President's State of the Union Likely to Address Health Care

James G. Kahn, MD, MPH, a professor at UCSF's Institute for Health Policy Studies and in the Department of Epidemiology and Biostatistics, will be among those tuning in to hear the President's State of the Union address on January 31. Kahn, who researches health care costs and policies, recently published a study in Health Affairs that found that billing and insurance paperwork consume at least one out of every five dollars of private insurance health spending in California. Kahn answered some questions regarding the President's policies and what he expects to hear in the address on Tuesday night. The President will deliver his fifth State of the Union address before a joint session of Congress at 6 p.m. Q: Do you expect any positive news regarding health care spending in the President's address? A: Unfortunately, I expect more bad news than good. We've had a law in the US for a few years for people to set up Health Savings Accounts (HAS). Originally, if an individual did not use all of the money that he or she put aside, it would be contributed to a shared insurance pool for those who needed it. The rules were changed in the bill that implemented the Medicare drug benefit. Now, any remaining money goes into an Individual Retirement Account, rather than remaining in the pool. I expect that the President is going to recommend that the amount of money people can put into Health Savings Accounts be increased. Q: You consider this a negative? A: For most people, yes. It's great for the individual healthy person who does not use the money set aside, but it means there is less money for people who get sick; therefore the integrity of the shared insurance pool is compromised. It gives healthy, wealthy people a tax break and added retirement income. However, by shifting money away from health care, it compromises the ability to maintain in the insurance pool for people who are sick and have no reason or ability to get an HSA plan. With higher limits on these accounts, it is an exacerbation of what is already a bad policy. Q: What about the expected proposal for tax breaks for medical spending? A: We have the same problem here. Who benefits most from tax deductions? - wealthier people. It's once again helping individuals that least need the help. At least as important, when economists have looked at tax incentives for health insurance, they conclude that it is one of the least effective ways to use federal money: the fewest people insured per federal dollar spent. It costs the government lots of money and reduces pressure on employers to pay for health insurance for employees. So, overall you are shifting expenses from employers to the federal government, which is ironic in an era when the government says it wants to stay out of people's business. Q: What would you like to see the President propose? A: Within the current system, there are a few things that could happen. It would be great to propose that employers be mandated to offer reasonable health insurance - insurance that is comprehensive and affordable for employees. Another valuable proposal would be to increase public health insurance. The Children's Health Insurance Program was very successful in getting children health coverage, stemming growth in the numbers of uninsured children, but unfortunately, this program has been cut back. Further, Medicaid (Medi-Cal) reimbursements are being cut, and the federal government is giving the states more leeway to make it harder to use Medicaid. This administration is also pushing the privatization of programs, which will cost more in administrative costs and profits for insurers. The new Medicare drug program is a great example of that. It must be administered - by law - through pharmacy benefit plans. In addition, this scattered approach has resulted in a lot of confusion, with many seniors unable to get their medications. What I'd really like to see is Presidential support for national health insurance - public funding of privately delivered care. There is ample evidence from here and Canada that this would increase system efficiency enough to allow comprehensive coverage for everyone, both healthy and sick. However, the current administration is philosophically committed to a total private sector solution - for health insurers as well as providers. Then again, remember that it was Nixon who went to China … Kahn will offer his comments and reaction after the State of the Union address for UCSF Today. Links: State of Union Puts the Squeeze on Bush, San Francisco Chronicle