Savings Account Fight Threatens Health Bill

Legislation guaranteeing access to health insurance for workers who change jobs appeared doomed Friday because of a dispute over medical savings accounts.

House and Senate Republican leaders consulted privately throughout the day, trying to design a pilot program for such tax-deductible accounts that would be acceptable to all of them.

But the ideas being floated were described as a “death sentence” for the bill by Democratic Sen. Edward Kennedy, who has been in close contact with the White House.

Opponents fear that such savings accounts would be most attractive to healthy people, thereby draining their contributions from the risk pool that insures the sickest Americans. That could drive up health premiums for the people who need the most health care.

Democrats have said they would accept a trial for tax-deductible medical savings accounts in a few states. But Republicans are suggesting a nationwide experiment that limits which employers could offer them.