Health Care Mini-Reform

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WASHINGTON, D.C.: Few Americans would object to paying lower insurance premiums. But opponents of the Republican-sponsored legislation that would allow people to create tax-deductible medical savings accounts in exchange for lower premiums and higher deductibles argue that it may result in higher premiums for those who cannot take advantage of such accounts, while also increasing the number of uninsured Americans. "The only people who would elect a medical savings account are those who are healthy and therefore don't expect to have many expenditures, and those who can afford to put the money aside," says TIME's Bernard Baumohl. "This means that insurance companies, whose rates are not federally regulated, might raise the rates for everyone else on the premise that those without the accounts have higher claim rates." If so, those who could not afford the higher rates, or whose employers declined to offer the more expensive coverage, would join the millions of working Americans who are already uninsured. The compromise reached Thursday by House and Senate negotiators, which allows MSAs only on a limited trial basis for people who are self-employed or work for a small business, makes sense, adds Baumohl. Reason: because those individuals usually buy their own insurance or are insured by companies too small to negotiate reasonable rates, they tend to pay higher premiums than people who are employed by larger companies. -->