Savings Accounts Key to Drug Law

The worker then has $2,600 to spend on health care for the year, tax-free. And, unlike current flexible spending accounts, the worker may keep whatever is left in the account at the end of the year and continue to accrue earnings on it tax-free while making additional contributions in the new year. Money withdrawn for other uses is subject to taxation and a 10% penalty.

Health savings accounts are available to even the wealthiest taxpayers, unlike some other federal tax benefits.

"They will be attractive to the affluent and the healthy," said Edwin Park, senior health policy analyst at the liberal Center for Budget and Policy Priorities. But he argued that premiums for conventional policies, which would be held by workers who are sicker and have higher medical expenses, could then skyrocket, leading some employers to stop offering such coverage.

"This is terrible policy on the tax, fiscal and health fronts," he said.

But supporters believe there soon will be an explosion of high-deductible policies on the market, and they argue that some workers now unable to afford more conventional health insurance would buy the cheaper policies.

"I would imagine even more companies will hop on the bandwagon and start selling these [high-deductible] plans," said Devon Herrick, a fellow at the National Center for Policy Analysis, a think tank that promotes the privatization of government programs. "Now there's a 250-million person market."

Supporters also believe that the accounts will "make patients wiser consumers" so that they stop spending money on health care they don't need. A study of similar accounts conducted in South Africa last year found that health-care spending dropped 47%, Herrick said.

But Shearer worries that the likely proliferation of high-deductible insurance policies will leave many people unable to afford preventive and early-stage care, resulting in illnesses that cost far more to treat.

Sepp's only worry is that Democrats will try to dilute the health savings account provisions of the Medicare bill.

"But we'll be there," he said, "trying to defend the tiny crumbs that were thrown to taxpayers."