Money repaid to the healthy

As the mayor of Jersey City I would like to invite President Clinton to talk to me about a different approach to health care. We are about to provide our municipal employees with Medical Savings Accounts, which will ensure comprehensive coverage without tax increases and without the ultimate threat of rationing.

The employee's first $2,000 of family medical expenses will be paid out of the Medical Savings Accounts. Above $2,000 in medical expenses, the insurance policy will kick in and cover 100% of the costs. Added together, this means that employees will no longer have any health care deductibles or out-of-pocket expenses for covered procedures. The most innovative aspect of the plan is that if the employee's total health care costs for a year fall below $2,000, and there is money left in the savings account, that money will be returned to the employee at year's end.

There will be no incentives for fraud and cost-shifting. Employees don't make fraudulent claims when they know that Medical Savings Accounts dollars not spent will be returned to them in cash, and doctors are less likely to shift costs onto patients when they know those patients will be personally affected by a padded bill.

How can Jersey City's experience be replicated nationwide? By replacing the current system of tax deductions for employer-provided health benefits with a system of refundable tax credits for individually purchased health insurance policies. This would allow every American, employed or not, to buy a basic health care policy at less cost than what we spend today.

With a federal Medical Savings Accounts system, all Americans with an income would use their tax credits to buy health insurance from any group provider they chose - such as a church or bowling league, not just an employer. Those without sufficient income to fully benefit for the tax credits would receive a federally funded health insurance voucher to make up the difference.