Bush Calls for Free-Market Fixes to the Medical System

Health-care analysts said Tuesday that the proposals in President Bush’s State of the Union address reflected a desire to improve Americans’ access to medical treatment while preserving the free-market foundation of the current system.

“I haven’t heard anything new” in the president’s proposals, said Diane Rowland, executive director of the Kaiser Commission on Medicaid and the Uninsured, a nonpartisan research institute. She said Bush’s “repackaging of older ideas” was likely a response to Americans’ concerns about rising health-care costs and their worries about losing their insurance, reflected in recent opinion polls.

“Our goal is to ensure that Americans can choose and afford private health-care coverage that best fits their individual needs,” Bush said. Specifically, he said, Congress should create refundable health-care tax credits and insurance-buying pools for small businesses; expand the tax-free health savings accounts included in the new Medicare law; and enact medical malpractice reform, he said.

And with the Democratic presidential candidates making health-care reform a central issue in their campaigns, Bush issued an adamant rejection of more government-based, comprehensive approaches.

“A government-run health-care system is the wrong prescription,” he said.

Health-care experts, along with groups ranging from the American Medical Assn. to the National Assn. of Manufacturers, credited the president for paying more attention to health-care costs and availability.

Ron Pollack, executive director of the consumer-advocacy group Families USA, said Bush’s focus on health care was “long overdue” and had come “after health-care costs and the number of uninsured Americans skyrocketed during his watch.” Since 2000, the number of Americans without health insurance has increased by almost 4 million, to 43.6 million, or 15.2% of the population, according to the Census Bureau.

Health-care industry leaders praised Bush’s approach.

“The president is on the right track in calling for a series of steps to reduce health-care costs and place health coverage within the reach of more American working families,” said Mary R. Grealy, president of the Healthcare Leadership Council.

But others said that without significant job growth, Bush’s emphasis on tax-based efforts to make health insurance more affordable would do little to help low-income Americans or those with high medical bills.

Rising health-care costs have contributed to the growing number of uninsured Americans, “but the poor performance of the economy has probably been a bigger factor,” said John Holahan, director of health policy at the Urban Institute.

“People need jobs, usually, to get health insurance,” Rowland said.

The Bush administration has predicted that a refundable tax credit would help an additional 4 million Americans buy insurance policies. The value of the credit -- up to $1,000 for individuals and $3,000 for families -- is the same as that included in Bush’s $89-billion proposal last year.

Insurance premiums, meanwhile, have increased an average of almost 14%, and family policies cost more than $9,000 a year on average. Given the growing gap between insurance premiums and wages, Holahan said, he doubted a tax credit would help many Americans buy coverage.

Bush’s only new proposal was for another benefit to the tax-free health savings accounts in the new Medicare law. He proposed allowing those with such accounts to use that money to pay their insurance premiums, making the cost of their health insurance fully tax-deductible.