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As far as increasing patient options, Bush proposes a number of innovative ideas, many plucked from right-wing think tanks like the Heritage Foundation and the Cato Institute. Many of these initiatives focus on loosening restrictions on health insurance providers. The Bush plan would allow individuals to shop for insurance plans across state-lines; it would permit small businesses to band together to negotiate for lower premiums; it would expand the ability of individuals to buy health insurance from civic and religious organizations instead of their employer. These options may be welcome for someone who already has insurance, but are of little value to those who cannot afford it.
The centerpiece of the Bush plan expands a controversial program first included in the Prescription Drug Bill Congress passed last spring. In that sweeping piece of legislation, Congress acted on Bush's proposal to set up tax-sheltered Health Savings Accounts (HSAs) to help individuals save money for health expenditures. HSAs let participants deduct health savings from their taxable income both when they put money in and when they take it out. HSAs are helpful for people in a high tax-bracket who are looking for an extra loophole; they are useless for people with no extra money to save, or, like almost half the country, for people who pay little income tax. Now Bush wants to expand HSAs by upping the maximum annual contribution and by providing additional tax incentives for those who use them. According to the Center for Budget and Policy Priorities, HSAs constitute a back-door tax cut skewed to the wealthy that will end up costing the federal government hundreds of billions of dollars. Critics call it a tax-cut rather than a solution to the nation's health problems.
Another provision in the Bush plan offers tax incentives to individuals who purchase insurance policies that charge low monthly premiums but high deductibles every time you go to the hospital. Although modest in its impact, this proposal signals the direction Bush is headed: he wants to move towards a user-pay system, where those who use health services pay for them. Bush's proposal would be a boon for healthy individuals who rarely go to the hospital, allowing them to deduct the cost of their insurance premiums from their taxable income.
Taken in sum, Bush's proposals to expand "patient options" are great for the healthy and wealthy, but do little for the sick, the poor, and those who don't have the time and understanding to shop for insurance across state lines. Still, for those who already have access to superior health care, Bush's policies would encourage competition among providers to offer higher quality care.
What about reducing costs? Like Kerry, Bush doesn't so much reduce costs as shift them. For some constituencies, especially private insurance companies and wealthy individuals, costs could come down substantially under the Bush plan. For other constituencies, like the federal government and the poor, long-term costs will probably increase. Will American society as a whole spend more or less on health care as a result of the Bush plan? Probably about the same, although one can reasonably expect health care costs to continue to climb as advances in health technology bring more capital-intensive health products and procedures into regular use. Still, Bush has delineated specific cost-saving initiatives, as following.
His first proposal is relatively uncontroversial: Bush wants to spend money to bring modern computer and communications technology to the world of health care, one the last strongholds of paper-and-pen bureaucracy. Electronic health records would not only reduce labor costs and duplication from hospital to hospital, they would also significantly reduce the incidence of medical mistakes, which currently rank as the sixth leading cause of death in the United States.
Bush also wants to enact federal medical liability reform, which would cap the damages individuals can receive from medical malpractice suits. Such a measure would benefit the companies and doctors plagued by rising malpractice insurance costs, perhaps helping to reverse a trend of specialists forced to relocate away from areas where they are most needed. For his part, Kerry argues that such a measure would penalize the victims of the worst cases of abuse and could reduce overall safety.
Finally, Bush wants to focus on cutting the waste in Medicare and Medicaid, much of which results from fraudulent claims. At the same time, Bush would limit the ability of the states to transfer Medicaid costs to the federal government. Unsurprisingly, this move would be unpopular with the states, which have already been forced to make deep cuts in Medicaid to keep out of deficit.
Continued
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