In Wisconsin, Bush Touts $300B Health Care Package That Would Reform Medicare, Give Tax Credits to Uninsured

Putting more specifics on the fiscal year 2003 budget proposal he sent to Congress last week, President Bush on Feb. 11 outlined a $300 billion, 10-year health care agenda that would overhaul Medicare, expand medical savings accounts and subsidize coverage for the recently unemployed, the New York Times reports (Bumiller, New York Times, 2/12). Speaking to doctors and researchers at the Medical College of Wisconsin in Milwaukee, Bush presented his plan as a way to overhaul health care in the United States and offer patients greater choices, fewer costs and more access. "We must reform health care in America. We must build a modern, innovative, health care system that gives patients more options and fewer orders and strengthens the doctor-patient relationship," he said (Chen, Los Angeles Times, 2/12). None of the proposals Bush outlined were "entirely new," but the speech "marked his most complete explanation of the changes he envisions in the health care system," the Washington Post reports (Milbank, Washington Post, 2/12). Here is an issue-by-issue look at the agenda outlined by Bush:

• Medical Savings Accounts: Bush is seeking $14 billion over 10 years to expand tax-free medical savings accounts, which allow workers to set aside a portion of their income to pay for medical services (Los Angeles Times, 2/12). According to White House aides, the administration wants to expand current laws governing MSAs to allow all workers, not just those in small businesses, to use them; to permit lower deductibles; and to let people who use MSAs to rollover any unused funds for use in a future year or to a 401(K) retirement plan (Washington Post, 2/12).
• The Unemployed: Bush wants $15 billion to subsidize 60% of health premiums for the recently unemployed, which, according to the White House, would help 4 million workers retain coverage (Los Angeles Times, 2/12). Most people who lose their jobs can keep their health insurance under their former employers' insurance plans through COBRA -- the 1986 Consolidated Omnibus Budget Reconciliation Act, which allows unemployed workers to retain health coverage -- but they must pay 102% of the premium (Kaiser Daily Health Policy Report, 2/8).
• Medicare: Bush did not mention the $190 billion his fiscal year 2003 budget proposal seeks to overhaul Medicare and introduce a drug benefit. But he called the program "antiquated" and said that reform is necessary. "We must bring Medicare into the 21st century, to expand its coverage, to improve its services, to strengthen its financing and to give seniors more control over the health care they receive," he said (New York Times, 2/12).
• Tax Credits: Touting what he called "health credits" as a way to help the uninsured buy coverage, Bush outlined his $89 billion plan to introduce $1,000 tax credits for individuals and $3,000 for families. According to the White House, this plan would extend coverage to 6 million uninsured Americans (Los Angeles Times, 2/12).
• Purchasing Pools: Discussing another proposal aimed at reducing the number of uninsured, Bush called for the creation of "association health plans," in which small employers could pool together to purchase coverage for their workers (Washington Post, 2/12).
• Patients' Rights: Bush urged Congress to approve patients' rights legislation, indicating that he favors the bill passed by the House last year, which contains a less expansive right to sue health insurers than the Senate-passed version. "Frivolous lawsuits drive up insurance premiums for everybody and discourage employers from offering employee coverage at all. It is really important to remember that we want to help doctors to heal, not encourage lawyers to sue," he said.
• Community Clinics: Bush called for the creation of an additional 1,200 clinics over the next five years on top of the existing 3,000 clinics nationwide (Los Angeles Times, 2/12).
• Genetic Discrimination: Bush said he favors legislation barring insurers from refusing to cover an individual with a genetic disease. "Just as we addressed discrimination based on race, we must now prevent discrimination based on genetic information," he said (Gertzen/Borsuk, Milwaukee Journal Sentinel, 2/11).

Democrats Respond
Bush's proposals, especially his Medicare reform plan, drew immediate criticism from Democrats. They said the Medicare proposal, which would rely on states to administer a drug benefit for low-income seniors, does not allocate nearly enough money and is too narrow. Bush's "latest plan includes inadequate funding, only provides coverage for low-income seniors and relies on already financially strapped states to implement and pay for part of the program," Democratic National Committee Chair Terry McAuliffe said (Benedetto, USA Today, 2/12). Sen. Edward Kennedy (D-Mass.), in a statement, added, "For senior citizens, the administration's budget is just another broken promise. Its commitment to prescription drug coverage under Medicare is less than for new tax breaks, less than the Republican Congress supported last year and far less than is needed to give the elderly the protection they need" (Los Angeles Times, 2/12). Some Republicans also have said that Bush's Medicare plan does not contain enough funding. House Speaker Dennis Hastert (R-Ill.), for instance, has proposed a $300 billion, 10-year plan for a drug benefit -- the same amount as the overall funding Bush outlined for all his health care initiatives (Davies, Philadelphia Inquirer, 2/12). The White House seemed "unfazed" by the Democratic criticism, the Washington Times reports. Mark McClellan, a member of the president's Council of Economic Advisers, said, "This is an important time for action in health care, the president believes. ... It's time for Congress to act" (Sammon, Washington Times, 2/12).