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President’s State of The Union Message: Unlikely to Address Consumers’ Real Healthcare Needs

Tuesday, January 20, 2004
Gail Shearer, (affordability) 202.238.9245
Sally Greenberg, (medical malpractice) 202.462.6262, ext. 1110
Washington, DC – Tonight’s State of the Union provides President Bush an opportunity to address the nation’s healthcare system that is failing to provide quality, affordable healthcare to all Americans. Consumers Union is deeply concerned about the ultimate impact of some of the policies the President is likely to recommend tonight and fears that many critical consumer healthcare issues could be overlooked.
● Prescription drugs. The President recently signed Medicare prescription drug legislation that fails to rein in prescription drug prices and even prohibits the federal government from negotiating discounts on behalf of seniors and the disabled. The President should provide relief for consumers by setting up a mechanism that negotiates deep prescription drug price discounts for consumers.
● The uninsured. Over 43 million Americans have no health insurance at all. In the past, the President has proposed inadequately funded tax credits for health insurance that could erode employer based coverage and shift coverage to the flawed individual market. Inadequately designed tax credits could mean higher premiums and even denied access to coverage for consumers with existing health conditions. A subsidy that covers a small portion of the premium fails to make coverage affordable to the consumers with moderate incomes. The President should abandon inadequate past policies, and commit to putting the nation on a path to universal health coverage that spreads costs fairly among the healthy and the sick, and establishes federal funding for a “healthcare for all” program as a national priority.
● The underinsured. Tens of millions of Americans face the risk of financial burden from health costs even though they have health insurance. In the past, the President has proposed expansion of medical savings accounts and health savings accounts that would expose more people to very high deductibles (e.g., $2,000 for an individual and $4,000 for a family). Expanded health savings accounts are bad for less healthy consumers because they provide them a choice between high deductibles and out-of-pocket costs or higher premiums for low-deductible coverage. They are bad for the federal budget because they provide a new tax shelter for those in high income tax brackets, eliminating taxes both when the funds are paid in and when they are withdrawn to pay for healthcare costs. The President should recognize that expanded Health Savings Accounts are both bad health policy and bad tax policy, and put forward proposals that provide affordable coverage to the healthy and sick alike
● Victims of medical malpractice. Every year, patients incur serious medical injury (e.g., loss of a limb or sight, loss of mobility, loss of fertility, excruciating pain or permanent and severe disfigurement). In the past, the President has proposed putting artificial limits on the recovery that victims of medical malpractice can get, limiting compensation to $250,000 for noneconomic damage. The General Accounting Office has concluded that many reports of providers being driven out of business by high medical malpractice rates are unsubstantiated, and that reports of premium rate increases have been exaggerated. The President should recognize that limiting compensation for noneconomic damage puts an unfair burden on some of the most severely injured victims of medical malpractice, and abandon his unfair proposal.


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