The accounts allow workers to make tax-free contributions to a personal savings account typically linked to a private health plan carrying a high initial deductible. The savings in the account are used to pay medical bills up to the deductible amount, with the plan then kicking in for further coverage. Archer is proposing to make the program permanent, repeal the cap on the number of accounts, lower eligibility limits and allow all employers to offer them. Democrats generally oppose the idea, arguing the accounts would lure healthy, younger workers out of conventional health insurance plans, causing a sharp rise in premiums for the older, less-healthy workers who remain. So far, interest in the accounts has been muted, with the IRS reporting just under 55,000 had been opened by the end of 1999.
Proponents say that is largely due to restrictive conditions placed on the initial pilot program.
The effort to expand medical savings accounts already is attached to controversial patients' bill of rights legislation currently stalled in Congress, but Archer said Republicans also would be looking for other vehicles to advance the plan.