California — Fighting for MSAs

Mark Schiller, MD
Article Type: 
Report from the States
Summer 1996
Volume Number: 
Issue Number: 

The California Chapter of the AAPS (CAAPS) has been in existence for about 18 months now. The Golden State has been a battleground in which our chapter has been in a continual struggle against managed care (reportedly controlling 85% of the health care market), on the one side; and an influential bunch of single-payer advocates on the other side. (Three million Californians voted for a single-payer system in the 1994 ballot initiative.) Some of these battles were reported last year at the AAPS Annual Meeting in Falls Church, Virginia. Since then, we have remained active in several areas.

One of our primary areas of focus has been passing Medical Savings Account (MSA) legislation. Toward this purpose, we are sponsoring two mail legislative vehicles: Assembly Bill 1758 and Senate Bill 484, which were first presented during last year’s legislative session, but held up (in the confusion surrounding the appointment of Willie Brown’s successor as Speaker of the Assembly) by the efforts of managed care lobbyists. These bills carried over to this year’s session.

SB 484 is a holding bill that authorizes the state to assess the effects of MSAs in the state, but it can be amended and expanded later in case AB 1758 fails to pass. AB 1758, the “Knowles and McDonald Patient Empowerment Act,” allows for state income tax deductions for funds placed into MSAs. Maximum annual deductions are $1500 per individual and $3000 per family. Interest from MSAs is also deductible.

Despite the current partisan bickering in Congress over MSAs, our California legislation has benefited from a good deal of bipartisan support. Both bills are co-authored by one white male, conservative Republican and one black, female liberal Democrat. The two Democratic authors are convinced MSAs would help their constituents — primarily working class blacks. The bipartisan nature of the bills authorship helped them pass through various committees, especially in the Assembly, where there has been particularly fierce partisan fighting.

One of our concerns now is how the current debate in Washington will affect our bipartisan support in California. The Democrats in Washington, for purely political reasons, have turned a bipartisan issue into an exceptionally partisan one. Influential democrats such as Gephardt, Breaux, Daschle, and Gibbons had all gone on record in the past as favoring MSAs. Even President Clinton had shown support for tax-deductible medical accounts. However, MSAs are now being described as a purely Republican plan to favor the wealthy and healthy. During a recent trip to Sacramento, it became clear to me many Democrat staff members who weren’t particularly knowledgeable about MSAs, were discounting the concept as a purely Republican plan. We have tried to educate the legislators and their staff. In most cases, once they hear about our Democrat co-authors, they tend to listen more attentively, and generally begin to appreciate the myriad advantages of MSAs. Information goes a long way in helping remove the wool from their eyes.

At present, both bills have passed through a series of committees and have made their way into the chamber opposite that of origin. AB 1758 will be heard in the Senate Revenue and Taxation Committee on June 5, 1996. SB 484 is not currently scheduled for any further hearings. If AB 1758 passes, it will go on to a final vote this summer, hopefully passing on to the Governor’s desk. The last hurdle will be the Governor’s office. Though some of Governor Wilson’s top advisors are pro-managed care and may pose some problem, we believe the Governor will sign the bill because he will see it as a Republican issue. We have an excellent lobbyist who enjoys good relations with the administration, so we are hopeful we will avoid problems and succeed.

In all, we are fairly optimistic about passing our MSA bills. Given the politically charged situation in Washington, we are particularly happy we continued to push for MSA legislation in California. We are the only group that has single-mindedly lobbied for MSA legislation — this, illustrating the value of CAAPS. In addition, we hope that demonstrating the presence and value of MSAs in the Golden State, the most populous state, will advance this issue to the forefront of the national debate, and consequently, increase media coverage of MSAs. California often leads the nation for better or worse, and CAAPS will do its best to make it for the better.

Mark Schiller, MD is the President of the California Chapter of the AAPS. Dr. Schiller practices psychiatry in San Francisco, California. His address is 4644 Geary Blvd., Suite 133, San Francisco, CA 94118.

Originally published in the Medical Sentinel 1996;1(2):28-29. Copyright©1996 Association of American Physicians and Surgeons (AAPS)


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