President Bush is expected to use his State of the Union address tonight to push a series of health care proposals – and the prospect of so much attention has health care wonks of all stripes unanimously thrilled.
That, however, is pretty much all they’re unanimous about.
The White House has hinted that Bush will advocate changes aimed at building a consumer- driven health care system, part of his goal of an “ownership society.”
The president’s proposals to change the nation’s $19 trillion health care system are sure to set off a storm of debate.
“There is no more urgent item on the domestic agenda than reforming the health care system in the United States,” said Michael F. Cannon, director of health-policy studies at the Cato Institute, a Washington D.C.-based free-market research group.
Bush’s proposals may include tax credits or deductions for out-of-pocket health care spending, lifting restrictions that prevent companies from selling health insurance in multiple states and expanding health-savings accounts.
The likely proposals don’t “address the real need for affordable, quality health care for all,” said Bill Vaughan, a senior policy analyst at Consumers Union.
An estimated 46 million Americans – including 1.3 million Coloradans – lacked insurance in 2004.
Experts predict the number will increase as the number of employers offering health insurance declines. In 2000, 69 percent of employers offered coverage; last year, the number had dropped to 60 percent, the Kaiser Family Foundation reports.
Health-savings accounts, a Bush favorite, are sure to be among the most controversial of his proposals.
The accounts, approved by Congress in 2003, allow individuals with high-deductible health coverage to contribute to tax-sheltered savings accounts – contributions that may be matched by an employer. The accounts can be used for health care not paid for by the policy.
The insurance industry reported last week that 3 million people have such accounts.
Proponents tout the accounts as a way for people to control how their health care dollars are spent. Some suggest that as people must pay for more of their health care, they will use less of it, which could hold down health care costs overall.
Critics, however, say the accounts are great for the healthy and wealthy – and banks and financial institutions that could make millions in transaction fees for setting up the accounts.
But, critics say, the accounts do little for low- and middle-income Americans who need health coverage.
To expand the accounts, Bush may propose increasing the contribution allowed. Currently, contributions are limited based on the size of the insurance deductible.
In addition, Cannon said, Bush may advocate allowing people to buy health insurance with health savings-account funds. Currently, the accounts can be used only to purchase health care.
If the president proposes expanding health savings accounts, “that would be an incredibly positive step” toward attracting more people, including those with lower and moderate incomes, Cannon said.
Even so, Paul Fronstin, a health economist with the nonpartisan Employee Benefit Research Institute, said he is not convinced the accounts would bring down overall health care costs.
That is because, Fronstin said, “20 percent of the population accounts for 80 percent of health care spending.”
He said there is little evidence people use more health care than they need because they have lower co-payments or deductibles.
The Consumers Union’s Vaughan is no fan of health savings accounts. Instead of focusing on those, he said, “we’ve got to get a handle on basic costs” such as lowering the price of drugs.
Tax breaks, another likely piece of Bush’s plan, will do little to help low-income families who pay little in taxes, Vaughan said.
“When an individual family policy for decent health coverage costs about $11,000 a year, tax credits of $1,000 to $3,000 to buy insurance are almost meaningless,” he said.
Staff writer Karen Augé can be reached at 303-820-1733 or kauge@denverpost.com.
