Washington – President Bush said Saturday he will propose changes in the tax code next week that are designed to make health insurance more affordable.
The cost of health care is growing more than two times faster than wages, making it harder for families to buy insurance and for employers to sponsor a health benefit for their workers, Bush said.
The nation must address those rising costs without raising taxes or creating a new entitlement program, he said.
One way to tackle rising premiums is to treat health insurance more like owning a home, he said.
“The current tax code encourages home ownership by allowing you to deduct the interest on your mortgage from your taxes,” Bush said. “We can provide a similar incentive for you to buy health insurance.”
The president did not provide details about exactly what tax changes he will seek. He said he would disclose more details during his State of the Union speech Tuesday.
Bush said he will also announce steps next week to support governors who are working to reduce the number of uninsured in their states. Most notably, California Gov. Arnold Schwarzenegger unveiled a plan that would cost $12 billion a year to extend health care coverage to most of the state’s 6.5 million uninsured. That would make it the second state, behind Massachusetts, to require everyone to carry insurance.
Bush said he believes the federal government has a responsibility to provide health care for the most vulnerable members of society – the elderly, disabled and poor. The country is meeting that responsibility through entitlement programs, such as Medicare, which covers the elderly and disabled, and Medicaid, which covers the very poor.
“We must strengthen these vital programs so that they are around when future generations need them,” Bush said.
Some health care groups are worried that talk about preserving the entitlement programs means the president will propose deep cuts. Hospital administrators are particularly worried about what the president’s budget will mean for their hospitals.
“His definition of preservation is that he’s going to cut costs by cutting payments,” said Chip Kahn, president of the Federation of American Hospitals.
Kahn said that reducing payments to hospitals would be inappropriate because, on average, reimbursements from Medicare already don’t cover costs.
Past efforts to trim entitlement spending haven’t lowered payments to providers. Rather, they kept payments from going up as much as they had been scheduled to go up. Providers complained the payments amounted to cuts because they didn’t keep up with inflation.
