Resolution Urging Congress to Create Private Individual Medical Accounts Exposed

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The Resolution Urging Congress to Create Private Individual Medical Accounts was adopted by ALEC's Health and Human Services Task Force and approved by the ALEC Board of Directors in 1998. ALEC has attempted to distance itself from this piece of legislation after the launch of in 2011, but it has done nothing to get it repealed in the states where it previously pushed for it to be made into law.

CMD Bill Summary

This Resolution urges the privatization of Medicare by permitting the creation of Individual Medical Accounts (similar to Health Savings Accounts). The Resolution is vague, but it is doubtful that such accounts would be adequate to cover the cost of necessary medical care for seniors and would probably serve as a tax shelter for the wealthy.

ALEC Resolution Text


The Resolution urges Congress to enact legislation that would amend the Medicare program so as to authorize the use of Private Individual Medical Accounts to assist individuals in saving the resources necessary to pay for their health care needs in retirement.

Model Resolution

WHEREAS, it is widely agreed that the Medicare program is in need of major structural changes if it is to remain a viable alternative for the health care needs of future generations; and

WHEREAS, in 1996 Medicare expenditures made up twelve percent (12%) of the federal budget, more than double the level in 1975; and

WHEREAS, the Congressional Budget Office estimates that at the current rate, by 2006 Medicare will consume eighteen percent (18%) of the federal budget -- more than the United States' education, crime, and defense budgets combined; and

WHEREAS, during the lifetime of the next generation, Medicare's income will only cover sixty percent (60%) of its expenditures; and

WHEREAS, the existing method of funding Medicare by taking an ever increasing payroll tax out of the paychecks of working Americans to pay for the medical benefits of retired Americans, is a pyramid scheme which cannot be maintained in future years; and

WHEREAS, in 1998 there are four workers to pay taxes to support each Medicare beneficiary, by the year 2030 there will only be two workers for each beneficiary; and WHEREAS, in the 1996 Annual Report of Trustees of the Federal Hospital Insurance Trust Fund, the Medicare Trustees predicted that the Medicare program would be depleted by the year 2001.

NOW THEREFORE BE IT RESOLVED, that the State/Commonwealth of {Insert State/Commonwealth Name} urges the U.S. Congress to enact legislation amending the Medicare program to allow for the creation of a system of Individual Medical Accounts wherein individuals will build a fund over their working careers that will provide the resources to pay for their health care needs in retirement.

BE IT FURTHER RESOLVED, that copies of this resolution will be distributed to all Governors and members of the U.S. Senate and the U.S House of Representatives.