Newspaper article THE JOURNAL RECORD

Archer Proposes Tax-Deductible Medical Accounts

Newspaper article THE JOURNAL RECORD

Archer Proposes Tax-Deductible Medical Accounts

Article excerpt

Associated Press

WASHINGTON _ Americans with catastrophic-only health insurance coverage could save, tax free, to pay routine medical bills under a proposal unveiled Tuesday by the House Ways and Means Committee chairman.

Medical savings accounts could help slow the rising cost of health care "by giving patients total control over where and when they spend their own money," said Rep. Bill Archer, R-Texas.

Archer and Rep. Andrew Jacobs, D-Ind., signed up 50 co-sponsors for their Family Medical Savings and Investment Act, which would give people a way to save tax free for medical bills the way they now can set aside money for retirement.

The proposal advances an idea that has been a cornerstone of Republican health care reform ideas and is avidly backed by the American Medical Association and some business groups.

But skeptics, including Clinton administration officials, fear medical savings accounts will divert money from health insurance pools that otherwise would be available to cover the costs of the seriously ill.

The Archer-Jacobs plan would allow people to deduct up to $2,500 a year in medical savings for an individual or $5,000 for a family _ if their health plan included deductibles that large.

To qualify for the tax break, the health plan deductible would have to be at least $1,800 for an individual or $3,600 for a family.

Most Americans now pay deductibles of just a few hundred dollars a year.

Some employees are already able to spend tax-free dollars to pay for health insurance premiums through their jobs. They are not required to have high-deductible plans, but the tax-free money cannot be used to pay for out-of-pocket expenses not covered by the insurance.

Advocates of medical savings accounts argue that Americans' insulation from paying routine bills encourages unnecessary care and fuels inflation.

Those with medical savings accounts, Archer said, "can spend their money wisely, shopping for the best deal in the medical marketplace and driving down costs. …

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