Physicians want HSA access for Medicare recipients
■ The AMA policy supports fine-tuning of the tax-advantaged accounts.
By Katherine Vogt — Posted July 5, 2004
Chicago -- The AMA will work to ensure that Medicare-eligible individuals have access to health savings accounts and will also study alternative means of financing health care.
The policies, passed at the AMA's Annual Meeting in June, seek to help fine-tune health savings accounts, which were created under last year's Medicare reform act. While the AMA supports HSAs as an option for consumers, the law "could use some tweaking," said Duane M. Cady, MD, chair-elect of the AMA Board of Trustees.
"Health savings accounts are clearly part of our overall program for health system reform," Dr. Cady said. "[But] we need to get it right."
HSAs are tax-free accounts that are paired with high-deductible health insurance to give consumers another way to pay for their health care. They are a broader version of the medical savings accounts that were established nationally in the 1990s. But unlike MSAs, both workers and their employers can contribute to the accounts. And anyone, not just the self-employed or small business employees, can have them.
Under current law, HSAs are available only to people younger than 65. But in 2005, the Centers for Medicare & Medicaid Services is expected to establish Medicare savings accounts, which are essentially HSAs for Medicare participants. The AMA resolution calls on the organization to monitor the pending regulations to ensure that Medicare participants can take advantage of these tax-saving tools.
In a separate action, AMA delegates voted to further study alternative means for financing health care. The resolution sprang from a call to improve HSAs. That original call included a push to seek legislation establishing a new kind of account called an "individual medical account" that could be created without requiring consumers to have high-deductible insurance.
In discussions leading up to the vote, delegates were divided about the idea's merits.
Don Chaplin, MD, an internist and delegate from North Carolina, said requiring insurance severely limits the ability of HSAs to serve as consumer-driven plans. Also, the high deductibles tied to such insurance could discourage some patients from getting early preventive care.
But Georgia Tuttle, MD, of the AMA's Council on Medical Service, said that doing away with HSAs' insurance requirement "would be viewed by many as irresponsible policy." The fear is that without the insurance requirement, the accounts would be abused by people simply looking for a tax break.
While the final resolution did not specifically address the idea of individual medical accounts, it left the door open for further study.
In a report prepared before the discussions, the Council on Medical Service provided an overview of HSAs and made policy recommendations. While acknowledging that HSAs have been criticized for being only for "the healthy and wealthy," the report said those concerns had not been borne out. It recommended that the AMA encourage employers to offer the accounts to their employees.