July 24, 2006
WASHINGTON, D.C. – U.S. Senator James M. Inhofe (R-Okla.) recently introduced legislation allowing Health Savings Accounts (HSAs) under Medicare in an effort to provide seniors with added flexibility and choice in selecting healthcare options. Inhofe’s landmark legislation, known as the Medicare Health Savings Account Bill (S.3697), would, for the first time, provide America’s Medicare seniors the same benefits of consumer directed health plans that many Americans now enjoy with HSAs.
“Health Savings Accounts allow Americans to choose how they purchase health care services and this same opportunity should be afforded to our citizens on Medicare,” Inhofe said. “I have long supported Health Savings Accounts as I believe the individual should control their own medical coverage, not the government.”
Inhofe’s legislation creates a new Health Savings Account (HSA) program under Medicare that incorporates a high deductible health plan and an HSA account. The Medical Savings Accounts (MSAs) allowed under current law are so ineffective that none have ever been offered. Beneficiaries who choose the HSA option will receive an annual amount that is equal to 95 percent of the annual Medicare Advantage (MA) capitation rate with respect to the individual’s MA payment area.
These funds provided through the Medicare HSA program can only be used by the beneficiary as a contribution into an HSA or for payment of high deductible health plan premiums. The individual also has the opportunity to deposit personal funds into the Medicare HSA.
Inhofe’s bill also guarantees that participating seniors be notified of the amount they will receive 90 days before receipt to ensure they have time to determine the best and most appropriate HSA to accommodate their needs.
The bill empowers the Secretary of Health and Human Services to appropriately deal with fraud and requires providers to accept payment by individuals enrolled in a Medicare HSA just as they would with an individual enrolled in traditional Medicare.
Inhofe’s legislation will be referred to the Senate Finance Committee for its immediate consideration