Portion of the President’s State of the Union address on health care:
“Keeping America competitive requires affordable health care. (Applause.) Our government has a responsibility to provide health care for the poor and the elderly, and we are meeting that responsibility. (Applause.) For all Americans — for all Americans, we must confront the rising cost of care, strengthen the doctor-patient relationship, and help people afford the insurance coverage they need. (Applause.)
We will make wider use of electronic records and other health information technology, to help control costs and reduce dangerous medical errors. We will strengthen health savings accounts — making sure individuals and small business employees can buy insurance with the same advantages that people working for big businesses now get. (Applause.) We will do more to make this coverage portable, so workers can switch jobs without having to worry about losing their health insurance. (Applause.) “
Allan Hubbard, Assistant to the President for Economic Policy and Director, National Economic Council, and Roy Ramthun, Special Assistant to the President, National Economic Council, followed up with a special press briefing today with more details on the President’s health-care initiative. You can access the transcript of the briefing here. Excerpts from the transcript:
“Now, as you know, the President spent much of last night, when he talked about health care, talking about enhancing and improving health savings accounts. These accounts are working extremely well. We had — a million people had health savings accounts a year ago; today there are 3 million. This is an opportunity for people to have, as they say, more skin in the game. The better consumers and the frustration that we’ve heard from the people with HSAs is that they don’t have as much — they don’t have the information they need to be good consumers. And that’s why the President is going to be talking about this, and working with employers and insurance companies to encourage them to work with us to insist that providers provide this information.With respect to HSAs, what the President wants to do is level the playing field so people who buy insurance, themselves, have the same tax advantages as people who get the HSAs through employers. Right now if you buy the — literally, the same insurance policy, the same HSAs, you pay 30 percent to 50 percent more than you would if you got it through your employer. That is not fair, and the President wants to fix that. He also wants to allow people to contribute significantly more to the HSA up to their out-of-pocket max. And, finally, he wants to give employers and insurance companies the options of making HSA’s portable.
Now, you know, some people say, well, HSAs are just for the rich and the well. As it turns out, of the 3 million people who have taken up HSAs, 37 percent were previously. . . uninsured. . Forty percent earn less than $50,000 a year. So, obviously, HSAs are very attractive to people in the lower side of income scale — and for good reason, because HSAs are less expensive. And they also are a better way to control costs. The costs of HSAs went up 2 percent this past year, while the cost of regular insurance went up 7 percent.”
The briefing also talked about ERISA:
Q Could you then maybe talk a little bit more about on the portability question — what types of rule changes might need to be made, or legislative changes would need to be made to achieve this kind of portability you’re talking about?DIRECTOR HUBBARD: Absolutely. And, again, what we’re talking about is making this optional for insurance companies and for employers. But the way it would work would be for a portable HSA insurance policy to be ERISA-based, so it would not be tied to any particular state, which would allow someone to leave his or her employer, take that policy with him or her, and know that it would not be underwritten for health reasons. So you can keep that policy with you as long as you want it. And you can take it anywhere in the country.
So, again, it would make it where people would not have job lock, they would not — if they have illness in their family, they would not have to worry about leaving their job, losing their insurance and not be able to find affordable insurance. And this is good for those individuals, and it’s also good for the economy. Because what makes our economy so strong is the ability of people to move from job to job to find the best situation for them.
Q So would that require legislative change, then?
DIRECTOR HUBBARD: That definitely would require —
Q And it would be a change to the HIPAA law or the ERISA law?
DIRECTOR HUBBARD: It would be a change to — I’m going to let Roy answer that.
MR. RAMTHUN: Well, the ERISA law, which was amended by HIPAA, and there’s all kinds of things that we’re going to have to figure out those details.
Q We’ve heard a lot about leveling the playing field in terms of tax breaks, and I’m wondering if we’re giving new tax preferences to HSAs and not to other forms of insurance? Aren’t we, in effect, giving HSAs preference, and doesn’t that keep the insurance industry from sort of doing its market thing and working things out and giving consumers choice?
DIRECTOR HUBBARD: Well, we are giving the preference to HSAs. We think — but, by the way, there’s a lot of flexibility with HSAs in terms of the size of the deductible, the co-insurance provisions and other provisions. But we think HSAs are the prudent way for people to insure themselves in America, because you have catastrophic insurance and then you put into your health savings account money to deal with lower cost health care needs. So you’re absolutely right, this is a bias towards health savings accounts because it’s going to make it where individuals who buy health savings account get the tax advantage that employers get when they provide insurance.
See also this Whitehouse press release here: Affordable and Accessible Health Care.
KaiserNetwork.org has a a whole webpage here devoted to the President’s health-care initiative and more relevant links here.
An article showing negative and positive reaction to the agenda: “President’s Health Reform Agenda Draws Mixed Reviews.”