Congressman Makes Pitch To Expand Eligibility for MSAs.

U.S. Rep, Bill Archer, R-Texas, said he is pushing to expand the legislation under which Congress created medical savings accounts on a pilot basis in 1996. Without congressional action, participation in MSAs will expire at the end of the year.

Medical savings accounts provide tax-free savings accounts to pay for routing medical costs, such as prescription drugs. "MSAs are also one of the best patients' rights we can pass this year, because MSAs, patients and doctors--not insurance companies--make the health-care decisions."

Archer's plan would allow more people to create medical saving accounts by repealing the 750,000-person cap on participation and by expanding the eligibility requirements. The plan also removes the four-year limit on the pilot project.

The plan would make medical savings accounts more affordable by lowering the minimum deductible to $1,000 for individual coverage and $2,000 for family coverage, Archer said. Current levels are $1,500 and $3,000, respectively.

All employers would be allowed to make contributions jointly with employees, up to 100% of the deductible, under Archer's plan. Current law allows only the self-employed and small employers to participate, and it restricts contributions to 65% of the deductible for individuals and 75% for families.

The Health Insurance Association of America supports Archer's plan. "Medical savings accounts offer many consumers a cost-effective coverage option and provide coverage to a significant number of people who previously had none," HIAA President Chip Kahn said in a statement.

The number of people opening medical savings accounts increased 28% to 54,204 in 1999, from 42,477 in 1998, Archer said, citing Internal Revenue Service data.