By Amanda Gardner
HealthDay Reporter
Wednesday, January 24, 2007
WEDNESDAY, Jan. 24 (HealthDay News) — President George Bush’s proposals on fixing the nation’s health insurance woes, outlined in Tuesday’s State of the Union speech, just don’t go far enough to solve the problem, many observers said.
“It’s just totally inadequate at addressing any of the fundamental issues,” said Dr. Oliver Fein, professor of medicine and public health at Cornell University and director of Physicians for a National Health Program. “Let’s deal with the question of does this have anything to do with universal coverage.”
Fein’s organization, along with the California Nurses Association, called the proposal “feeble.”
“The basic premise is increasing the marketability of health insurance, including changing the tax structure,” added Dr. A. Mark Fendrick, co-director of the University of Michigan’s Center for Value Based Insurance Design and a professor in the university’s medical school and School of Public Health. “But in expanding health insurance, we must address the issue of cost containment. That’s the larger issue. None of the proposals at hand basically say how we’re going to deal with cost growth.”
Others, however, were less critical of the proposal. In a prepared statement, Karen Ignagni, president and CEO of America’s Health Insurance Plans, said that “enacting common-sense tax incentives for individuals will go a long way toward helping millions secure and maintain the coverage they need. This plan also recognizes that states are an essential partner in any program to cover the uninsured.”
The proposal, unveiled in the president’s speech Tuesday night, was two-pronged and intended, Bush said, to “help more Americans afford their own insurance.”
The first component was a standard tax deduction for health insurance of $15,000 for families and $7,500 for single Americans, regardless of whether they buy their own health insurance or get it through work. According to the president, this reform would mean that 100 million Americans would benefit from lower tax bills, and it would put private health insurance plans within the reach of uninsured Americans.
However, “the administration estimates that 3 to 5 million people will benefit from this proposal,” Fein pointed out. “We’ve got 46.6 million uninsured. That’s going to leave 42 or 43 million still uninsured. This is not a real step toward universal coverage in any way shape or form.”
“And, as I read the proposal, it essentially will benefit people who have high incomes,” Fein continued. “This isn’t very beneficial for people who have low incomes.”
Karen Davis, president of The Commonwealth Fund, which focuses on research in health care issues, agreed with that assessment.
“About 95 percent of the uninsured would not benefit substantially from the tax deductions,” she said in a statement published Wednesday. According to Davis, one Commonwealth Fund report found that “more than 55 percent of the uninsured have such low incomes that they pay no taxes, while another 40 percent are in the 10 to 15 percent tax bracket.” Therefore, the proposed help in the form of tax breaks would not reach this population, she said.
Carol Pryor, a senior policy analyst at The Access Project, a Boston-based group that advocates access to health care, said, “Mr. Bush’s proposal is aimed at leaving more people on their own in the private sector to purchase insurance. And there’s a lot of research that shows that people in that market are likely to have higher deductibles and spend a greater percentage of their income on medical expenses and be less satisfied with their plans. So this proposal would shift more of the costs to consumers by forcing them into coverage with less comprehensive policies and it wouldn’t protect people that it claimed to protect.”
President Bush’s second proposal would provide federal funds to states to subsidize private insurance to people who earn too much to qualify for Medicaid.
Bush also called for expanding Health Savings Accounts and for helping small businesses through Association Health Plans.
The proposals came under general criticism for relying on private health insurance which, Fein said, “is, in fact, the most expensive form of insurance that we have in this country, has the highest administrative costs and gives the least money to providers.”
“All this ties in with the idea that consumers are going to make important health care decisions,” Fendrick added. “Allowing consumers to make their own health care spending decisions will likely save money in the short term, but the fact that people will buy less of essential medical services if left to their own decision-making may ultimately decrease health.”
However, despite their reservations, observers were happy that the issue of health care reform is now firmly on the table.
“The president is responding to the fact that there are now people out there really talking about universal coverage. That’s very exciting,” Fein said. “He couldn’t neglect putting something in the State of the Union, but to put forward a proposal that is basically unacceptable just doesn’t make a lot of sense. It doesn’t accomplish the goals.”
SOURCES: A. Mark Fendrick, M.D., co-director, University of Michigan Center for Value Based Insurance Design, and professor, U-M Medical School and U-M School of Public Health, Ann Arbor; Oliver Fein, M.D., professor of medicine and public health, Cornell University, and director, Physicians for a National Health Program; statement of Karen Ignagni, president and CEO, America’s Health Insurance Plans; statement of Physicians for a National Health Program and California Nurses Association; Jan. 24, 2007, statement, Karen Davis, president, The Commonwealth Fund; Carol Pryor, senior policy analyst, The Access Project, Boston
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