President Proposes Entitlement Commission in State of the Union

WASHINGTON–In his State of the Union speech Tuesday night,
President Bush proposed creating a bipartisan commission to figure
out how to slow down the rapid growth of Medicare, Medicaid and
Social Security.

After acknowledging defeat of his controversial plan to reform
Social Security, Bush maintained that U.S. entitlement programs are
growing out of control and must be addressed. By 2030, he said,
spending for Social Security, Medicare and Medicaid alone will be
almost 60 percent of the entire federal budget. “And that will
present future Congresses with impossible choices–staggering tax
increases, immense deficits or deep cuts in every category of
spending,” Bush said.

The president is expected to propose additional cuts to Medicare
and Medicaid in his 2007 budget plan, which is slated for release
today.

Bush also proposed ways to control growing health care costs in
general. The president offered the expansion of health savings
accounts–which allow consumers to put aside money tax-free for
medical expenses–as one way to curb rising medical expenses. The
president proposes relaxing restrictions on the accounts, tax
credits for those who purchase HSAs and allowing employers to
contribute more to the HSAs of chronically ill employees.

Proponents say HSAs will save health care dollars because
consumers spend more wisely when they’re using their own money. But
others argue that the plans do not address the problem of the
uninsured, will erode job-based health insurance and will cause
people to forego needed care.

According to a study released last month by America’s Health
Insurance Plans, 1.03 million people were enrolled in HSAs in March
2005, up from 438,000 in September 2004.

The president suggested several other ways to curb health care
costs in his speech:
–tax deductions for people who purchase medical coverage;
–medical malpractice reform;
–expanding electronic records and other health information
technology to help control costs and reduce errors; and
–allowing small businesses to pool together to buy insurance.

But Virginia Gov. Tim Kaine, who delivered the Democratic
response to Bush’s address, said the president’s ideas will do
little to solve the growing health care crisis.

“Look at what’s happening in health care,” Kaine said.
“Skyrocketing costs are hurting small businesses and pushing
millions of working Americans into the ranks of the uninsured. The
White House has made efforts to cut Medicaid funds for our most
vulnerable citizens. Our seniors were promised that the federal
Medicare drug plan would make it easier and cheaper to obtain their
medication.

“Instead, many have fallen victim to the program’s poor
planning. They find getting their medicine to be more complex, more
expensive and less reliable. There’s a better way.”

One way some states have helped control costs is by helping
seniors to purchase prescription drugs from other countries. In
Virginia, Kaine said legislators have worked to provide health
insurance to nearly 140,000 additional children and have managed to
keep the budget balanced.