Oval Office Meeting

President Bush expressed renewed interest in a refundable tax credit for the uninsured during an Oval Office meeting yesterday that I was privileged to attend, and he also drew the line on ?a massive expansion? of the State Children’s Health Insurance Program.

?[O]ur nation has a clear choice,? Mr. Bush said in a statement in the Roosevelt Room after the meeting. ?One option is to put more power in the hands of government by expanding federal health care programs and empowering bureaucrats to make medical decisions. The other option is to put more power in the hands of individuals, by making private health insurance more affordable and accessible and empowering people and their doctors to make the decisions that are right for them. That’s the divide.?

He sees the congressional battle over reauthorizing SCHIP as pivotal: ?This program was designed to ensure that poor children without health insurance receive the medical care they need. I support S-CHIP for that purpose.? But the president said he strongly opposes expanding ?its reach to include children from family that earn as much as $80,000 a year, as well as some adults.?

The president was emphatic in our Oval Office meeting and later in his statement before the cameras, that he will fight ?steps down the path to government-run health care for every American.

?It’s the wrong path for our nation. Government-run health care would deprive Americans of the choice and competition that comes from the private market. It would cause huge increases in government spending, which could lead to higher taxes. It would result in rationing, inefficiency and long-waiting lines. It would replace the doctor-patient relationship with dependency on people here in Washington, D.C.,? he said.

The president emphasized in his statement, as he did during the private meeting with six of us from the policy community, the importance of addressing the tax treatment of health insurance to end the bias in the tax code ??to make basic private health insurance affordable for all Americans.?

The president’s proposal for a $15,000 standard deduction for a family to purchase health insurance has not gained much traction in a Democratic Congress, and he said he recognizes that others ?believe a tax credit for health insurance would be a better way to do so.

?For example, some have proposed a tax credit of $5,000 for every family with private coverage. This would have a similar outcome as the standard deduction I proposed, and I’m open to further discussions about these two options.

?Whichever plan we choose, reforming the tax code would have a major impact on American health care. That’s what’s important for our citizens to understand. There’s a better way from expanding the government, and that is to reform the tax code,? he said.

The president praised HHS Secretary Michael Leavitt, who also attended the meeting, for his work in helping states to institute reforms that would make health insurance more affordable. ?If we want a better system, the federal government has got a responsibility to reform, and so do states. As they do so, they should ensure that help is provided to those who can least afford coverage.

?We’re at a decisive moment in the debate over health care,? the president said. ?The choices we make now will set the direction of medical care in America for years to come. I’m going to continue to work with members of both parties to look past tired, old proposals that make bigger government programs the solution to every problem.

?I’m going to continue to push for new and innovative ways to help every American afford basic private health insurance. I will continue to put my trust in the good judgment of the American people, and I’ll put my trust in the finest system of private medicine in the world.?

Secretary Leavitt and Al Hubbard, director of the National Economic Council, then held a briefing for the media, offering more details on the administration’s positions.

?[I]n the meeting today with these six experts, some of them supported the standard deduction and some of them supported the tax credit, the refundable tax credits, and there are good arguments for both. And the president made it clear in his presentation today that although he supports the standard deduction, he is open to the refundable tax credit,? Hubbard said. There was even discussion of combining the two, he said.

But the first battle is to avoid creating a huge new expansion of SCHIP. Instead, reauthorization of the program can be a platform to expand access to private health insurance, including making it easier for states to offer SCHIP as premium assistance so parents can put their kids on their own private policies.

Despite the huge number of issues the president was dealing with yesterday, including immigration reform and Senate subpoenas, he still took a big part of his day to address health care — and the importance of free-market reforms.

Three cheers!

Grace-Marie Turner

RECENT NEWS ARTICLES AND STUDIES:

  • ‘Kids’ insurance a step toward universal health care
  • The Medicare Advantage program
  • Bad medicine in the market
  • Against universal coverage
  • Who’s really ‘Sicko’
  • Doctors, retailers square off

‘KIDS’ INSURANCE A STEP TOWARD UNIVERSAL HEALTH CARE
Author: Robert Novak
Source: Chicago Sun-Times, 06/28/07

Congressional proposals to expand the State Children’s Health Insurance Program are ?the thin edge of the wedge to achieve the longtime goal of government-supplied universal health insurance and the suffocation of the private system,? writes columnist Robert Novak. Current legislation, sponsored by Sen. Hillary Clinton, would triple SCHIP’s cost from $25 billion to $75 billion and extend coverage to families at 400 percent of poverty that make as much as $82,000 a year. ?An indirect but pervasive impact of Clinton’s grand design would be the impact in the same family of children who are insured by the government while their parents are covered privately,? writes Novak. ?The overall effect would make three out of four American children accustomed to relying on government care no matter what course their parents take.?
Full text: www.suntimes.com

THE MEDICARE ADVANTAGE PROGRAM
Author: Peter R. Orszag
Source: Congressional Budget Office, 06/28/07

Peter Orszag, director of the Congressional Budget Office, provided an overview and anticipated trends for the Medicare Advantage Program in testimony today before the House Budget Committee. Enrollment in MA plans has increased over the past two years to about 18 percent of all Medicare enrollment, or 8 million beneficiaries. The CBO also ?projects that payments to Medicare Advantage plans will rise from an estimated $60 billion in calendar year 2006 to $196 billion in 2017?Much of that increase will result from growing enrollment (about 7 percent per year); the rest from increasing payments per enrollee (about 4 percent per year).? While emphasizing that this growth increases the net costs to Medicare, Orszag says that ?policymakers evaluating options for reducing payments to Medicare Advantage plans need to weigh the cost savings against benefits that the plans provide in managing care, the effect on health care costs overall, and the impact on beneficiaries.?
Full text: www.cbo.gov
CBO brief on MA plans: www.cbo.gov

BAD MEDICINE IN THE MARKET
Authors: Roger Bate and Kathryn Boateng
Source: American Enterprise Institute, 06/20/07

?Counterfeit medicines are an insidious threat to global health, and the risks they pose have been largely underestimated to date,? write Roger Bate and Kathryn Boateng of the American Enterprise Institute. ?No area of the world is unaffected, but mounting evidence shows that the problem is disproportionately severe in developing and emerging-market countries,? write the authors. For example, in some areas of Southeast Asia, Latin America, and sub-Saharan Africa, more than 30 percent of medicines are counterfeit. ?Countries have the primary responsibility — both in stopping criminal manufacturing and distribution and in protecting their citizens from counterfeit products — but multilateral organizations such as the World Health Organization (WHO) must do more to expose the problem and help countries tighten regulatory controls.?
Full text: www.aei.org

?Around 5.4 million adults — or 2.5 percent of the American adult population — have recently purchased prescription drugs from another country, such as Canada or Mexico,? according to a PhRMA survey of drug importers. About half of those who imported drugs ?did not have a doctor’s prescription for medicines they wanted,? the survey finds. Further, ?85 percent of importers have insurance with prescription drug coverage.?
Full text: www.phrma.org

AGAINST UNIVERSAL COVERAGE
Source: National Review Online, 06/21/07

Republican presidential candidates should reject the goal of universal health care coverage, write the editors of National Review Online. ?Republicans should go in a different direction, proposing market reforms that make insurance more affordable and portable,? they write. Although some people, especially the young and healthy, may choose not to buy health insurance, this will not result in higher premiums for others. ?Forcing them to get insured would, on the other hand, lead to a worse health-care system for everyone because it would necessitate so much more government intervention,? the editors conclude. ?So what should the government do about the holdouts? Leave them alone. It’s a free country.?
Full text: www.nationalreview.com

WHO’S REALLY ‘SICKO’
Author: David Gratzer
Source: The Wall Street Journal, 06/28/07

Michael Moore’s documentary SiCKO ignores evidence that ?government-run health systems have turned out to be less than utopian,? writes the Manhattan Institute’s David Gratzer. ?His grand tour of public health care systems misses the big story: While he prescribes socialism, market-oriented reforms are percolating in cities from Stockholm to Saskatoon.? In its review of the film, The New Yorker finds that Moore ?scrapes bottom in his new documentary?[he] winds up treating the audience the same way that, he says, powerful people treat the weak in America — as dopes easily satisfied with fairy tales and bland reassurances.? Moore also fails to ?interview any of the countless Americans who have been mulling over ways to reform our system,? writes The New Yorker. ?A shift to the left, or, at least, to the center, has overtaken Michael Moore, yielding an irony more striking than any he turns up: the changes in political consciousness that Moore himself has helped produce have rendered his latest film almost superfluous.?
Full text: www.opinionjournal.com
Full text of The New Yorker: www.newyorker.com

DOCTORS, RETAILERS SQUARE OFF
Author: Bruce Japsen
Source: Chicago Tribune, 06/26/07

The American Medical Association has asked for ?state and federal agencies to launch widespread investigations? into popular retail based health clinics, reports the Chicago Tribune. The AMA ?said lack of regulation at retail clinics might be fostering liability concerns, health risks and potential conflicts of interest.? But by doing this, ?medical societies would actually be taking actions that would decrease access to care by putting more regulatory hurdles and burdens on the [retail] facilities,? said Dr. Rebecca Hafner, an AMA member and medical director for MinuteClinic.
Full text: www.chicagotribune.com

But then the editors of the Chicago Sun-Times weigh in: ?Ostensibly, the opposition [to retail health clinics] is about quality control, about ensuring sound and safe treatment?But ?we have to wonder whether the medical establishment is more upset by clinics’ ‘drive-in kind of approach’ or its potential loss of business for doctors,? the Sun-Times writes. ?But any parent who has endured the difficulty of getting an appointment with the pediatrician for a screaming child’s earache, or waited anxiously during off hours for an on-call doctor to call back to authorize a visit to the emergency room for a scary tumble, will see the local retail clinic as an attractive alternative.?
Full text: www.suntimes.com

UPCOMING EVENTS:

Republican Women’s Club Meeting
National Federation of Republican Women Event
Thursday, June 28, 2007, 7:00 p.m. – 8:45 p.m.
Alexandria, VA
Grace-Marie Turner will speak about health care policy. For additional details and registration information, go to: www.nfrw.org.

Medical Malpractice Insurance Studies
American Enterprise Institute Event
Friday, June 29, 2007, 9:00 a.m. – 12:15 p.m.
Washington, DC
For additional details and registration information, go to: www.aei.org.

Beyond US boundaries: Is the US Congress sacrificing EU patient safety?
Centre for the New Europe Luncheon
Friday, June 29, 2007, 12:30 p.m. – 2:15 p.m.
Brussels, Belgium

For additional details and registration information, go to: www.cne.org.

Ideology, Issues and Impact: A Health Care Forum
California Women’s Leadership Association Event
Tuesday, July 10, 2007, 6:30 p.m. – 8:30 p.m.
San Leandro, CA

For additional details and registration information, go to: www.cwla.us.

SCHIP Expansion: Bad for Kids, Families, and Taxpayers
American Legislative Exchange Council and The Heritage Foundation Luncheon
Friday, July 13, 2007, Noon
Washington, DC

For additional details and registration information, contact Alec Aramanda at 202-608-6198 or alec.aramanda@heritage.org.

Health Policy Matters is a weekly newsletter containing summaries of timely and informative studies and articles on free-market health reform. It features research and writings by participants in the Health Policy Consensus Group, articles of interest from the health policy world, and announcements of coming events. Health Policy Matters is published by the Galen Institute, a not-for-profit public policy organization specializing in information and education on health policy. For more information about the newsletter and our organization, please visit our website at www.galen.org.

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