Another Shot at the Safety Net

By Dan Froomkin
Special to
Wednesday, January 25, 2006; 12:48 PM

President Bush's last attempt to reengineer the country's social safety net didn't go so well. No amount of presidential razzle-dazzle could persuade the public to abandon Social Security as they knew it.

But now signs are that in his State of the Union address next week, Bush will be back with some more ideas. These at least initially sound much more innocuous -- what's not to like about Health Savings Accounts? -- but on closer examination they bear many of the same hallmarks of his failed Social Security bid.

Much like private Social Security accounts, Bush's health-care proposals emerge from his radical vision of what he calls an "ownership society."

"To each his (or her) own" could be the motto of that ownership society. But what is on the one hand individual empowerment is on the other an attack on collective values that are key to a society's ability to protect its weakest and most vulnerable members.

In the case of health savings accounts, in particular, the endangered principle is that of pooling risk. Expect to hear a lot more about that not-too-sexy sounding topic in the coming weeks.

Bush's Proposals

Peter G. Gosselin wrote in Monday's Los Angeles Times: "President Bush is preparing to unveil a series of proposals intended to make the nation's healthcare system more efficient, but he is likely to revive a bitter debate -- begun last year over Social Security -- about how much of life's biggest risks Americans should bear on their own.

"Although many of the proposals, such as limits on medical malpractice lawsuits, are ones the president has failed to get through Congress, he plans to unveil new initiatives as part of his vision for reshaping U.S. healthcare policy, aides and advisors said.

"Among the possible initiatives: offering additional tax breaks for the use of Health Savings Accounts, and making most out-of-pocket medical spending by individuals tax-deductible. Currently, individuals must spend 7.5% of their annual incomes on healthcare before they qualify for an income tax deduction.

"Bush's supporters say that the changes would help tame rocketing medical costs by encouraging people to buy their own healthcare insurance and become smarter shoppers, rather than relying on employers or government programs such as Medicare and Medicaid to cover their health costs."

But the plan has drawn criticism.

" 'We may be looking at the start of a fundamental shift in what we mean by health insurance, from a system where we share risks to one where it's up to individuals to make their own deals and bear their own risks,' said Drew E. Altman, president of the nonpartisan California-based Kaiser Family Foundation.

Another part of the Bush proposal: tax breaks for out-of-pocket medical expenses.

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