Gutknecht wins backing for medical savings accounts bill By Edward Felker

WASHINGTON -- Rep. Gil Gutknecht, a Republican from Rochester, recently announced the backing of the Minnesota Police Pension Council for his proposal to let Minnesota public employees set up medical savings accounts.

Current law does not allow public employees to set up the accounts, which are similar to IRA retirement plans. They allow pre-tax contributions and tax-free withdrawals for expenses not covered by traditional insurance plans.

Gutknecht, with the backing of the Minnesota House delegation except Rep. James L. Oberstar, a Democrat from Chisholm, joined Sen. Norm Coleman, R-Minn., in pushing their Minnesota MSA Empowerment Act. It would let the state's public sector serve as a pilot program for extending the accounts to all public employees.

State employees and state pension plans could contribute to an MSA plan under the bill. Dick Nelson, vice president of the Minnesota Police Pension Council, endorsed the plan on behalf of his group and the Minneapolis Retired Police Association. Gutknecht spokesman Bryan Anderson said the endorsements were the first for the bill, although more are expected.


He said Gutknecht's bill is not, however, intended to create MSA accounts that compete with traditional insurance plans. Such experiments have drawn criticism from those who fear what's called "adverse selection," where the MSAs attract healthy people, driving up costs for the traditional plans.

Gutknecht has yet to see legislative action on the proposal. He introduced a similar bill last year too late for consideration.

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