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President Touts Health Care Proposals in State of the Union

BY Admin  January 20, 2004 at 11:00 PM EST

The programs the president pushed for in the speech were crafted around his belief that Americans are best served by private health coverage options and not a government-run health care system.

“On the critical issue of health care, our goal is to ensure that Americans can choose and afford private health care coverage that best fits their individual needs. To make insurance more affordable, Congress must act to address rapidly rising health care costs,” the president said in the speech.

The president aims to bring millions of uninsured into the health care system by expanding insurance tax credits and allowing small businesses to band together to buy insurance for their employees. President Bush also used the speech to advance programs that he said would cut health care costs by reducing medical errors and malpractice lawsuits.

As part of his effort to enable some of the over 43 million uninsured to purchase coverage, the president called for a tax credit system that would provide reimbursements of insurance costs for “lower-income” families.

Democrats countered that this proposal would not offer enough assistance to those struggling to pay for insurance.

“Tonight, three years into his administration, the president acknowledged that the rapidly rising cost of health care and the increasing number of Americans with no health coverage are problems,” Senate Minority Leader Tom Daschle, D-S.D., said during the Democratic response. “But the solutions he proposed — more tax cuts — are not the right ones. More tax cuts will do little to make health care more affordable or reduce the number of people without insurance, and they will weaken health coverage for those who now have it.”

President Bush also highlighted the tax-free health savings accounts established in the 2003 Medicare bill. Under that program, individuals with insurance deductibles of over $1,000, or $2,000 for couples, can save the amount of their annual deductible — up to $2,600 a year for individuals and $5,150 a year for families — and later withdraw the money to pay for health care costs. Under the plan, President Bush proposed deductions of up to 100 percent on premiums for those who purchase “catastrophic” health care insurance.

Critics of these accounts contend that they provide a tax shelter for the wealthy while threatening access to low-deductible plans for those who need more medical care.

“If health savings accounts prove popular … low-deductible insurance will gradually become more expensive or even disappear. That would hurt the low income and the sick,” Leonard Burman and Linda Blumberg of the Urban Institute wrote in November 2003.

President Bush also highlighted a plan — called Association Health Plans — to allow small businesses to cut the cost of insuring their workers by joining together and negotiating for discounts that have been available only to larger companies.