CourierPostOnline

Bush Put Needed Spotlight On Health-Care Access

CourierPostOnline – Sunday, January 28, 2007

OPINION

The president's proposals are a starting point for expanding insurance coverage to all Americans.

With most Americans worried about the Iraq war, President Bush still managed to change the subject to domestic issues during his State of the Union address Tuesday.

Bush has succeeded in pushing health-care access to the top of the nation's agenda, despite serving up mostly three-year-old policy initiatives.

This should be especially good news for the 45 million uninsured people in this nation, including about 1.3 million who live in New Jersey. It also could eventually be a relief for all Americans. When the uninsured get sick, their medical expenses are usually passed on to those with health insurance or added to taxpayers' bills.

Providing health care to New Jersey's uninsured boosted health-care insurance premiums for covered state residents by $922, or $1.3 billion, in 2005, according to New Jersey Citizen Action, an advocacy organization.

Putting consumers in control

Bush's proposals would attempt to put individuals in control of buying health insurance and checking the escalating cost of medical care. Medical costs are rising twice as fast as U.S. wages, which are reflected in rapidly increasing insurance premiums.

Yet, it is questionable whether Congress will or should go along with Bush's complex combination of tax credits, grants, small-business incentives and tax penalties. Some of the initiatives, particularly the tax credits, could have the adverse outcome of encouraging more businesses to drop expensive employee health coverage and letting employees insure themselves.

Less than 60 percent of U.S. workers under age 65 are covered under employer plans, down about 5 percent from 2000. The decrease is mostly driven by rising employer premiums and employee contributions, according to a study by the Agency for Healthcare Research and Quality.

No guarantees for working poor

Most of the uninsured are the working poor who don't qualify for government programs such as Medicaid. Yet, the Bush plan might not guarantee them coverage.

The president proposes offering individuals an annual $7,500 income tax credit to cover insurance costs; families would receive a $15,000 credit.

Bush said the tax credits – in combination with grants and other assistance for low-income workers who don't qualify for Medicaid – would allow uninsured people to purchase health insurance. The plan also would encourage insured workers to opt for the lowest cost coverage and help hold down medical costs by reducing demand for services. Plans that cost more than the health credits would be taxed.

But Bush's tax credits could be meaningless for the working poor.

"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," said Karin Davis, president of The Commonwealth Fund, which studies health-care issues. So, these families would not be substantially helped, if at all, by a tax credit, Davis said.

Even if very low-income, uninsured families qualified to receive Bush's proposed $3,000 in tax-credit refunds, they probably still could not afford a policy that offers more than catastrophic coverage.

The average health-insurance policy for a family of four averages about $11,000, according to the Bush administration.

Tax cut for insured?

The people who could benefit most are individuals or families already covered by an employer's plan. They could pay less income taxes if their insurance plan costs less than the tax credit.

Some poor families might receive coverage under Bush's proposal to increase funding to safety-net programs offered in most states, such as New Jersey's FamilyCare.

This approach could expand coverage to more poor families by offering them low-cost group health coverage. Yet, it is unknown whether federal and state officials can find funding to cover all of the people eligible for such programs.

Massachusetts and Vermont expanded their health-insurance programs by requiring mid-size and large companies that do not provide affordable health-care plans to contribute to the state programs.

But Bush wants to go in the opposite direction by helping individuals and families pay for their own health care. Some federal officials, such as U.S. Rep. Charles Rangel, D-N.Y., who is House Ways and Means Committee chairman, said he fears that employers might view it as an opportunity to get rid of these costs and let workers use the tax credit to buy their own coverage. Yet, without the power of group purchase, individual policies could escalate out of reach for most families.

The task for the Bush administration and Congress is to find a way to increase the number of insured Americans, slow medical cost increases and maintain affordable coverage for the majority of workers who have insurance. It is a formidable job, which is why federal lawmakers and presidents have wrestled with the problem for decades. But if federal officials can bring more people under the insurance umbrella, fewer insured people will rely on exorbitant emergency-room services, more will get preventive care that can hold off diseases that are expensive to treat, and medical costs could start to moderate. This will help hold the line on medical insurance and make coverage more affordable for all. It is a delicate balancing act that we urge Bush and Congress to work on mastering.

ON THE WEB

To read more about President Bush's health-care initiatives, visit http://www.whitehouse.gov/infocus/healthcare/.

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