Health Savings Accounts: Ten Years On

On a wintery Monday night in Washington about 70 people gathered at a banquet to celebrate the tenth anniversary of the signing of Health Savings Accounts into law.

Fittingly, the dinner, organized by the National Center for Policy Analysis (NCPA), was held in the O’Byrne Gallery of the DAR’s Constitution Hall where President Bush signed the law on December 8, 2003.

Represented were many of the people who conceived of the idea in the 1980s, the policy staff and legislators who enacted the first Medical Savings Accounts (MSA) law in 1996, the entrepreneurs and regulators who took the concept and created Health Reimbursement Accounts in 2002, and the companies who have turned the law into the products and services that benefit tens of millions of people today.

NCPA President John Goodman, who is often referred to as “the father of HSAs,” and myself opened the commemoration with a tribute to the late J. Patrick Rooney, Chairman of Golden Rule Insurance, who did more than anyone else to popularize the idea and shepherd it through the legislative hurdles.

Brian McManus and Darryl Ritchie, who worked closely with Mr. Rooney, were on hand to discuss how hard he worked to keep the MSA proposal bipartisan, recruiting Democrat co-sponsors such as Representatives Andy Jacobs and Richard Gephardt, and Senators John Breaux and Tom Daschle.

Dr. Reyn Archer, the son of Rep. Bill Archer, former Chairman of the Ways and Means Committee, remembered how his father negotiated with Senator Ted Kennedy to include MSAs in other legislation. And former Senator Phil Gramm recalled how the bipartisan support fell apart over President Clinton’s attempt to enact sweeping health reforms.

Kyle Rolfing and Dr. Mike Parkinson, formerly of Definity Health and Lumenos respectively, spoke of taking the MSA concept a step further after the collapse of managed care in the late 1990s. They found a way to apply the idea under current tax law and sell it to large corporations. They found a receptive audience in the Bush Treasury Department, according to Bill Sweetnam, which termed the effort Health Reimbursement Arrangements.

The embrace of consumer-directed health care by larger corporations helped secure the HSA legislation in 2003, aided by regulators such as Roy Ramthun, who also read a letter of congratulations from former Secretary of the Treasury John Snow. Mr. Snow called HSAs “an example of public policy done right,” and said, “The creation and implementation of HSAs represents one of the most meaningful health policy innovations in a generation and one that I count as a great accomplishment of the Bush Administration and my tenure as Secretary of the Treasury.”

Also on hand were representatives of many of the companies who are developing and marketing the products and services that support consumers in the health care marketplace, including, Evolution1, Health Equity, ConnectYourCare, Alegeus Technologies, Acclaris, Bank of America, Golden Rule Insurance, Optum Bank, and PNC Bank.

The commemoration was topped off with a champagne toast by Dr. Goodman, honoring all those who have made the program successful and calling for restoring the patient to the center of the health care system in the future.

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