STATE OF THE UNION

State Of Health Care

The U.S. health care system is not healthy and Americans are worried. In his State of the Union address last year, President Bush promised to provide Americans with "affordable health care." Yet, while the United States continues to spend more than any other country on health care, nearly 47 million Americans -- a record high -- remain uninsured. Health care costs are increasing faster than wages, and six in ten insured Americans are "worried about being able to afford the cost of their health insurance over the next few years." With the cost of health care a top concern of the American public, the President will likely address the issue in this year's State of the Union address. But rather than provide solutions that would extend affordable coverage to all Americans, Bush appears ready to re-hash his tired, unpopular proposals for expanding consumer-driven health care continue his efforts to unravel the employer-based health care system by changing the tax treatment of some employer-sponsored health benefits.

SKYROCKETING COSTS: Last year, Bush promised that his administration would "confront the rising cost of care, strengthen the doctor-patient relationship, and help people afford the insurance coverage they need." He has not lived up to his promises. Health care costs skyrocketed 87 percent over the last five years, despite wages increasing just 20 percent. Over three million fewer workers received employer-based coverage in 2005 than in 2000 and the cost of a health premium for an average family is $11,480 -- roughly equal to the salary of a full-time, minimum-wage worker. Additionally, the high costs of health care are creating larger numbers of uninsured Americans. The number of Americans without health insurance has increased by 6.8 million -- to nearly 47 million -- under the Bush administration, and the Center for Budget and Policy Priorities predicts that another 600,000 people would have lost insurance under Bush's 2007 budget proposals. Last Friday, the new Congress attempted to alleviate the high costs of prescription drugs by passing a bill requiring federal officials to negotiate for lower prices within the Medicare prescription drug program, but the President has promised to veto the measure. A November poll by the Kaiser Family Foundation found that 85 percent of Americans support prescription drug negotiations.

PAYING MORE, GETTING LESS: The United States spends more on health care per person than any other country, including countries that provide health care coverage to its entire citizenry. But the quality of our care -- and the quality of our health -- continues to lag. We have fewer practicing physicians and nurses per 1,000 people than comparable countries. Approximately 70 percent of deaths and health costs in the U.S. are attributable to chronic disease, some of which may be preventable. Yet only half of recommended preventive services are provided to adults. In his 2006 State of the Union, Bush promised to "make wider use of electronic records and other health information technology, to help control costs and reduce dangerous medical errors," but currently, just 28 percent of U.S. doctors said they use electronic medical records. (Ninety-eight percent of doctors in the Netherlands do so.) In light of the high costs and low quality of care, Americans on average die at a younger age compared to the average age of death of comparable nations. The U.S. infant mortality rate is 6.9 deaths per 1,000 live births, while Japan and Sweden have rates below 3.5 deaths per 1,000 live births. The Center for American Progress has put together a plan for a Wellness Trust, which would prioritize prevention in the U.S. health care system.

HEALTH SAVINGS ACCOUNTS NOT OFFERING SAVINGS: Last year, Bush's health care proposals in his State of the Union address focused on expanding health savings accounts (HSAs), and this year, he will likely do the same. According to the Bush administration, these special medical savings accounts will "allow people to save tax-free for health-care needs provided they choose low-cost, high-deductible coverage. The ultimate idea is to expand health-care coverage while reducing cost pressures, in part by giving people more of a financial incentive to be smart shoppers." But in reality, HSAs disproportionately benefit the wealthy. The Government Accountability Office (GAO) found "that the average income of HSA users was $133,000 in 2004, compared to $51,000 for all non-elderly tax filers." Additionally, these HSAs are being used as tax shelters for the wealthy. In 2004, the "majority of people with HSAs withdrew no funds from the accounts...and HSA participants in the focus groups that the GAO convened spoke of using their HSAs for tax sheltering purposes." Most low-income individuals "do not face high enough tax liability to benefit in a significant way from tax deductions associated with HSAs" and people "with chronic conditions, disabilities, and others with high-cost medical needs may face even greater out-of-pocket costs under HSA-qualified health plans." Multiple studies have shown that HSAs are likely to increase the number of uninsured and increase health care costs, all while costing taxpayers tens of billions of dollars.

STATE PROGRESS: Approximately 69 percent of Americans believe it is the responsibility of the federal government to provide health care to its citizens. While 2006 saw no movement toward universal health care by the Bush administration, the states made more progress and set off a national debate on health care. In 2006, Vermont and Massachusetts joined Maine in providing near universal coverage to their residents. This month, California Gov. Arnold Schwarzenegger (R-CA) proposed unveiled a $12 billion proposal to extend health coverage to the 6.5 million Californians who currently have no insurance. Schwarzenegger's proposal responded to the demands of approximately 80 percent of California voters who indicated they want the government to guarantee access to affordable health coverage for the state's residents. While some aspects of Schwarzenegger's proposal raise concerns -- particularly, whether health care will be truly affordable for lower-income Californians -- as a whole, the proposal represents a positive and exciting step in the national debate on health care reform. "I look forward to everyone now having those debates," Schwarzenegger said.