Focus Point - Roth MSAs

Commentary by Pete du Pont

I'm Pete du Pont with the National Center for Policy Analysis. You've heard about Roth IRAs. How about Roth MSAs?

Congress can make it easier for the elderly to self-insure for drug costs and other medical expenses not paid by Medicare or private insurance by letting senior citizens turn their Roth IRAs into what NCPA president John Goodman calls "Roth MSAs" - Medical Savings Accounts.

Roth IRA withdrawals are tax-free after age 59 and one half. People can contribute up to $2,000 a year to a Roth IRA at any age, and withdraw funds at any time.

Used as a Medical Savings Account, a Roth MSA could pay expenses of seniors with only Medicare coverage. For those with both Medicare and Medigap insurance, the Roth MSA could pay expenses not paid by either.

Some relatively minor changes to current law would be needed, but Congress can allow Roth IRAs to be used as Roth MSAs on relatively short notice. This would significantly help senior citizens who face potential out-of-pocket expenses for prescription drugs, and make the expensive Clinton administration proposals unnecessary.

Those are my ideas, and at the NCPA we know ideas can change the world. I'm Pete du Pont. Next time, minimum sense, minimum wage.