We?re eager for word about the health care initiatives President Bush will describe in his State of the Union address on Tuesday and in his budget two weeks later. Our best guess ? and it?s only that: Certainly, he will praise Congress for passage of the Medicare bill (to a standing ovation from Republicans while most Democrats hold their applause). He?ll likely mention Health Savings Accounts, promote technology toward quality improvement (a favorite issue of HHS Secretary Thompson), and talk about initiatives to help the uninsured obtain private health insurance, possibly including larger subsidies through refundable tax credits. There?s also likely to be a bold new announcement, but the White House isn’t giving any early clues about specifics.


The growing epidemic of obesity in America has serious implications for our nation?s health, well-being, and economy. It is imperative that we understand what?s happening to us. Unless we reverse the trend, I also fear for our ability to sustain a private health insurance market when millions and millions of Americans have serious and chronic illnesses related to obesity ? especially heart disease, diabetes, and high blood pressure.

Could the controversial Atkins diet, which veers dramatically from the federal government?s low-fat dietary recommendations, hold a key to the mystery? Click here to read more.


Consumer-directed health care is dominating our speaking schedules this winter and spring, with a speech yesterday to the Minnesota Association of Health Underwriters first up for me, and many more to follow, especially for THE expert, Greg Scandlen.

Brokers in the past have been somewhat skeptical of new health insurance arrangements that couple high-deductible insurance policies with personal health spending accounts.

In other cities last year, some agents grumbled, wondering why they should get excited about selling catastrophic policies that mean lower premiums and commissions.

But things have changed, especially in the progressive state of Minnesota. They see customers demanding new options in the form of Health Savings Accounts and Health Reimbursement Arrangements, and they?re eager to learn the details and get to work selling them.

The reaction from the 400-plus person audience in St. Paul tells me that an army of agents is mobilizing to usher in the new era of consumer-driven health care.


Winter Wonderland: The city of St. Paul is rushing to complete a huge Ice Palace in time for its annual Winter Carnival and to welcome the All-Star Hockey Game later this month.

It is an astonishing architectural feat, with big blocks of ice neatly cut from nearby lakes to create a huge and beautiful building that will be 75 feet tall when it is finished. Watch for this on the news. It will be something to behold.

So we need to hope that their weather stays below freezing ? and that the Twin Cities get some snow. Believe it or not, they also are manufacturing snow in downtown St. Paul (in January!) to create the winter wonderland.

Now, I?m on to the West Coast and then back through Denver to speak next week to the American Legislative Exchange Council.

So stay warm ? everywhere but in Minnesota.

Grace-Marie Turner


? Some choose to forgo health insurance plans

? Democrats see a new urgency in health care

? State efforts to insure the uninsured: an unfinished story

? Medicare portrayal tailored by parties

? Do consumer-directed health benefits favor the young and healthy?


Author: Sally C. Pipes

Source: Investor’s Business Daily, 1/9/04

?The presidential campaign season has produced a flurry of plans to solve, forever, the problem of the uninsured. This isn?t going to happen,? writes Sally Pipes, president and CEO of the Pacific Research Institute. Demographics of the nation?s uninsured show that for many, being uninsured is a choice, ?not an affliction.? According to the Urban Institute, of the 8.5 million children under 18 who lack coverage, half are eligible for taxpayer-sponsored health insurance, like Medicaid. ?They simply haven?t taken advantage of the program or refuse to sign up,? writes Pipes. Half of the nation?s 35 million uninsured adults are under 35, and one in four is under 24. Health insurance often appears to be a bad deal to young adults because of their good health, limited income, and sense of invincibility. The two proposals put forth to solve this problem by Democratic presidential candidates John Edwards and Dennis Kucinich are ?unpalatable.? Edwards would have the government pass a mandate requiring individuals to purchase minimal health insurance, and Kucinich would increase taxes to create a government run health insurance system. Pipes concludes, ?What none of these approaches will achieve – and what no politician can offer short of instituting compulsory, government monopoly health insurance – is a total solution to the problem of the uninsured. For some, going without health insurance is simply a rational choice.?

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Author: Robin Toner

Source: The New York Times, 01/14/04

As the Iowa caucuses approach, the nine (now eight) Democratic presidential candidates have brought health care to the forefront of their campaigns, offering ?major new programs? that would expand coverage to the nation?s uninsured, writes Robin Toner in The New York Times. ?Health care experts say it is not surprising that the issue has re-emerged this year. Health spending rose 9.3 percent in 2002 ? the largest increase in 11 years,? writes Toner. A recent survey conducted by Public Opinion Strategies pollster Bill McInturff found that ?affordable health care? ranked second among voters asked to list their most important issues, below the economy and jobs and above national security and terrorism. The candidates offer varying proposals, from expansion of public programs to a government-run system, with most advocating using at least part of the money from rolling back President Bush?s tax cuts to fund their health care plans. But Emory Professor Kenneth Thorpe warns, ?Most of the leading Democratic candidates? health plans are many times more expensive than the main Bush proposal for the uninsured, an $89 billion, 10-year package of tax credits.? (Stay tuned. Those numbers could change.)

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Source: RAND Corporation

?Over the past decade, the states have been the laboratories for trying new approaches to insuring the uninsured,? says a paper by the RAND Corporation that reviews research done by economists Susan Marquis and Stephen Long. But ?the results show that states have not yet solved the problem of the uninsured.? (No surprise here since a key problem in the health sector is the federal tax treatment of health insurance.) Marquis? and Long?s key findings: Small-group regulatory reforms and health insurance purchasing alliances did not increase the number of small businesses offering insurance; public insurance subsidies do increase coverage, but more significant reductions in the uninsured would require very large subsidies; expanding public insurance may cause crowd out of private insurance, increasing the costs of public programs; expanding the health care safety net may be more effective than providing insurance for some populations.

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Author: Amy Goldstein

Source: The Washington Post, 1/11/04

?Now that Congress has enacted a Medicare prescription drug bill, Republicans and Democrats — and their allies — are pursuing aggressive campaigns to mold public opinion,? writes Amy Goldstein for The Washington Post. Goldstein gives numerous examples of the coming campaigns: FamiliesUSA is producing a film that will be narrated by liberal columnist Walter Cronkite critical of the new law that will be aired as part of a ?Medicare road show? this spring; the voter fund is spending $1.2 million on TV ads claiming that ?Bush pulled the rug out from under Medicare?; Democrat and Republican members of Congress are holding town hall meetings in their states; and the Department of Health and Human Services is distributing a letter and brochure to all Medicare recipients this month explaining the facts of the new law. ?Some Democrats acknowledge that they are actively sowing discontent,? writes Goldstein. ?[Rep. Benjamin] Cardin and other Democrats want to fuel the kind of anger that erupted among older Americans during the late 1980s after Congress added ?catastrophic? coverage to Medicare.?

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Author: Dwight McNeill

Source: Health Affairs, January/February 2004

Dwight McNeill of the Agency for Healthcare Research and Quality concludes in his latest study that “healthy” and “slightly sick” individuals will come out ahead with an MSA-like account, the “moderately” sick lose, but, surprise, the “very sick” also come out ahead financially. For his simulation, McNeill describes as “traditional” insurance a PPO or HMO plan with $0 deductible, $5-$10 copayment, and maximum out-of-pocket costs of $2,000 to $2,250. (Very, very few people have policies that generous today.) The consumer-directed plan in his simulation is a $1,000 Health Reimbursement Arrangement (HRA) with total deductibles of $1,500, $2,500, and $3,500 — higher than required for the new Health Savings Accounts. He uses the only data that is available, but as we know, HSAs are improvements over both MSAs and HRAs in the flexibility of the design and the savings incentives. The simulation also doesn’t account for the changes in behavior that are certain to occur if people actually have an incentive to regulate their use of health services because they have the potential to save money in their accounts.

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Hospital Pricing and the Uninsured

Council for Affordable Health Insurance Briefing

Thursday, Jan. 22, 2004, 10:00 – 11:30 am

2167 Rayburn House Office Building

Washington, DC

For additional details and registration information, go to:

Border Wars: The Prescription Drug Battle with Canada

Pacific Research Institute Event

Tuesday, January 27, 2004, 10:30 am ? 12:00 pm

San Francisco, CA

This panel debate will feature Dr. Milton Friedman, Congressman Gil Gutknecht, Sally C. Pipes, and Don McCanne, M.D. For additional details and registration information, go to: