State "Tough Choices" Price Tag Nearly Equal to Cost of HSA Conformity By IPR May 20, 2005, 15:16
PORTLAND -- On Saturday, May 21 the Baldacci Administration will be holding an 800 person focus group in order to collect Mainers opinions of health care. The Administration is proceeding with the event after it was postponed earlier this spring by a classic Maine snowstorm.
The Administration plans to spend at least $350,000 on the focus group even while they insist that Maine cannot afford conformity of the Maine income tax code to reflect the federal exemption for contributions to Health Savings Accounts (HSA). Achieving HSA conformity is estimated to cost $600,000, the tax break Maine people are being denied.
"Where are the Governor’s priorities? While payinThursday, November 04, 2004 9:38:15 PMMainers affordable health insurance options," said Tarren Bragdon, Director of Health Reform Initiatives for The Maine Heritage Policy Center. "The Administration has repeatedly stated that the State cannot ‘afford’ to allow Mainers to deduct Health Savings Account contributions on their Maine income taxes. This tax makes an affordable health insurance option - HSA health insurance plans - more costly in Maine than almost all other states."
According to an April 2005 America’s Health Insurance Plans study, 37% of those purchasing HSA plans nationally are uninsured. Additionally, 27% of small business offering HSA plans did not previously provide health insurance to their employees.
"HSAs are providing coverage to the uninsured and should be made as affordable as possible here in Maine. It is unconscionable to spend almost $440 a person for an elaborate focus group while denying all Mainers an affordable health insurance option," said Bragdon.
HSAs were created by the Medicare bill signed by President Bush on December 8, 2003. The savings accounts are designed to offer individuals an affordable health insurance tool by allowing for them to save for future qualified medical and retiree health expenses on a tax-free basis. HSA plans combine high deductible health insurance, typically with premiums 30-40% lower than traditional health insurance plans, with a tax-advantaged savings account to help pay out of pocket costs.
The federal tax laws allow an individual to put up to $2,650 a year or a family to contribute up to $5,250 a year into the account. The amounts are increased for inflation in future years. Maine has not yet allowed for the tax exemption on the income tax.
"In denying Mainers HSA tax savings granted by the federal government and almost all states, the Governor is saying 'Tough Luck' to Mainers who want the affordable health insurance options available to other Americans," stated Bragdon.