Bush's Health Care Proposals Inadequate: Critics

President Bush's second proposal would provide federal funds to states to subsidize private insurance to people who earn too much to qualify for Medicaid.

Bush also called for expanding Health Savings Accounts and for helping small businesses through Association Health Plans.

The proposals came under general criticism for relying on private health insurance which, Fein said, "is, in fact, the most expensive form of insurance that we have in this country, has the highest administrative costs and gives the least money to providers."

"All this ties in with the idea that consumers are going to make important health care decisions," Fendrick added. "Allowing consumers to make their own health care spending decisions will likely save money in the short term, but the fact that people will buy less of essential medical services if left to their own decision-making may ultimately decrease health."

However, despite their reservations, observers were happy that the issue of health care reform is now firmly on the table.

"The president is responding to the fact that there are now people out there really talking about universal coverage. That's very exciting," Fein said. "He couldn't neglect putting something in the State of the Union, but to put forward a proposal that is basically unacceptable just doesn't make a lot of sense. It doesn't accomplish the goals."

More information

View the full text of the speech at the White House.

SOURCES: A. Mark Fendrick, M.D., co-director, University of Michigan Center for Value Based Insurance Design, and professor, U-M Medical School and U-M School of Public Health, Ann Arbor; Oliver Fein, M.D., professor of medicine and public health, Cornell University, and director, Physicians for a National Health Program; statement of Karen Ignagni, president and CEO, America's Health Insurance Plans; statement of Physicians for a National Health Program and California Nurses Association; Jan. 24, 2007, statement, Karen Davis, president, The Commonwealth Fund; Carol Pryor, senior policy analyst, The Access Project, Boston