America's independent, non-partisan advocate for overburdened taxpayers.


An Open Letter to the House of Representatives: Support the Blackburn Bill Expanding Health Savings Accounts

June 7, 2006

Dear Representative:

On behalf of the 350,000 members of the National Taxpayers Union (NTU), I urge you to support the "Health Care Choices for Seniors Act" (H.R. 4551) sponsored by Representative Marsha Blackburn, which would expand Health Savings Accounts (HSAs) and implement responsible cost-controls. HSAs now cover 3.2 million people, nearly 50 percent of whom are age 40 and over, and HSA expansion would create a worthy alternative to blanket federal coverage.

As you know, the recent report by the Trustees of Social Security and Medicare projected that Part A of Medicare will exhaust its reserves by 2018. In the next nine years alone, Part A will burden taxpayers with $112 billion in unfunded liabilities. H.R. 4551 is an innovative approach to tackling Medicare's pending insolvency.

NTU and its members strongly favor market-based approaches to health care. H.R. 4551 would allow retirees to waive the Medicare entitlement, enroll in an Alternative Voucher Program, and then use their HSAs and high deductible health plans for medical care. In return, the federal government would contribute no more than $200 a month either to a retiree's HSA, or for the payment of high deductible insurance premiums.

In the last fiscal year the federal government spent approximately $300 billion on Medicare, or about $7,000 per beneficiary. Under Representative Blackburn's proposal, an individual would be entitled to a maximum of $2,400 per year, a significant cost savings over the current system that is projected to grow 27 percent from FY 2004 outlays.

After the release of the Trustees report earlier this month, many taxpayers had hoped that Congress would confront Medicare reforms now rather than wait until harsh options have to be taken. Indeed, the addition of the new Part D entitlement, which further strains federal finances, makes such a debate all the more imperative. Congress must act to address Medicare's looming financial meltdown, and H.R. 4551 is a rare opportunity to help curtail runaway entitlement spending, inject free market principles into heal care, and empower consumers all at once. We look forward to House passage of this important legislation.


Sam Batkins
Policy Analyst