Bush's new health plan: American companies should stop paying for
employee health care  
by Caren Bohan, Reuters News Agency
Jan. 12, 2006

President George W. Bush will propose ways to rein in the surging cost
of U.S. health care this year as an important focus of his economic
strategy, a White House spokesman said on Thursday.

Trent Duffy, traveling in the Gulf Coast region with Bush, said the
president's initiative would include new tax breaks for Americans who
buy health insurance on their own.

The goal was to level the playing field between individual health
plans and insurance provided to workers by their companies, for which
employees and firms get tax deductions, he said.

The administration also wants to expand the use of health-savings
accounts, which allow workers to set aside money tax free to pay
health costs, Duffy said.

Such accounts are designed to be compatible with so-called
high-deductible health insurance plans, in which consumers assume more
out-of-pocket costs for routine medical expenses while having coverage
against catastrophic illnesses.

Duffy was confirming a report in the Wall Street Journal that Bush
would make health care cost reduction a focus in his economic agenda
for 2006.

The president alluded to his plans during a question and answer
session in Louisville, KY on Wednesday when he said: "We need a more
consumer-driven pricing mechanism in health care in order to be able
to properly deal with the inflation you're talking about."

Duffy said: "The president talked about health-care affordability as a
major challenge that we have to confront for a host of reasons."

He said the administration believed encouraging individuals to buy
health insurance would spur more competition than in the current
system, which relies heavily on employer-provided health benefits.

Duffy said one of the reasons health-insurance costs were so high was
that "third parties" -- meaning employers -- assume the bulk of the
costs so there was little incentive for consumers to shop around to
save money.

Duffy said that as part of the health costs initiative, the
administration would seek to tamp down medical malpractice lawsuits --
one of Bush's long-sought goals.

Bush's health-care steps are expected to be among the themes in his
State of the Union address later this month.

The president's effort last year to push a broad revamp of Social
Security proved unpopular and ultimately languished in Congress. The
administration had considered putting forth a broad plan to revise the
tax-code as one of its economic initiatives for this year but
officials have decided to delay that effort amid concerns it could
prove controversial too.

Among other economic initiatives Bush will press this year are his
drive to make his tax cuts permanent and an attempt to garner more
support for free trade.