January 23, 2007


Bush wants states to plan coverage of uninsured: Critics say the proposal to give governors more leeway with federal dollars could undermine health programs (Ricardo Alonso-Zaldivar, January 23, 2007, LA Times)

President Bush's top healthcare official on Monday proposed a strategy for covering the uninsured that would offer incentives to each state to develop its own plan for expanding access, but stopped short of guaranteeing universal protection.

With Bush expected to address concern about rising premiums and shrinking coverage tonight in his State of the Union speech, Health and Human Services Secretary Mike Leavitt offered governors greater leeway in how they use federal healthcare money for the poor if they would take the lead on offering help to the estimated 47 million now uninsured.

"The president will make clear he believes the federal government should not run healthcare," Leavitt told reporters. "He wants to partner with states." Leavitt said he expected a dozen or more states to pursue health reform efforts this year.

Except that Democrats and federal bureaucrats lose control that way, Health-care plan may boost demand for HSAs (Sara Hansard, January 22, 2007, Investment News)
Bankers are salivating over the prospect that Gov. Arnold Schwarzenegger's plan to provide universal health care in California might lead to increased use of health savings accounts there.

And Democrats on Capitol Hill fear they may be correct.

California is "one of the biggest markets in the country, so this is a massive benefit," said Kevin McKechnie, staff director of the Health Savings Account Council, which is a part of the American Bankers Association in Washington.

The proposal, unveiled early this month, would require all California residents to have health insurance.To reach that goal, employers with 10 or more employees would be required to offer those employees coverage or be assessed a fee equal to 4% of payroll. Although coverage for the poorest Californians would be free, all other residents would be required to buy health coverage or be assessed a tax equal to the cost of coverage through a state-run insurance pool.

The proposal also would allow the same tax deduction on state income tax returns for a health savings account as is allowed on federal taxes.

Policyholders with high-deductible health insurance plans may set up HSAs to fund their out-of-pocket expenses. The market for HSAs, which were first allowed in 2004 under the Medicare Act of 2003, has mushroomed, with about 40% of employers now offering them, up from 7% in 2004, according to the HSA Council.

Since assets in HSAs are managed much in the manner of those in individual retirement accounts, advisers increasingly are taking an interest in HSAs.

What's the over/under on how long it takes the Right to figure out that the GOP congress they hated and the liberal George W. Bush effected the HSA revolution?

Posted by Orrin Judd at January 23, 2007 8:56 AM

OJ, I'll start the bidding at 21 January, 2009, when Hillary leads a White House backed by a Dem Congress.

What was that old song about "don't know what you got 'til its gone?"

Posted by: Brad S at January 23, 2007 9:28 AM

OJ, I'll start the bidding at 21 January, 2009, when Hillary leads a White House backed by a Dem Congress.

What was that old song about "don't know what you got 'til its gone?"

Posted by: Brad S at January 23, 2007 9:28 AM

An HSA requires being coupled with a health plan. For a group plan the premiums are adjusted each year based on the previous year's total claims. The problem is that with a small pool (10 employees) just one really sick employee can totally screw up the pool.

Posted by: Gideon at January 23, 2007 9:55 AM

Gideon: Which is why we should use the current momentum to keep pushing. ALL premiums should be payable with pre-tax dollars [whether you're self employed or not]. 2007 rules on the HSA are one step closer to making that a reality. This is the first year you can put away the maximum $5,650[family] without it being indexed to your deductible. Make the Dems, [the alleged Party of Universal Healthcare?] explain to Joe Sixpack why he still has to pay Congress' Salaries before he can pay for his medical insurance.

Posted by: JR at January 23, 2007 10:14 AM

So why do the "critics" think a detached congress can better spend an individual state's health $ better than the governor or people at the local level?

What is means is more local lobbyists and defused power, OK by me.

Posted by: Sandy P at January 23, 2007 11:41 AM

Judging by the screams in the right wing blogs before the State of Union - over/under is never.

Posted by: AWW at January 23, 2007 8:15 PM


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