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More Criticism for President Bush's State of the Union Health Proposals

By Mary Agnes Carey, CQ HealthBeat Associate Editor

January 23, 2007 -- Groups representing hospitals, consumers, labor, and health care providers said Tuesday that President Bush's proposals to expand health care coverage would do little to help the nation's 47 million uninsured Americans afford insurance.

The president's plan, included in his State of the Union address Tuesday night, would give tax deductions of $7,500 to individuals and $15,000 to families for purchasing health insurance, no matter what the cost or type of insurance or whether it is purchased through an employer. The president also will pledge to work with state governments to expand health coverage to the uninsured, including a proposal to redirect $30 billion of federal Medicare and Medicaid disproportionate share (DSH) and capital funds to help cover the uninsured.

In a statement Tuesday, American Hospital Association President Rich Umbdenstock praised Bush for focusing on the uninsured but said his proposals "are unworkable for many and not focused on those most in need."

President Bush's tax proposal would drive people to the small group insurance market, "a market that has proven unstable" and even with a tax break remains unaffordable, Umbdenstock said.

The hospital group also opposes any plan to reduce federal DSH funding, which Umbdenstock said "pulls the rug out from under safety-net hospitals that care for some of our nation's most vulnerable people." DSH funds are given to "disproportionate share hospitals," which treat a disproportionate number of uninsured or underinsured patients.

Families USA Executive Director Ron Pollack called President Bush's health plan "flawed, and if not dead on arrival, will certainly be wounded on arrival." Pollack said the proposal is "of very limited value" because it offers a tax deduction rather than a tax credit and does not provide enough financial relief for moderate-income people to purchase health care coverage.

Henry E. Simmons, president of the National Coalition on Health Care, a coalition of business, labor, consumer, and primary provider groups, said Bush's proposals "are not nearly bold enough or broad enough to make much of a dent in the health care crisis we face."

When 47 million Americans have no health coverage and health insurance premiums have leapt up 87 percent in just the past six years, "we need stronger medicine than what the president has prescribed," Simmons said.

Len Nichols, director of the New America Foundation's Health Policy Program, said Bush's plan to redirect existing federal funds to help states provide coverage to the uninsured stops far short of what is needed. "Real federal leadership would entail a commitment to covering all Americans, explicit new federal resources, and shared responsibility to make our health care system more efficient and sustainable for us all in the long run," Nichols said.

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