Whitesburg KY

Feds to test health savings accounts for poor

The Bush administration intends to test the effectiveness of health savings accounts for the poor in a trial in which someone making $20,000 a year could get health coverage for about $19 a week.

Bush has long pushed health savings accounts as a way to slow the rising cost of medical care and extend basic coverage to the uninsured.

Under the test in the state of Indiana, eligible residents can pay up to 5 percent of their incomes into state-subsidized “Personal Wellness and Responsibility Accounts” that cover their initial medical expenses up to $1,100. Once that deductible is reached, private insurance purchased by the state kicks in.

Eligibility is limited to adults with incomes below twice the federal poverty level. The poverty level is now $10,210 for an individual and $20,650 for a family of four.

The waiver is the first of its kind for the Medicaid program, a state-federal partnership that provides health coverage to the poor and disabled.

The program will be monitored

closely because of the philosophical divide among lawmakers about the value of health savings accounts for the poor. Many say such accounts work best for healthier and higher-income people with low medical expenses.

Judith Solomon, senior fellow at the Center on Budget and Policy Priorities, said she doubts that many people making $10,000 a year can afford to pay $500 for health insurance. She said that about 50,000 people lost Medicaid coverage in Oregon after that state got permission to raise insurance premiums to $20 a month.

“You can say it’s better than nothing, but I just don’t see how many of those folks will be able to afford it,” Solomon said.

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