AHIP Hails FSA Expansion, Medical Liability Reform

WASHINGTON, May 12 /PRNewswire/ -- America's Health Insurance Plans (AHIP) today commended the House of Representatives for passing an expansion of flexible spending arrangements (FSAs) and caps on medical liability awards, two important steps toward making health care more affordable and accessible.

The FSA expansion would enable employees to rollover unspent FSA funds to the next year or to direct such funds into a health savings account (HSA).

"FSAs are an important tool for consumers and employers, but the current use-it-or-lose-it rule is a major barrier keeping many employees from opening up an FSA. Allowing some FSA rollover will help more employees to take advantage of this valuable benefit," said Karen Ignagni, President and CEO of AHIP.

The medical liability reform legislation would cap non-economic damages in medical malpractice suits at $250,000.

"The out-of-control legal system is driving health care costs higher, and driving good doctors out of business," Ignagni said.

A 2002 PricewaterhouseCoopers report attributed seven percent of the rise in health care spending solely to the impact of litigation.

Ignagni cited AHIP's recent poll of voters' opinions on health care as evidence that today's votes marry good policy with good politics.

"Voters understand that the litigation lottery is sending health care costs soaring and they believe tax incentives such as FSAs are a smart approach to expanding access and promoting awareness of costs," Ignagni said.

The Public Opinion Strategies poll of 17 political battleground states found that seventy-two percent of likely voters are more likely to vote for a candidate who supports capping non-economic damages in medical lawsuits. Sixty-three percent of likely voters are more likely to vote for a candidate who supports tax free savings account to help make health care more affordable.

Liberalization of FSA rules and medical liability reform are among the dozens of specific policy recommendations included in a comprehensive policy statement that was recently approved by AHIP's board of directors.

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