doctor who had treated her for years.

Her policy pays medical bills after the first $2,000 and makes deposits totaling $1,000 each year in a savings account, which Blagg said she used to pay the surgery deductible.

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