HEALTH ACCESS UPDATE
January 24, 2007
PRESIDENT PRESENTS HEALTH PLAN IN STATE OF THE UNION ADDRESS
- Would tax employer-sponsored health benefits for the first time in history
- Would eliminate state consumer protections against insurance companies; would take money from public hospitals
- Ranking members of House Ways and Means committee say proposal is “dead on arrival.”
Now, even President George Bush wants to join the “health reform’’ bandwagon. But rather than seek out more moderate middle ground as he navigates the new Democratic Congress, Bush swings his proposal far to the right.
In his State of the Union address Tuesday evening, Bush unveiled his health care plan, which relies on tax dedcutions to encourage the poor to buy coverage, loosening – or abandoning – consumer protections, and pilfering funds from public hospitals.
House Ways and Means Chairman Charles Rangel (D, New York) and health subcommittee Chairman Pete Stark (D, Fremont, Calif.) have already declared the measure a non-starter.
“President Bush’s proposal will make a bad problem worse. I do not intend to consider this particular health care proposal in the Ways and Means Health Subcommittee, but would be happy to meet with the President to consider alternative ideas, starting with the expansion of Medicare,’’ said Stark, a proponent of Medicare for everyone.
TAX DEDUCTIONS KEY IN PRESIDENT’S PLAN
The cornerstone of Bush’s proposal relies on changing how health coverage is taxed. It would impose a new tax on 60% of working families who now receive their benefits through work, thus discouraging the purchase of insurance in a pool where risk is spread across the larger employer group.
Bush’s plan, in turn, would give a $15,000 deduction ($7,500 for an individual) for those who buy their coverage on the more expensive and fickle individual market, where they would bear all the risk.
“Changing the tax code is a vital and necessary step to making health care affordable for more Americans,” Bush said.
Tax deductions, by design, however, favor the wealthy. U.S. Rep. Pete Stark, explains why the plan won’t work.
“The President’s so-called health care proposal won’t help the uninsured, most of whom have limited incomes and are already in low tax brackets,” said Stark. “But it will hurt middle-income Americans, whose employers will shift even more cost and risk to their employees.”
In Bush’s policy papers, the administration claims that his idea would lower health costs because most people are choosing “expensive’’ plans through employers. The President, in turn, attempts to encourage more high-deductible plans, with Health Savings Accounts. Of course, the effect of such a proposal would be to make Americans sicker, as high-deductible plans – forcing patients to delay care rather than shell out thousands in out-of-pocket costs.
OTHER ELEMENTS ALSO PROBLEMATIC
The president also resurrects a plan that failed last year. The proposal, by Sen. Mike Enzi (R, Wyoming), would have allowed businesses to band together across state lines to purchase insurance.
In order to do this, it would lower all insurance regulations to the lowest common denominator, casting away important consumer protections contained in California’s HMO Patient Bill of Rights, such as cancer screening, disease management and the right to a second opinion.
Another feature of the president’s plan would also shift money away from public hospitals – to the tune of $700 million, according to today’s Sacramento Bee.
To see an outline of the president’s proposal, click here.
The San Francisco Chronicle, today, also has an analysis of Bush’s proposals.