According to published reports, President Bush tonight will acknowledge the nation’s health care cost and coverage problems in the State of the Union address, but offer poorly designed and inadequately financed solutions that would actually exacerbate the problems. The President’s plans for extended tax credits and health savings accounts would erode coverage in the name of expanding it, and shift health costs to families in the name of controlling them. Placing a cap on medical malpractice lawsuits – a conservative fixation for years – would have virtually no effect on costs while restricting the ability of patients to hold doctors and hospitals accountable. Overall, the President’s health care plans would do more to protect health insurers and the drug industry than they would to address the growing crisis of 44 million uninsured Americans and record-high health care cost growth.
Tax credits and Health Savings Accounts would miss those in need and shift costs rather than control them. The President’s proposed $1,000 tax credit for individual coverage would cover few of the uninsured (1.9 of the 44 million uninsured); discriminate against older and sicker people (who can be charged exorbitant rates or denied coverage altogether); and destabilize the employer-based health insurance system, which covers 175 million Americans today. In addition, Bush’s Health Savings Accounts (HSA’s) are just another tax break for high-income Americans at the expense of those in poor health. HSA’s promote high-deductible health plans and tax deductible accounts that attract younger, healthier and wealthier Americans. People who are not healthy or wealthy and are forced into such plans have little leverage to negotiate lower prices and thus face high costs or reduced access to needed services. Those remaining in traditional insurance could pay premiums twice as high if HSA’s become widespread.
Proposed Association Health Plans would reduce benefits and allow insurers to “cherry-pick” enrollees. The President’s proposal for Association Health Plans (AHP’s) would allow selected small businesses to operate outside of state insurance laws. According to the Congressional Budget Office, AHP’s provide sub-standard health benefits and allow insurers to “cherry pick” low-cost businesses, raising costs and undermining coverage for everyone else. Appropriately, a broad coalition of consumer advocates, health care providers, governors, insurance commissioners, and even insurers oppose the President’s policy.
A real health care agenda would expand coverage for all Americans and tackle rising costs for working families. The President’s plan puts politics ahead of preserving coverage for millions. Instead, the President should expand investment to prevent states from keeping low-income children on waiting lists for coverage or scaling back their Medicaid coverage. He should adopt coverage expansion policies that do not risk eroding employer coverage. And, he should take on the root causes of health care cost growth – weak price negotiations by health insurers and skyrocketing prescription drug costs – rather than protecting these special interests and making matters worse for the average American family struggling to pay high health care bills.