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Schundler Touts Medical Savings Accounts

Jersey City Mayor Says State Should Adopt Health Care Innovation


(TRENTON, APRIL 3) – Jersey City Mayor Bret Schundler said that as Governor he would work to add a Medical Savings Account option to the State Health Benefits Plan – a move he said would allow state and municipal employees who are covered by them to have more freedom in selecting medical care, and at the same time, would save the state money.

 “Medical Savings Accounts would cover the same medical procedures as the state’s current health plan, at the same level of coverage – or better,” Schundler said. “The difference is that this would provide employees with more freedom in making health care decisions, while costing less than traditional indemnity coverage.”

 Schundler noted that in 1995, Jersey City became the first governmental entity in the United States to offer MSA’s as part of a 3-year state pilot program. The accounts were a smash hit with employees and produced benefits cost savings for the city.

 “Our employees were extremely pleased with the MSA’s, but political inertia has caused state leaders to ignore our results,” Schundler said. “Bills to establish this new health care option have been introduced in the past two legislative sessions, unfortunately to no avail.”

 An MSA bill, A-2344, sponsored by Assemblyman Rick Merkt and Assemblywoman Clare Farragher has been introduced during the current session. Assemblymen Richard Bagger and Francis Blee, and Senator Walter Kavanaugh introduced a similar bill in the 1998-99 session.

 Under an MSA, the first $2,000 of family medical expenses is paid out of an employee-funded account. The employee pays the next $200 out-of-pocket as a back-end deductible. Above $2,000, an insurance policy kicks in to cover 100 percent of additional costs. But if at the end of the year, the employee’s total medical costs are less than $2,000, the money left over in the account is given to the employee.

 “This means that employees will be able to choose their own doctors and medical procedures, and will no longer have deductibles or out-of-pocket expenses for covered procedures. At the same time, this will cost taxpayers less than the insurance plans currently offered by the state to its employees and the municipal workers currently enrolled in the state plan,” Schundler said.

 Schundler said that Medical Savings Accounts should not only be implemented by the state for its employees, but that they should serve as a model for how private employers might better provide health care coverage for their employees.


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