BIG WIN FOR SMALL BUSINESS

THE STANDOFF WENT ON FOR over a decade: In one corner was Dallas economist John Goodman, vociferous supporter of medical savings accounts. In the other. Democratic Sen. Ted Kennedy, long-term advocate of nationalized medicine.

Goodman had developed a strategy for medical savings accounts and had begun trying to introduce it into legislation. Kennedy, his No. 1 opponent, remained obdurate.

Then last August, the debate closed with a compromise when a trial offering of medical savings accounts was included in the Kennedy-Kassebaum health care bill. Beginning Jan. 1,750,000 accounts will be available on a four-year test basis. Like medical IRAs, the accounts allow employees-who must also have low-cost catastrophic care policies-to put away several thousand dollars tax-free each year and have direct control over how their health care dollars are spent. The accounts are especially attractive to the self-employed and employees of businesses that aren’t large enough to bargain with insurance companies for low rates.

Goodman, who heads the conservative National Center for Policy Analysis, a Dallas-based think tank that offers market-based solutions in matters of public policy including health care, insists his plan is the best way to rein in health care costs.

“It’s going to allow a transfer of money and power from large bureaucracy to individual employees, and that’s going to fundamentally change the nature of the entire health care system,” he said.

Opponents believe medical savings accounts will benefit healthy people at the expense of those who are sick, that they will encourage employers to purchase low-dollar insurance policies for their employees and pocket the difference.

Naturally. Kennedy and Goodman disagree on what the compromise means-Kennedy’s office calls it “a trial basis” and Goodman touts “a major breakthrough.”

Goodman remains optimistic about the future of medical savings accounts. “The momentum just built and built and built until it could not be stopped,” he said. “The momentum will continue to build to allow everyone in America to have a medical savings account.”