On June 26, the House approved, 237-191, a new version of a bill (H.R. 2596) designed to establish tax-free, employer-sponsored Health Savings Accounts. The bill was then incorporated into the Medicare reform legislation (H.R. 1), which the House passed on June 27.
Sponsored by House Ways and Means Committee Chair Bill Thomas (R-CA), the Health Savings Accountability Act would allow individuals to contribute $2,000 annually to the savings accounts; families could contribute $4,000 annually. In order to be eligible for the accounts, employees would have to either participate in an employer-sponsored health plan that has a minimum deductible of $500 for an individual and $1,000 for a family or be uninsured. Both individual and employer contributions would be tax deductible, although employers would not be required to make contributions to the accounts. The bill differs from the legislation (H.R. 2351) approved by the Ways and Means Committee on June 19 (see The Source 6/20/03) because it adds $100 billion to expand eligibility to workers with higher-income levels.
Speaking in support of the bill, Rep. Jennifer Dunn (R-WA) argued that the bill would benefit stay-at-home moms and those individuals who took time off from work to care for sick relatives. “Many people, particularly women, during their child-raising years, took time away from the workplace and often did not add money into accounts like IRAs, or actually Social Security accounts, and ended up with big goose eggs when the time came to came to calculate their benefits…[this bill] allows them to add up to 25 percent in additional dollars each year to their health savings accounts.”
Rep. Sheila Jackson Lee (D-TX) felt that the benefit of creating health savings accounts did not outweigh the cost of implementing the bill. “It will cost $71 billion over the next ten years all money borrowed from our children and grandchildren. In the later years of the budget window, this bill will cost in excess of $10 billion per year, and will accelerate just at the time when the baby boom generation retires, denying resources to meet our commitments to the Social Security and Medicare systems.”
