Editorial: Health vision a blur for poor

Tuesday, Jan. 31, 2006 | 9:19 a.m.

In his State of the Union address tonight, President Bush is expected to ask the country to trust his "consumer-driven" vision for the future of health care. Not surprisingly, his vision focuses on wealthy people and businesses, with middle-class and poor people seen only peripherally.

Under Bush's plan, the days of reasonably priced group insurance largely funded by employers and the federal government (through in- come-tax deductions for employer premiums) will fade and be replaced by individual policies.

This trend has already begun under the Bush administration, with employees able to place limited, tax-exempt payroll deductions into health savings accounts for themselves and their families. Some employers contribute to these plans, others do not. In either case, the cost of routine medical expenses shifts from employer-based insurance plans to the employee's own pocket.

Bush envisions a huge expansion of this concept. A 2005 law signed by the president and passed by the Republican-controlled Congress provides for insurance carrying a high deductible, of up to $10,000. This insurance is less expensive, as it does not kick in until the insured person first pays the entire amount of the deductible.

In the future, as Bush sees it, workers would have both a health savings plan for routine medical expenses and a high-deductible, private insurance policy for unforeseen, costly medical procedures. The plan favors higher-income workers, as they would be able to place the maximum contribution in their health accounts, thus getting a better tax break, and they could more easily afford to pay the deductible in the event of a major illness or injury.

Workers earning average and low incomes would likely not be able to afford high payroll deductions and would be hard-pressed to pay the deductible. With limited health savings plans, and impossibly high deductibles, many people would forgo preventive care, increasing the chances of them incurring sickness and turning to taxpayer-funded public hospitals.

In the short term, lower-income employees would be saddled with increased premiums as higher-income employees left the employer-based group plan for the individualized coverages. In the long term, employer-based plans would be phased out. What 401(k) plans are doing to company pension plans, Bush's vision would do to company health care plans. Workers would be largely on their own, paying a lot more for an essential benefit than they ever had to under a group plan.

Health insurance works best when people who are healthy, wealthy, poor and sick all pool their premiums, keeping prices reasonable for all. In our view, what is needed is a plan to cover more of the 46 million Americans who lack health insurance -- not a plan to pass the buck.