Healthcare got little more than lip service (much like Katrina) in the SOTU last night, but there’s still some problems worth noting in what little Bush did say.
In the SOTU, Bush said that American has a responsibility to provide healthcare for the poor and elderly. He also made frequent calls for America to become a nation “equal in hope and rich in opportunity.” Unfortunately, his healthcare proposals will do neither for the record 48.5 million Americans who now lack insurance, particularly low-income Americans and those who already suffer from racial and ethnic disparities in access to healthcare.
Analyses by Families USA (PDF) and other groups find that HSAs do little to help the uninsured gain affordable health insurance, and will not contain healthcare costs. Moreover, they will exacerbate racial, ethnic, and socioeconomic disparities in access to and the quality of healthcare. The reasons:
– HSA tax breaks disproportionately benefit wealthy Americans. A significant proportion of uninsured Americans-disproportionately people of color, immigrants, and the working poor-don’t make enough money to pay taxes, so they would receive no benefit from the tax benefit of HSAs.
-Uninsured people typically aren’t able to save enough-after taking into account housing, transportation, food, and other costs-to cover deductible costs.
-High deductibles may prevent many people from getting care that they need if they cannot afford out-of-pocket costs, thereby increasing the risk that health problems that can be treated more cost-effectively at earlier stages will remain untreated until they are debilitating and costly.
The only thing that Bush will accomplish with his HSA program is to drive wealthy, healthy individuals out of traditional health plans with the lure of big tax breaks. Once these individuals are drawn away from traditional health insurance plans — which are designed to broadly spread risk among a large population — traditional plans would then disproportionately serve lower-income, less healthy people. This will in turn drive up premiums, limiting the ability of employers to offer healthcare to their workers, and make insurance even less affordable than it is now. (If you aren’t already, you should be following Ezra Klein’s writing on this topic, and Think Progress did an outstanding job last night of noting why HSAs are an economic loser for individuals, businesses, and the country.)
Bush also noted that HSA’s would be good for small businesses and give them the same advantages in negotiating prices as big business.
We will strengthen Health Savings Accounts – by making sure individuals and small business employees can buy insurance with the same advantages that people working for big businesses now get.
Most likely what he is referring to here are AHPs.
AHPs are touted as a way to expand health coverage while reducing costs. AHPs encourage small businesses and self-employed people to come together to purchase plans, on the theory that by coming together, these groups can leverage their size and resources to obtain better, less costlyhealth insurance products. But there are several problems with AHPs that disproportionately hurt communities of color, immigrants, and the working poor:
AHPs are not subject to state consumer protection laws or rights to appeal claim denials. These state laws protect against discrimination based on health status, require that core services must be covered, and protect against “redlining” of selected geographic areas-a practice that was not uncommon as a means of limiting minority participation in health plans.
AHPs offer less expensive coverage with fewer benefits, which, as is the case with HSAs, are more attractive to healthy and wealthy individuals,and are less likely to provide the kind of coverage that people with chronic health problems need. Because communities of color are disproportionately affected by chronic health problems such as diabetes, cardiovascular disease, and other illnesses, AHPs are less likely to provide comprehensive services to address these problems.
Rather than move us toward a nation “equal in hope and rich in opportunity,” AHPs and HSAs move America away from the opportunity principles on which this country was built. These include the belief that all Americans should enjoy a basic level of health security, and that we can best provide this security by taking care of our communities, as we take care of ourselves.
Americans need a national health insurance program that covers everyone, sharing risk equitably to include those who are healthy and have few healthcare needs, as well as those who are less healthy and who need help. Only by standing together-rather than further dividing our healthcare along racial, ethnic, and socioeconomic lines-will we ensure that all American have a fair chance to enjoy good health.
