Former Sen. John Breaux was a valuable consensus builder during his more than three decades in Congress, working with Republicans and his fellow Democrats to provide leadership in actually getting things done.

Now, after retiring last year to move into private life, he is bringing his skills to a new project he’s creating called “Ceasefire on Health Care: Finding Common Ground for the Uninsured.”

“We all watched ‘Crossfire’ on CNN where all they did was fight and argue, and that program now has been cancelled,” he said at a briefing on Capitol Hill on Wednesday. “Certainly there is a lesson there that, instead of arguing, we need to work together to bring about real change.”

Sen. Breaux’s campaign, which is supported by Pfizer and sponsored by American University’s Center for Congressional and Presidential Studies, will work to find common ground for bi-partisan legislative action on “meaningful, incremental reform” including health insurance tax credits, covering kids, community health centers, and high-risk pools.

The briefing that he chaired on Wednesday highlighted bi-partisan health care legislation, HR. 1812, that actually passed both houses of Congress this month and was signed by President Bush yesterday. It authorizes a new $25 million pilot grant program to help patients with chronic illnesses “evaluate their treatment options, enroll in clinical trials, obtain referrals and apply for financial assistance.” It will target uninsured patients in low-income and rural communities nationwide.


New Medicare IRAs? The Commonwealth Fund’s latest study on the financial security of older Americans is getting a lot of attention, mostly painting a gloomy picture of “rising out-of-pocket health costs, sluggish wage growth, and erosion of retiree health benefits.”

But one question in the survey, which was conducted last fall, is a surprise. The survey asked if people would like to have a tax-free 1% payroll deduction into a retiree health fund – sort of a private account for later health spending. The question asked:

  • “Thinking about paying for your healthcare in the future, would you be interested in having 1 percent of your (and/or your spouse’s) earnings deducted from your paycheck(s), tax free, and placed in your own Medicare account(s) to use for long term care or other expenses not covered by Medicare (when you become covered by Medicare)?”

Sixty-nine percent said they would be interested, with equally strong support among Republicans and Democrats and the wealthy and the poor. (Doesn’t this look a lot like Social Security private accounts? When you remove the politics, people like the idea of having control over their own money.)

But an article in the Health Market Survey Bulletin warns that “New Medical IRAs Could Replace HSAs.”

The article says: “The move would certainly complicate the adoption rate of HSAs, in our opinion, by draining off much of the employee contribution to HSAs since there would be no requirement for a high-deductible health plan — but the tax advantages would remain.”

I have a hard time seeing that people would think of these new accounts as competing with HSAs because workers couldn’t spend these new savings until they are on Medicare. Saving for the future isn’t going to help families with their health coverage needs during their working years so they’d still need to have other coverage arrangements, possibly HSAs. In fact, these new accounts might actually accelerate the move toward Medicare MSAs, which were authorized in the Medicare Modernization Act (but which no companies are offering to date).


And finally, we have even more sensible news from Canada. Canada’s minister has proposed changes to protect the supply of (price-controlled) prescription drugs for Canadian citizens by making it harder for Americans to import drugs over the Internet.

Health Minister Ujjal Dosanjh would require that an “established” doctor-patient relationship exist with a Canadian doctor before prescriptions can be filled.

Dosanjh also plans to offer legislation to block bulk shipments of drugs to the U.S. if shortages occur in Canada. The ban on bulk shipments is aimed at “potential American legislation legalizing the bulk import of Canadian medications,” said Dosanjh.

Drug importation is illegal, risky, and now the Canadians are fighting back by protecting their own drug supply. Kudos.


All best wishes to you as we celebrate our cherished freedom this Fourth of July.

Grace-Marie Turner


  • Testimony on H.R. 2355, the Health Care Choice Act
  • Healthcare consumers: Passive or active?
  • The most affordable cities for individuals to buy health insurance
  • ‘Worn-down’ surgeon quits NHS
  • Uncle Sam, MD
  • Making HSAs Better

Source: Subcommittee on Health, Committee on Energy and Commerce, 06/28/05

The Health Care Choice Act of 2005 (H.R. 2355), which would allow cross-state purchasing of health insurance, “could be an enormous benefit to those individuals, most of whom are uninsured, who live in the high-cost states and have no access to an affordable policy,” said Merrill Matthews, director of the Council for Affordable Health Insurance, in testimony on Wednesday before the House Subcommittee on Health. Matthews addressed the growing cost of health insurance, the role of states in regulating health insurance, and the expansion of the health insurance industry to provide consumers with new products. “We are not advocating the dissolution of state regulatory authority over health insurance. We are advocating an option and health care choices for the millions of individual Americans who are currently uninsured because they cannot afford all the services and ‘protections’ prescribed by their state,” concluded Matthews.

Also testifying were David Gratzer of the Manhattan Institute and Robert de Posada of The Latino Coalition.
Full text: energycommerce.house.gov

Source: Humana Inc., 06/28/05

Humana Inc.’s SmartSuite consumer-choice products help control medical spending, improve access to care, and produce better medical outcomes, according to a three-year actuarial study that the company released this week. “The Humana study is the largest of its kind ever completed,” Humana said, and shows that “SmartSuite customers, on average, experience sustained annualized claims trends in the 5-6% range (compared to a national health cost inflation rate of 12-14% per year during the same period).” Between 2002 and 2005, SmartSuite customers saved $32 million, representing a savings of $207 per employee.

When employees are offered a broad spectrum of plan options, “from traditional managed care to Humana’s newer CoverageFirst consumer-choice offerings, the study showed that over time, employees tended more and more to select the consumer-choice plans — where savings and consumer engagement opportunities are maximized.” The study also contradicted the idea that consumer-choice plans shift costs from employers to consumers. “The percentage of overall employee benefit costs borne by consumers stayed constant at around 21% over the life of the study, with the employer share at 79%.”
Full text: www.humana.com

Source: eHealthInsurance, 06/28/05

eHealthInsurance has released a new study ranking the largest cities in the U.S. with the most affordable health insurance options for 30-year-olds. With plans as low as $54 per month, Long Beach, CA, is the city with the most affordable health insurance for this group nationwide. Other cities ranked in the study had premiums ranging from $58 to $334 per month for an individual plan. Cities with the most affordable health insurance offered a large number of options available for individuals; the top-ranked cities have at least 66 plans available on the company’s website. “If a single, 30-year-old person living in a top-10 city were to give up buying just one latt? a day, they could use those savings to purchase health insurance and have money left over,” concludes the study.
Full text (pdf): content.ehealthinsurance.com

Author: Matt Adams, PA
Source: The Scotsman, 06/17/05

Mike Lavelle, a National Health Service consultant surgeon, “has quit the NHS after 21 years in disgust over ‘scandalous’ obstacles he claims have prevented him from doing his job,” reports The Scotsman. In a letter leaked to the press, Lavelle attacks the NHS: “For years now, I have been stopped from doing my job in the NHS by the lack of facilities, but in public the politicians?have blamed the consultants for the waiting lists. This is extremely demotivating and demoralizing.” Lavelle adds that the NHS is “grossly over-managed now?there has been an almost unbelievable increase in NHS employees who contribute nothing to the treatment of patients.” Lavelle leaves his position at the Brighton and Sussex University Hospitals Trust after two decades, writing that he had no choice but to quit. “I feel I have been worn down over the past few years, and have finally lost the fight to be allowed to do my job to the best of my ability.”
Full text: news.scotsman.com

Author: Peter J. Pitts
Source: Pharmaceutical Executive, 06/05

Putting the government in control of drug development is not in the best interests of public health, writes Peter Pitts, senior fellow at the Pacific Research Institute. Instead, “Allowing the private sector to bear both the risk and the reward for successfully developing pharmaceutical, biologic, and medical technology products has been, and remains, the most successful and efficient way to meet our public health goals,” writes Pitts. Competition among companies, both here and abroad, “ensures that, when a public health crisis is identified, there will be an available pool of talent, experience, and infrastructure to give us enhanced opportunities to successfully identify and produce cures and vaccines in an expedited time frame.” To that end, we “need to provide meaningful patent protection, coupled with financial incentives to private industry to encourage them to develop these life-saving, life-enhancing products,” concludes Pitts.
Full text (pdf): www.galen.org

Author: John C. Goodman
Source: National Center for Policy Analysis, 06/30/05

“Health Savings Accounts (HSAs) are having an enormously beneficial effect on the design of health insurance in this country?Yet despite their many advantages, HSAs can be made even better,” writes John Goodman, president of the National Center for Policy Analysis. “The current HSA law’s primary problem is that decisions the market should make have been made by the tax-writing committees of the U.S. Congress instead,” writes Goodman. He recommends allowing risk-rated deposits to HSAs as well as flexible deductibles. “Ideal reform in this country would allow unlimited contributions to HSAs and permit such accounts to wrap around third-party insurance – paying for any expense the insurance plan does not pay,” he concludes.
Full text (pdf): www.ncpa.org


Behind the Veil of a Public Health Crisis: HIV/AIDS in the Muslim World
American Enterprise Institute Event
Friday, July 8, 2005, 10:00 a.m. – 12:00 p.m.
Wohlstetter Conference Center, Twelfth Floor, AEI
1150 Seventeenth Street
Washington, DC
For additional details and registration information, go to: www.aei.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 http://www.galen.org/.

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