Change in economy requires change in health insurance

Posted: Thursday, October 16, 2003

Recently, the Census Bureau delivered the discouraging news that 43 million Americans are now uninsured, more than in the previous year. The biggest jump is among people who had previously received coverage from their employers.

In its analysis of the issue, the Washington Post cited "the growth of the service and small business sectors" as key factors contributing to the rising number of Americans who lack health insurance.

The reality is our economy is changing, as more of us are working for small businesses or are self-employed. In fact, small businesses create some three-quarters of all net new jobs. But as our economy is changing, our health insurance system is becoming increasingly outdated. The old model of large corporations providing traditional health coverage for employees is increasingly less relevant to many in the modern work force.

Changing times require a change in how health insurance is provided.

One new idea that is working for many is Medical Savings Accounts (MSAs), which combine a tax free savings account to cover routine medical expenses, with a traditional insurance policy with a high deductible to cover catastrophic expenses. MSAs are an attractive and more affordable option for many people including small business people who otherwise can't afford the rising cost of insurance.

According to the latest government figures, 73 percent of those who have turned to MSAs (also known as Health Savings Accounts) were previously uninsured.

Currrently, the number of MSAs available is highly restricted by federal law, and their availability is set to expire in the coming year. Legislation to make MSAs permanently and widely available is currently under consideration by a House-Senate conference committee. If passed, MSA expansion could be the best thing Congress ever does to help the nation's 43 million uninsured.

Darrell McKigney


Small Business Survival Committee

Washington, D.C.

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