Organizations, Experts React to Bush Health Care Plan

Published March 1, 2006

Women Impacting Public Policy (WIPP), the country’s largest entrepreneurial group for women, praised President George W. Bush’s plan for promoting flexibility and choice in the health care system.

“The President’s proposal to offer portability and tax incentives for Health Savings Accounts (HSAs) not only will assist this health care tool to get off the ground, but could revolutionize the way health care coverage is delivered,” said Barbara Kasoff, WIPP president and CEO, in a February 1 statement.

A 2005 survey of WIPP members found rising health care costs are a primary concern for women business owners. More than 70 percent identified health care as the most critical issue, and members overwhelmingly agreed association health plans (AHPs) would be the most helpful proposal for small businesses to control costs. WIPP has long been a supporter of AHPs that would allow employees and employers to cross state lines when shopping for accessible and affordable coverage.

“The idea of an insurance policy that can move from state to state with the individual and regulated at the federal level is very attractive to us,” said Kasoff. The lack of such portability “is a fundamental reason why small businesses struggle to offer health insurance to their employees,” Kasoff said.

Industry Agrees

The Association of Health Insurance Advisors (AHIA) agreed with the president that “keeping America competitive requires affordable health care.” AHIA, the health insurance division of the National Association of Insurance and Financial Advisors (NAIFA), noted in a February 1 release that the president’s address emphasized “the need to strengthen Health Savings Accounts (HSAs) to make sure individuals and small business employees have the same advantages afforded to big business employees.”

AHIA, eager to see HSAs enhanced, pointed out HSA opponents have suggested the accounts are for the wealthy only. “Our clients would disagree,” said AHIA President Debra C. Newman. “Many employer groups and individuals have switched from traditional and managed care insurance to HSAs with favorable results reported from the employees as well as the employers.”

AHIA also acknowledged a critical need to address medical liability in order to reduce costs in the health care system. “The best health care system in the world can be made more affordable through adopting these measures” added Newman. “Reformation, not replacement, is what we need,” she concluded.

Some Observers Unhappy

“The President … failed to offer a vision on health care. America faces a growing health care crisis, and he is simply repackaging old ideas,” Rep. Charles Rangel (D-NY) said in a February 1 release.

“President Bush’s speech last night should serve as a warning to more than 160 million Americans who are currently insured through their jobs. If the president pursues his expansion of Health Savings Accounts and high-deductible health plans, it will mean the end of job-based coverage, forcing millions of families to fend for themselves in the open market and pay more for insurance that may not cover their needs,” Rangel warned.

Some supporters of consumer-driven health care felt the president did not go far enough in his State of the Union remarks. “Bush missed an historic opportunity to finally bring the U.S. universal health care, appropriately consumer-based, one that holds great promise for controlling costs,” said Harvard Business School economics professor Regina Herzlinger.

The plan spelled out in January was “incomplete,” said Herzlinger.

Choice, Control Lauded

Others strongly disagreed with criticisms of the president’s proposals. “President Bush has responded to growing middle-class anxiety about the high cost of health insurance and to workers’ fears that they will lose their health coverage if they lose their jobs,” said Galen Institute President Grace-Marie Turner. “The president is offering new policy initiatives that would give people more control over their health spending and give them options to buy health insurance that is portable so they can keep it as they move to another job or even another state.”

Turner points out that of the three million enrollees in HSAs, one-third were previously uninsured. “The clear focus is to make HSAs even more attractive, allowing larger deposits to these tax-preferred accounts, tax deductibility for HSA-compatible health insurance, and tax credits to offset payroll taxes and to help low-income people get HSAs,” Turner said.

“With these new proposals, President Bush has made a strong statement that he wants to give consumers more control over their health care and the power to demand more attractive, affordable choices,” Turner concluded.

— Susan Konig