Bush Proposes Expansion of HSAs
President Bush on Saturday in his weekly radio address said he plans to help reduce health care costs by pushing for an expansion of health savings accounts, Reuters/Houston Chronicle reports. In a preview of his Jan. 31 State of the Union address, Bush said, "This year, I will ask Congress to take steps to make [HSAs] more available, affordable and more portable" (Pelofsky, Reuters/Houston Chronicle, 1/21).
Under the proposal, individuals with HSAs would be allowed to increase the maximum amount they can put into their HSAs. It is not clear by how much the proposal would raise the maximum amount -- which currently is set to the amount of the deductible or a maximum set by law, whichever is lower.
This year, the deductible is at least $1,050 for an individual and $2,100 for a family, while the maximum by law is $2,700 for an individual and $5,450 for a family. The idea behind Bush's proposal is to make the accounts "a more useful savings vehicle and more palatable for people with high out-of-pocket medical spending," the Wall Street Journal reports (Lueck, Wall Street Journal, 1/21-22).
Bush also said he will push to allow small businesses to pool their risks to obtain higher discounts on health insurance. "For the sake of America's small businesses, we must ... make health care more affordable and accessible," Bush said (Reuters/Houston Chronicle, 1/21). He also called for better price disclosure for medical services and expansion of health care coverage for the uninsured.
"I decided this is a national issue that requires a national response," Bush said, adding that the government must ensure "that health care is available and affordable" (Runningen/Keil, Bloomberg/Philadelphia Inquirer, 1/22).
Senate Minority Leader Harry Reid (D-Nev.) in the Democrats' weekly radio address responded to Bush's comments by highlighting problems in the new Medicare prescription drug benefit. He said, "The state of the union today is that we have low-income Americans begging for their prescription drugs, and seniors going without any coverage" (Reuters/Houston Chronicle, 1/21). Glenn Hubbard, a former economic adviser to Bush, said he has been briefing Republican congressional leaders on the president's health care initiative, which is expected to be a focus of his 2006 domestic agenda (Bloomberg/Philadelphia Inquirer, 1/22).
Drew Altman, president and CEO of the Kaiser Family Foundation, said, "We may be looking at the start of a fundamental shift in what we mean by health insurance, from a system where we share risks to one where it's up to individuals to make their own deals and bear their own risks" (Gosselin, Los Angeles Times, 1/23).
Former Sen. John Breaux (D-La.) said, "In an election year, it's going to be very difficult" for Congress to act, adding, "What's likely to occur is incremental reforms," such as increased use of computerized medical records.
According to the Bloomberg/Inquirer, Bush's supporters are working to get "at least one element" of the initiative -- the expansion of HSAs -- passed this year (Bloomberg/Philadelphia Inquirer, 1/22).
Paul Fronstin, director of the Health Research and Education Program at the Employee Benefit Research Institute, said the HSA proposal would help those with chronic conditions who use all the money in their accounts. He added, "The other benefit is it allows you to accumulate more, faster. If you're using this account to save money for medical expenses in retirement, that would be valuable" (Wall Street Journal, 1/23).
WAMU's "The Diane Rehm Show," an NPR-syndicated program, on Monday in the second hour of the broadcast is scheduled to include an interview with Henry Aaron, senior fellow in economic studies at the Brookings Institution, and Stuart Butler, vice president for domestic and economic policy studies at the Heritage Foundation, about increased health care costs and plans Bush plans to propose to address the issue in his State of the Union address on Jan. 31 (Rehm, "The Diane Rehm Show," WAMU, 1/23). The complete segment will be available online in RealPlayer and Windows Media after the broadcast.This is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.