White House Summit Lauds Consumer-Driven Health Care Approach

Published February 1, 2005

President George W. Bush hosted a December White House Conference on the Economy in Washington, DC to discuss key economic issues, including the high cost of health care, the impact of lawsuit abuse, tax and regulatory burdens, and the short- and long-term financial challenges facing American workers.

The two-day conference brought together economic experts, entrepreneurs, and workers as panelists for each topic. The president himself participated in two panels and closed the conference with remarks on issues covered and progress made.

The conference “vividly demonstrated how public policy affects real people and emphasized the serious need for tax, health, and entitlement reform so America can ‘stay on the leading edge of innovation’ in a 21st century global economy,” said Grace-Marie Turner, president of the Galen Institute.

Turner was a panelist for the session titled “Making Health Care More Affordable,” chaired by departing Health and Human Services Secretary Tommy Thompson. The panel discussed the latest progress in consumer-driven health care and health savings accounts (HSAs), including the Bush administration’s plan to allow taxpayers to deduct the cost of the health insurance policy they must buy to open an HSA.

HSA Experiences Positive

At the panel session, Turner reviewed consumers’ experience so far with HSAs and health reimbursement arrangements (HRAs), noting the following:

  • Companies that have instituted consumer-directed plans have seen their health costs stop increasing, level off, and even fall when they engage employees as partners rather than adversaries in managing health care costs.
  • HSAs and other consumer-driven plans have built-in incentives for illness prevention, and early experience shows use of preventive care measures among individuals under these plans is up 25 percent or more.
  • Plans are offering new, consumer-friendly options, such as better chronic care management and nurse hotlines that parents with sick children can call to get advice that might prevent an emergency room visit in the middle of the night.

Other topics covered during the panel discussion included information technology, help for small businesses, solutions for the uninsured, and cross-state purchasing of insurance, which is currently illegal under federal law and which Bush wants to legalize.

Turner offered an example of the latter: “Right now, if you live in New Jersey, health insurance policies can cost $3,000 or more a month, largely because the state says people can wait until after they get sick to buy insurance and still pay the same premiums as others who have been paying all along. That’s like saying that you can wait to buy homeowner’s insurance [until] after your house is on fire [and get the insurance] at the same price as your neighbor who has been paying premiums for years.

“This drives up the costs,” Turner said, “as do an excessive number of [state] mandates on what the insurance must cover. Citizens have two choices: either pay the price, or do without. The president’s proposal gives them a third option: to look across state lines for a better deal.”

President Signs Up for HSA

Bush participated in two of the six conference panels and spoke extensively about health care in his closing remarks.

“There is no doubt in my mind, by passing real, substantive medical liability reform, it will help control the rising costs of health care. I believe small businesses should be allowed to join together to pool risk so they can negotiate for health care contracts just like big companies are able to do. And I’m pleased to report that … health savings accounts are beginning to work their way through our markets. After all, I just signed up for one two days ago. When it makes it to my level, you know it’s going to be widespread these days. HSAs are making a difference.”

The president highlighted an average citizen’s experience with HSAs after hearing Chris Krupinski, a mother and widow who owns an art and design studio in Fairfax, Virginia, share her story as a panelist.

“She’s pretty enthusiastic about HSAs,” said Bush. “She went to insurance agent after insurance agent after insurance agent trying to find something she could afford, and eventually she was paying $900 a month for insurance for [herself] and her family.

“Then she heard about health savings accounts, innovative ways for people to cover catastrophic care for their family and at the same time manage … their cash flow needs so they can provide primary care as well. Now she pays $340 a month for a high-deductible plan, and she puts $290 a month into her HSA–puts her own money in, money that will earn interest tax-free, money she can take out tax-free, money that’s her own money, and she’s saving money for her family at the same time.

“In other words,” the president said, “this innovative plan enables her to control her own destiny when it comes to health care, and at the same time provides her comfort in knowing that if there is a catastrophe, the health insurance will cover it for [her] and her family. She’s paying less overall, she chooses her own doctor, she saves her own money, and she makes the health care decisions.”

The president concluded his remarks about health care by saying, “Fast-rising medical costs are a drag on this economy, and so there’s some things we need to do together. One is [to] expand health savings accounts. Two, promote association health care plans. Congress needs to allow small businesses to pool risk. Three, pass medical liability reform. Four, continue to expand information technology throughout the health care system. Five, move generic drugs faster to the market.

“In all we do to reform health care,” he concluded, “we’ve got to make sure the decisions are made by doctors and patients, not by bureaucrats in our nation’s capital.”

Susan Konig ([email protected]) is managing editor of Health Care News.