E 1160 CONGRESSIONAL RECORD — Extensions of Remarks June 6, 1995

and the nonprofit sector, dedicated to increasing private investment in low-income communities, both rural and urban. To achieve this

mission, they lead by example, recognizing

successful and innovative partnerships between financial services institutions and neighborhood nonprofit organizations that are working together to reclaim vulnerable neighborhoods. As a result of the Outstanding Community Investment Awards, DeSales Community

Housing and Equality Savings were chosen

out of 160 applicants as a model partnership.

DeSales and Equality are being recognized

for the creation of the DeSales Mutual Housing Association. This kind of development represents the first step toward home ownership

for life-long renters. Mutual housing associations encourage community-based ownership

of affordable rental properties. Neighborhood

residents and project tenants actively participate in ownership and management decisions

of their buildings, including site selection, design, construction, and organizational structure.

DeSales began working with residents on

the mutual housing association model in the

early 1990’s. Today, thanks to the dedication

of 30 neighborhood residents, the Iowa Avenue Townhouses and the California Townhouses have taken the place of nine vacant

buildings in south St. Louis as models of affordable, resident-controlled housing.

Equality Savings and Loan Association assumed a critical leadership role in making this

project happen. The small thrift took charge of

convincing the financial community, businesses, foundations, and the major’s office of

the credibility of the project. Equality also

helped enlist additional investors to provide

permanent financing and, equally important,

they convinced St. Louis residents and others

that this innovative approach could work.

Thanks to the first mutual housing association model ever enacted in Missouri, neighborhood residents are taking on leadership responsibilities in their community. Small-scale

rehabilitation is happening elsewhere, and the

community’s church and elementary school

are crediting the townhomes for stabilizing

their surroundings.

I applaud DeSales Community Housing Corporation and Equality Savings and Loan Association as a replicable example of a public private partnership that empowers residents to

reclaim their neighborhoods.

MEDICAL SAVINGS ACCOUNTS—

DISABLED COMMUNITY EXfPLAINS WHY THEY ARE A PROFOUNDLY BAD IDEA

HON. FORTNEY PETE STARK OF CALIFORNIA

IN THE HOUSE OF REPRESENTATIVES

Tuesday, June 6, 1995

Mr. STARK. Mr. Speaker, medical savings

accounts are a brilliant scheme to skim the

healthiest people out of the insurance pool—

and leave the rest of us to face sky-rocketing

insurance rates. MSA’s are a bad idea that

has spread like wildfire.

Following is a portion of the testimony of the

Consortium for Citizens With Disabilities before the Ways and Means Subcommittee on

Health on May 25. I hope the CCD’s insights

will help stop this lemming-like pursuit of MSA

legislation.

MEDICAL SAVINGS ACCOUNTS

Many Members of Congress believe that

Medical Savings Accounts (MSAs) have the

potential to reduce health care costs and increase the number of Americans with insurance. There have been suggestions that

MSAs be implemented not only in the private sector but in the Medicare program as

well.

The Consortium for Citizens with Disabilities Health Task Force has major concerns

with the emphasis presently being placed on

Medical Savings Accounts as a solution to

our health system’s problems of access and

affordability. The use of MSAs is not only

untested, but also has the very strong potential for making comprehensive health insurance less affordable for persons with disabilities and serious chronic illnesses. Because of

our many concerns, which are discussed

below, and in the absence of other reforms,

the CCD Health Task Force does not support

the establishment of MSAs as either an incremental reform or as a solution to the

health care problems facing millions of uninsured and underinsured individuals in the

U.S.

Supporters of MSAs state that:

MSAs will allow the marketplace, not the

government to address the cost and access

issue. By giving responsibility for paying for

health care to consumers, it is assumed that

MSAs will reduce unnecessary health care

expenditures because individuals who are

spending their own money will be more prudent purchasers. It is also assumed that the

lower cost of catastrophic health insurance

will lead more employers to offer the health

insurance.

MSAs will lead to lower administrative

costs because insurance companies will only

be involved with claims higher than the deductible amount.

However, MSAs are untested, and it is not

clear that they will either lower costs or improve access to services.

What are MSAs and How do they Work?

Medical Savings Accounts are tax-exempt

savings accounts modeled on Individual Retirement Accounts that employed individuals can use to pay for health-related expenditures. State MSA laws generally create

incentives for people to set up these accounts by exempting from state taxes the

money contributed to these accounts. MSAs

work like this:

Employers can purchase a standard health

insurance plan with a low deductible ($250–

$500 annually per person) or a catastrophic

health insurance plan with a high deductible

($3000–$5000 annually per person). Because

most people will not have health care costs

higher than several thousand dollars, the

premiums for high deductible catastrophic

health insurance plans are much lower than

for plans with low deductibles.

An employer sets up a MSA for employees

who want to participate in this type of plan

and deposits, in pre-tax dollars, an amount

equal to the difference between the cost of a

standard low deductible plan and a catastrophic high deductible plan. The self-employed can also set up a MSA.

Employees can use the money in their individual account for health care expenses.

When the high deductible is met, the insurance company then pays the bills. If money

is left in the account at the end of the year,

it can be withdrawn and used for other purposes or carried over with accrued interest

into the next year.

The CCD has several major concerns about

MSAs:

The catastrophic health plans that are purchased in conjunction with MSAs can impose

pre-existing condition limitations and can

refuse to cover persons with certain health

conditions or disabilities.

Catastrophic health plans with high

deductibles often do not provide the comprehensive coverage needed by persons with

serious illnesses or conditions. Some of these

plans have lifetime or per condition limits of

only $100,000.

The American Academy of Actuaries has

estimated that persons with high health expenses will experience major increases in

out-of-pocket costs with MSAs. MSAs may

also increase out-of-pocket costs if the

amount employers contribute to the MSA is

not sufficient to cover the annual catastrophic deductible. Additionally, the combined cost to the employer of an MSA contribution and the catastrophic health plan

premium may not be less than the cost of a

standard health plan.

If large numbers of individuals choose

MSAs plus catastrophic health plans, the

health insurance market will be further segmented, reducing the size of the population

pool needed to spread risk adequately.

MSA will likely lead to adverse selection

because they will be utilized primarily by

younger, healthier people who do not anticipate a need for health care. Persons who anticipate health care expenditures, those who

need comprehensive coverage, and those who

are older and at higher risk for needing

health care are likely to remain in standard

low deductible health insurance plans. Individuals with MSAs could also change to a

low-deductible plan when they become sick

or anticipate medical bills (e.g., childbirth

expenses), thus exacerbating the problem of

adverse selection.

Adverse selection will lead to higher premiums for persons in standard, low deductible health insurance plans. It has been estimated that if MSAs are widely adopted, the

cost of a standard, low deductible health insurance policy would rise by as much as 26%.

Increases of this magnitude will make comprehensive, low deductible insurance

unaffordable both for employers and individuals who want to purchase these policies.

There is no evidence that MSAs will make

consumers more cost conscious when they

are seriously ill. Physicians—not consumers—determine what treatment is needed. If

surgery is recommended, consumers don’t

look for the cheapest surgeon, they look for

the best surgeon.

Some individuals may forgo preventive and

early intervention services if they are allowed to use money left in their MSAs at the

end of the year for personal expenses other

than health care. This concern also raises

the question of whether it is appropriate to

allow pre-tax dollars to be used for nonhealth expenses.

It is likely that catastrophic health plans

will restrict the type of health care expenditures that will count towards the deductible.

For example, if an individual spends $3000 on

mental health services, there is no guarantee

that all of these expenses will be counted towards the deductible, particularly if the insurance has limited coverage for these services.

A majority of Americans are enrolled in

some form of managed health care plan. It is

unclear whether MSAs can be coordinated

with these plans. Those opposed to managed

care view MSAs as a means to maintain the

market for indemnity insurance and fee-forservice health care delivery.

Experience with MSAs is very limited. It is

not clear whether they will result in savings.

Some analysts predict that any potential

system cost savings will be eliminated by

the additional costs required to administer

MSAs.

Most importantly, the CCD Health Task

Force believes that allowing employers and

the self-employed the option of establishing

tax deductible MSAs in conjunction with
June 6, 1995 CONGRESSIONAL RECORD — Extensions of Remarks E 1161

high deductible catastrophic insurance coverage is not the solution to our nation’s

health system problems because:

MSAs do not address the need for insurance by millions of working Americans

whose employers will not contribute to the

cost of health insurance; and

MSAs do not address the need for insurance by millions of low-income individuals

who are self-employed or unemployed and

who cannot afford to buy health insurance.

THE ADVANCED MEDICAL DEVICE

ASSURANCE ACT OF 1995

f

HON. WILLIAM M. THOMAS OF CALIFORNIA

IN THE HOUSE OF REPRESENTATIVES

Tuesday, June 6, 1995

Mr. THOMAS. Mr. Speaker, I am pleased

today to introduce the Advanced Medical Device Assurance Act of 1995 in order to clarify

the scope of coverage and amount of payment

under the Medicare Program of items and

services associated with the use of certain

medical devices approved for investigational

use.

Questions have been raised as to whether

Medicare should reimburse for hospital and

physician services when procedures involving

a medical device approved for use by the Federal Drug Administration [FDA] under the Investigational Drug Device [IDE] is used. Our

Nation’s leading clinical researchers and doctors, and the patients who depend on these

improved medical technologies are losing because of this confusion. Additionally, the use

of these advanced devices is dramatically declining around the country. Many of the medical technology companies are moving all of

their research out of the United States to Europe, Canada, and Japan where payment policy is not an issue.

These advanced medical devices reduce

length of surgical procedure, hospitalization,

patient mortality, and the need for repeat procedures. All of these patients, whether they

get an advanced device or not, would be in

the hospital anyway receiving medically indicated care. Clarifying the policy to provide

coverage for newer devices would not increase costs because the DRG pays a set

rate for set therapies regardless of whether

there is a clinical trial involved.

The American Academy of Orthopedic Surgeons, American College of Cardiology, American Hospital Association, American Medical

Association, Association of American Medical

Colleges, Association of Professors of Medicine, California Health Institute, Catholic

Health Association, Cleveland Clinic, Coalition

of Boston Teaching Hospitals, Federation of

American Health Systems, Greater New York

Hospital Association, Health Industry Manufacturers Association, Mayo Clinic, North American Society of Pacing and Electrophysiology,

and the Society of Thoracic Surgeons all believe we need to clarify this policy. These are

all well-respected health care organizations

and I believe this bill brings about the clarity

that is needed.

I strongly encourage my colleagues to cosponsor this important, cost-neutral legislation

and to work for its prompt enactment so that

Medicare beneficiaries will have access to

safe and high-quality medical care.

STATEMENT IN RECOGNITION OF

2D LT. REBECCA E. MARIER

HON. SUE W. KELLY OF NEW YORK

IN THE HOUSE OF REPRESENTATIVES

Tuesday, June 6, 1995

Mrs. KELLY. Mr. Speaker I rise to acknowledge and salute the outstanding achievements

of 2d Lt. Rebecca E. Marier. This impressive

young woman recently graduated from the

U.S. Military Academy in West Point, NY at

the top of her class—top of her class academically, physically, and militarily.

Second Lieutenant Marier opted to forgo an

education at prestigious Harvard University, in

order to pursue her dream of a degree from

an institution which has a proud tradition of

molding our Nation’s leaders. Marier is unquestionably a role model for all of our Nation’s young people, men and women alike.

Mr. Speaker, I ask that you and all my colleagues join me in not only commending Second Lieutenant Marier’s achievements, but

more importantly her spirit of selfless dedication to the service of our country. I would also

ask, Mr. Speaker, that the New York Time’s

article which appeared this past Sunday, noting Second Lieutenant Marier’s achievements,

be inserted at this point in the CONGRESSIONAL

RECORD.

[From the New York Times, June 4, 1995]

WOMAN IS NO. 1 IN WEST POINT CLASS

WEST POINT, NY—For the first time in the

United States Military Academy’s 193-year

old history, a woman took the No. 1 class

rank as the Academy graduated 988 new

members of the Army officer corps today.

The woman, Second Lieut. Rebecca E.

Marier, 21, of New Orleans, was the head of

her class in the school’s three programs—

military, academic and physical.

‘‘It was the greatest feeling in the world,

throwing up that white hat,’’ Lieutenant

Marier said after the ceremony. ‘‘I’m just

glad to be part of the progress women are

making all over the country.’’

Four years ago, she startled her family and

friends by choosing the Academy over Harvard University for her undergraduate work

because she wanted the ‘‘all-around challenge’’ and leadership training West Point

offered.

But she plans to get to Harvard, after all,

becoming the second cadet in West Point history to go on to medical school there, said

Andrea Hamburger, an Academy spokeswoman.

Women began attending West Point in 1976,

and with today’s class, more than 1,400

women will have been commissioned second

lieutenants.

At the ceremonies, the Army Chief of

Staff, Gen. Gordon Sullivan, addressed graduates, telling them that in an age of changing circumstances, there was no way to predict where they might serve.

General Sullivan omitted remarks about a

possible United States role in Bosnia, which

had appeared in an advance version of his address received by reporters.

In the prepared text, General Sullivan reviewed the American role as a member of

NATO and said the United States was ‘‘prepared to act with NATO should the need

arise.’’

Pressed afterward for an explanation of the

omission in his speech, he replied: ‘‘I felt I

had made the point of the uncertainty of the

world. I didn’t think I needed to go into the

details.’’

General Sullivan’s advance text read:

‘‘In response to the appalling Bosnian Serb

behavior over the past week, we have been

meeting with our NATO allies to consider

the next steps to keep the U.N. protection

force in place, because it remains our best

insurance against an even worse humanitarian disaster there.

‘‘Although our policy remains that we will

not become combatants in the conflict, we

are prepared to act with NATO should the

need arise.’’

ACDA IS ESSENTIAL FOR OUR

NATIONAL SECURITY

f

HON. JAMES P. MORAN OF VIRGINIA

IN THE HOUSE OF REPRESENTATIVES

Tuesday, June 6, 1995

Mr. MORAN. Mr. Speaker, I rise to express

my support for the Arms Control and Disarmament Agency as an independent agency

and to urge that we consider how important

arms control continues to be for our national

security. This is also the conclusion of a recent editorial from the News & Observer, from

Raleigh, NC. H.R. 1561 would abolish this

small federal agency which has proven itself

to be an economic bargain. Not only does the

operation of the agency come with a modest

price tag of under $50 million, its efforts have

saved the Government millions, if not billions,

of dollars in defense outlays over its 30-plus

years of existence.

I urge a ‘‘no’’ vote on final passage of H.R.

1561. We should not merge ACDA and the

other separate foreign service agencies with

separate missions into the State Department.

The U.S. ACDA is pursuing the biggest and

broadest arms control and nonproliferation

agenda in history. As the following article

makes clear, now is not the time to be dismantling the agency that is charged with getting these agreements negotiated, implemented and verified.

[From the News & Observer, May 30, 1995]

FOREIGN POLICY MEDDLING

A proposal to reorganize foreign affairs

agencies has consequences beyond mere

streamlining. Some in Congress would like

excessive control over foreign policy, a bad

idea in today’s unstable world.

Overhauling the nation’s foreign policy

agencies, as proposed by Senator Helms,

seems on first glance to make sense. Separate organizations tend to be inefficient, and

as long as the rest of government is being

‘‘reinvested,’’ foreign affairs shouldn’t be exempt.

But a closer look unveils flaws in the proposal, which is advanced in pending legislation in both the Senate and the House.

For one thing, the assorted foreign services

agencies don’t all have the same mission;

merging them into the State Department

risks diluting their influence in the sea of a

single mighty bureaucracy. In a recent visit

to The N&O, John Holum, director of the

Arms Control and Disarmament Agency,

made a strong argument along this line for

preserving his office as a separate expert

voice.

As Holum pointed out, the agency’s advocacy of arms control and nonproliferation is

crucial in the face of new threats from the

spread of weapons. His worry, and it comes

across as legitimate, is that the arms-control quest could become secondary to the

State Department’s concerns for smooth diplomacy and maintaining good relations

with other countries.