Senate committee puts brakes on House-approved medical savings account bill
By sending it for amending, the Senate State Affairs Committee has put the brakes on House Bill 595 that would expand Idahoans’ abilities to utilize what are known as medical savings accounts (MSAs).
“I would have you know that this bill passed in the House with only one ‘no’ vote,” Rep. Brandon Hixon, R-Caldwell, told the committee members as he presented the bill. “I urge you to send this bill to the floor of the Senate with a do pass.”
The bill would expand the maximum amount that one may contribute to an MSA from the current $2,000 annually, to $20,000. It also seeks to extend a 10 percent tax credit to an employer who contributes to an employee’s MSA, while also stipulating that a person with an MSA in the state must completely utilize the funds in the account before receiving any government assistance for health care.
“What this bill boils down to is putting money back in to the hands of the people of the state of Idaho so they can have a fighting chance with rising health care costs,” Hixon stated. “These costs rise year after year. I think this would be to the benefit of every Idahoan.”
“We support this bill,” Elizabeth Crider, spokesperson for the Idaho State Dental Association told the committee. “I note that under this provision the maximum contribution to an account would be $20,000, but our association would have you know that for many people who can’t afford a dental insurance plan, $20,000 is in the price range of one dental emergency. We also want to remind you that dental health is important for one’s overall medical well-being.”
“We have long supported flexibility for small business owners,” said Suzanne Budge, Idaho spokesperson for the National Federation of Independent Business. “Medical savings accounts came to us from the federal level of government back during the ‘90s, but support at the state level is a helpful tool as well. We know this bill will offer small business owners even greater flexibility for themselves and their employees.”
Despite the enthusiastic support for the bill in the House and among those testifying in the committee, some members of the committee deemed the bill problematic.
Sen. Brent Hill, R-Rexburg, explained why he didn’t like the legislation.
“I've spent 13 years here trying to simplify our tax code and I've done a rotten job,” Hill said. “We keep enacting differences between the federal and state return, we keep making the tax code more complex and I’m afraid this bill makes it more complex as well.”
Hill added: “We talk about promoting the free market system, but we're talking here about giving employers a 10 percent credit for contributing to a dental savings account. That’s a tax credit that somebody else won’t get. And I'm always overly concerned with fairness. With the formula in this bill one could get a $30,000 deduction with a $20,000 cash outlay. I don’t want to dismay anyone who is enthusiastic about this bill, but I think we need to be very clear and honest about what is in this bill.”
“I think we want to be fair to all taxpayers if we can,” Sen. Elliot Werk, D-Boise, added. “If we're starting to double and triple dip then we lose our fairness.”
Werk then proposed that the bill be sent for amending. “I suggest that we lower the cap to $10,000 a year and eliminate the 10 percent tax credit to employers.”
“I can support something like that,” Hill replied.
“If we send it for amending, we don’t know how it might be amended,” Sen. Jeff Siddoway, R-Terreton, noted.
Werk nonetheless motioned that the bill be sent for amending, and Hill seconded the motion. Five senators voted in favor of the amendment, thus putting the bill on hold for possible changes to what passed in the House.