President's Health Insurance Proposals Benefit Healthy and Wealthy, Undermine Employer-Sponsored Coverage
PRESIDENT'S HEALTH INSURANCE PROPOSALS BENEFIT HEALTHY AND WEALTHY, UNDERMINE EMPLOYER SPONSORED COVERAGE
Washington, D.C. - President Bush was in Connecticut today promoting the costly proposal in his FY 2007 budget to expand the use of high-deductible health insurance premiums for taxpayers with health savings accounts (HSAs), but this plan would weaken employer-sponsored health insurance coverage and not help the uninsured, according to a report from the Joint Economic Committee Democrats.
"The President seems to believe that Americans have too much health care coverage, so his
proposals would make consumers pay for all their care below a catastrophic, high-deductible limit," said Sen. Jack Reed (D-RI), Ranking Democrat on the Joint Economic Committee. "The President's plan would spend billions on tax breaks for people who can already afford health insurance, while weakening employer-sponsored insurance and likely increasing the number of uninsured. More tax subsidies for HSAs will not lower health costs for average families, improve the quality of coverage, or contain rising health care costs throughout the economy."
The Administration's "consumer-driven" health care proposals would shift more health care
costs to individuals, while creating additional tax incentives for high-deductible insurance and HSAs
that ordinary families will have little chance to use. Most uninsured lack coverage because it is not
affordable, but the Administration's low-income refundable health coverage tax credit would not be generous enough for most low-income uninsured to afford coverage. The plan would remove the tax advantage for employer-sponsored health insurance, so businesses may choose to drop coverage entirely which would likely increase the number of uninsured.
The Administration's proposal provides costly tax subsidies for those who can already afford to
pay higher out-of-pocket costs - generally the healthy and the wealthy. The Treasury Department
estimates that the cost of the Administration's proposals would be approximately $156 billion over 10 years. Because revenue losses grow overtime as funds accumulate in accounts, the costs beyond the 10-year budget window will be even higher.
http://jec.senate.gov/democrats/Documents/Releases/hsarelease05apr2006.pdf