Health Savings Account Blog

The American people are very, very frustrated with the health care system, for good reason," Al Hubbard, the chairman of Bush's National Economic Council, said Wednesday in an interview.

Health insurance premiums are rising faster than inflation. The number of employers offering health coverage is dropping. The ranks of the uninsured are growing. These developments explain why health care is near the top of many Americans' list of worries.

Taming health care costs and energy prices will be priorities for Bush this year, Hubbard said.

With most of Congress up for re-election in November voting that could end Republican control on Capitol Hill, Bush hopes to shift from the polarizing war in Iraq and divisive domestic issues and help his party at the ballot box.

Democrats say the president is undertaking a campaign to transfer much of the cost of health care to the consumer, which discourages people — particularly the poor — from seeking care they need.

Hubbard and other administration officials, echoing hints Bush has provided in recent speeches, sketched the outlines of the president's health care agenda to be presented in the Jan. 31 address. Most is a repeat of previous proposals that stalled in Congress or expansions of earlier measures that passed:

- Raising the dollar amount allowed to accumulate in existing health savings accounts. In these accounts, people shoulder more of the responsibility for the costs of care. They deposit money tax-free into a dedicated account while purchasing a high-deductible health savings plan to cover catastrophic expenses.

- Additional tax breaks to help people who do not have employer-provided insurance coverage buy their own.

- More portability for health insurance when people switch jobs.

- A way for people to get more information about the price of the care they get and the performance of the doctors they see.

- A switch from paper medical records to more cost-effective, error-reducing electronic records.

- The ability for small businesses to pool the purchasing of health insurance coverage across state lines.

- A cap on malpractice verdicts other than actual economic damages, something Bush has been able to get through the House three years in a row, but not the Senate.

Democrats are challenging Bush's intentions and point to the billions of dollars in proposed cuts to Medicaid, the government health program for the poor and disabled, that would allow states to increase fees on beneficiaries.

Democrats also say that focusing on providing tax advantages to individuals for a health savings account draws the healthiest and wealthiest out of traditional employer-based insurance. Left behind, they say, are the sick and the less well-off in a system that is increasingly expensive and thus eventually less available.

Hubbard said Bush's proposals arise from a belief that controlling health care costs requires choices to be driven more directly by a price-conscious, informed patient-shopper than by employers, insurers and others. The hope is that consumer demands will then drive the market into providing better and cheaper services.

"All we're doing is trying to give consumers the opportunity to be engaged in the process with a HSA plan," he said.

"It's unfair to treat people who don't have employer-provided insurance differently (in the tax code) from those who do have employer-provided insurance," Hubbard said.

"It's not fair for people who feel like they can't leave their job or they'd lose their insurance. And it's not fair not to know what the quality of the providers are and what kind of pricing they're being charged for services," Hubbard said.

Bush has run into big problems with his domestic priorities:

- His proposal to add private accounts in a major remake of Social Security, intended to be his focus in 2005, was shelved after an aggressive sales campaign yielded little support, even among Republicans.

- An effort to simplify tax laws, already pushed into 2006 by the Social Security drive, has been postponed again until 2007 to avoid a potentially explosive debate in an election year.

- Bush's desire to see a foreign guest worker program and other immigration changes is mired by divisions within his party.

Let's hope President Bush's initiatives for health savings accounts and consumer-directed health care fare better than his social security and tax break initiatives. American's deserve better than the current healthcare system.

Find more HSA Information at HSA for America.