With Medicare legislation enacted, the president clearly is shifting his focus to the uninsured and to the rising cost of health care, health policy experts from the Galen Institute observed.
?President Bush outlined a decidedly free-market approach to health reform in his State of the Union address,? said Grace-Marie Turner, president of the Galen Institute. ?He offered policy initiatives that would strengthen access to private health insurance and give doctors and patients more control over health care decisions.?
?The president clearly is making Health Savings Accounts (HSAs) a cornerstone of his health reform plan,? said Greg Scandlen, director of Galen?s Center for Consumer Driven Health Care. ?Of the five health policy initiatives he described, the most exciting is to allow 100% above-the-line tax deductibility of premiums for catastrophic insurance associated with Health Savings Accounts.?
HSAs were enacted in December as part of the new Medicare law, and thousands of applications already have been received by companies that began offering the new accounts on January 1. The law now allows anyone under age 65 to deposit tax-free up to $2,600 for individuals and $5,150 for families into a Health Savings Account.
But to open the accounts, consumers must also purchase a catastrophic health insurance policy. Under current law, the health insurance is not tax favored unless individuals are self-employed or unless their employer purchases the policy for them.
President Bush?s proposal would allow anyone who purchases the catastrophic policy on their own to deduct 100% of the premiums.
?Allowing full tax deductibility of premiums for catastrophic health insurance will supercharge HSAs and make them an even more attractive option for millions of Americans, including the uninsured,? Scandlen said.
The president also has renewed his commitment to providing refundable tax credits to help lower-income workers purchase health insurance. ?Millions of Americans are uninsured because they simply can?t afford a policy,? Turner said. ?Refundable tax credits will provide them with additional resources to help purchase insurance that they can own and take with them from job to job.?
?Association Health Plans (AHPs) are another important initiative,? Scandlen said. The president?s plan offers help to small businesses struggling with rising health insurance costs by enabling them to band together to get lower premiums.
?The insurance industry opposes AHPs, and the business community supports them. Current AHP legislation needs to be revisited so the concerns of both communities are addressed. They must come together to craft a compromise that will build on the president’s clear mandate,? he added. ?This will not wait. Small employers in America are desperate for relief.”
?The cost of health insurance consistently ranks at the top of Americans? list of concerns, and the president has offered important proposals to provide help without imposing destructive price controls or other heavy-handed government tactics,? Turner said. “The president’s initiatives will go a long way to ensuring that every American has access to affordable health insurance coverage,? Scandlen concluded.
For more information, contact Grace-Marie Turner (703) 299-8900 or email@example.com or Greg Scandlen (301) 606-7364 or firstname.lastname@example.org