March 4, 2004
Laura Clay Trueman
(202) 626-8573

Consumer-Directed Health Care
Would Receive Another Boost from Congress

Washington D.C. … Today, legislation to encourage the purchase of Health Savings Accounts and other high deductible plans is being introduced by Representatives Phil Crane (R-IL), Sam Johnson (R-TX), Eric Cantor (R-VA), and Jim Ramstad (R-MN). The Coalition for Affordable Health Coverage (CAHC) supports this effort and applauds members for championing an idea first proposed by President Bush in his FY2005 budget proposals. This bill would complement the creation of the new Health Savings Accounts (HSAs) by making the premiums paid for high deductible plans like HSAs tax deductible. Currently, only payments made by individuals and employers to the HSA account are deductible, premium payments are not.

“This bill will add more fuel to the firestorm of positive reforms taking place in the health care market,” says Laura Trueman, Executive Director of the CAHC. “Consumers are already responding to the availability of the newly created Health Savings Accounts with enormous interest. For some individuals and small businesses, HSAs are the difference between having health coverage or not.” Higher deductible plans cost less, yet still provide the peace of mind of having major medical protection. Best of all, individuals and employers can put tax deductible money into an account that follows the individual, regardless of job changes.”

Several CAHC members, including UnitedHealth Group, Aetna, and Assurant (formerly Fortis) Health, are already marketing HSAs. Assurant began selling the new high deductible HSAs on January 1 of this year. “In just two months, ” says Kerry Smith, Director of Government Affairs for Assurant Health, “this product already accounts for 30% of all our new business applications. This kind of interest is unprecedented.”

The people who most often need help affording health insurance are individuals without access to group coverage through their employer and small businesses who cannot afford skyrocketing premiums for their employees. This legislation would level the playing field for individuals, giving them the same tax treatment for premium payments that employers have, making it more affordable. “This is a first step.” says Trueman, “Many of our members want more equitable tax treatment for all insurance premiums and we support the creation of refundable and advanceable tax credits to help people purchase health insurance.”

CAHC advocates tax credits and other market-based approaches to increase the number of Americans who have health care coverage. CAHC members include AAHP-HIAA, AdvaMed, Aetna, American College of Cardiology, American Campaign for Consumer Choice and Lower Health Costs, American Legislative Exchange Council, American Osteopathic Association, Assurant Health, Bayer, FMC Corporation, GlaxoSmithKline, Healthcare Leadership Council, National Association of Health Underwriters, National Association of Manufacturers, National Association for the Self-Employed, UnitedHealth Group, U.S. Chamber of Commerce, Women Impacting Public Policy, Wyeth-Ayerst Parmaceuticals.