WHY BUSH’S HEALTHCARE
PLAN IS FAILING
More than 46 million Americans don’t have
health insurance.
To combat this growing problem,
President Bush three years ago signed the
2003 Medicare Modernization Act (MMA), the
largest Medicare expansion in the history of
the program.
The law provides tax benefits through
health savings accounts (HSAs), a discounted prescription-drug plan, and additional
subsidies extended to low-income seniors
and people with disabilities. But does the
Bush plan go far enough?
Newt Gingrich, former Speaker of the
House, says the Bush initiatives are a good
start, but they need to be expanded to provide a tax credit for small businesses, the
self-employed and the working poor so more
people can afford health insurance. Gingrich
also says that people earning more than
$75,000 should be required to have health
insurance and that the government should
allow interstate sales of insurance to foster
competition and lower prices. “We should
allow people to create large groups so they
could reduce the cost of insurance for individual purchasers, which is now too expensive because of the small risk pool involved,”
Gingrich says.
Others say the bill did little or nothing to
lower the costs of prescription drugs and that
HSAs favor high-wage earners and could discourage lower-income workers from going to
the doctor.
“This bill ended up being a big windfall for
the prescription-drug companies,” says
Amaya Smith, a spokesperson for the
Democratic National Committee. “It offers no
negotiations to lower drug prices, so it didn’t
help bring the drug prices down at all.”
Under the Bush plan, seniors pay $35 per
month for a premium plan with a $250
deductible. After the deductible is met, 75 percent of their costs up to $2,250 are covered.
However, after a participant reaches the
$2,250 threshold, he or she must pay for additional medical expenses until they reach
$5, 100. After that point, his or her medical
expenses are covered up to 95 percent. This
gap in coverage between $2,250 and $5, 100 is
expected to affect millions of low-income seniors across the nation.
The prescription-drug benefit thus far has
been a fiasco, and the communications of how
it works to the recipients largely have contributed to the mess.
Low-income recipients have beenover-charged, while others have been turned away
from pharmacies because of glitches in
confirming enrollments. As many as 20 states
have had to pay drug claims unpaid by the
federal government to allow recipients to
continue getting vital medications.
In 2005, the preventive-care feature of
the MMA went into effect, covering
aone-time initial physical-exam screening.
The MMA HSAs, which became effective
Jan. 1, 2004, allow Americans with high-deductible insurance plans to set aside up
to $4,500 annually, tax free. The plan covers
individuals with deductibles of at least
$1,000 for a single person and $2,000 for
a family.
Although unused funds accumulate in the
account and gain interest tax-free, the cap of
$4,500 annually doesn’t offset the rising
healthcare costs that Americans face. Led by
Rep. John Dingell, D-Mich., House
Democrats have proposed the “Medicare for
All Act,” which would expand Medicare coverage to those younger than 65, something
the Bush plan fails to do. —By C. Stone Brown
