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Health Care Reform

Comments on the State of the Union address

Tuesday 31 January 2006

Michael F. Cannon, director of health policy studies:

"Fortunately, President Bush recognizes that price distortions created by the federal tax code are the biggest impediment to quality, affordable health care, and that health savings accounts are the best hope for removing those harmful distortions. The president’s innovative proposal to expand health savings accounts (HSAs) moves in the right direction. Increasing HSA contribution limits would help the chronically ill afford medical care, and would help all individuals save for their future medical needs. Allowing HSA holders to purchase health insurance tax-free with their HSA funds would make health insurance more portable and remove stark inequities in the tax code.

"However, the president’s HSA proposal would make April 15 even more complicated for taxpayers. In addition, the president's proposal is paternalistic in that it requires workers to purchase government-designed high-deductible health plans in order to open an HSA. Scholars on the left and the right have advocated removing this restriction, and allowing HSAs to be coupled with any type of insurance.

"Unfortunately, Mr. Bush continues to support proposals that violate the bedrock conservative, Republican principle of federalism. Federally regulated 'association health plans' and federal malpractice liability rules would move what should be state-level decisions to Congress."

Additional works:

• "A Blueprint for Health-care Freedom", by Michael F. Cannon, The Washington Times, January 26, 2006
• Healthy Competition: What's Holding Back Health Care and How to Free It, by Michael F. Cannon and Michael D. Tanner (2005)
• "Eight Reasons To Delay the Imprudent Drug Program," The Hill, November 9, 2005
• "Combining Tax Reform and Health Care Reform with Large HSAs," Cato Institute Tax & Budget Bulletin no. 23, May, 2005