CONSUMER GROUP LABELS BUSH HEALTH PLAN 'A TRIVIAL RESPONSE TO A SERIOUS PROBLEM'

'THE PROPOSAL OFFERS AN INEFFECTIVE PLACEBO FOR THE GROWING UN-INSURANCE EPIDEMIC'

Statement of Ron Pollack, Executive Director of Families USA:

"The plan by Governor Bush to assist the increasing number of people without health insurance is a disappointment. The Bush proposal is a trivial response to a serious problem. At best, it offers an ineffective placebo for the growing un-insurance epidemic. At worst, it is a very harmful prescription.

"At the heart of the Bush plan is a refundable tax credit of $1,000 and $2,000 for lower-income uninsured individuals and families, respectively. Although the primary reason families are uninsured is because they can't afford coverage, these tiny tax credits will do little to change that equation.

"A typical family health plan is likely to cost approximately $5,000-6,000 per year. If a family earning $30,000 per year, for example, receives the Bush ($2,000 family) tax credit, it will still be required to pay $3,000-4,000 out of pocket (not including deductibles and co-insurance) for its health coverage - an amount constituting over ten percent of its income. For lower-income families it will constitute an even larger share of their incomes. Clearly, the overwhelming majority of these families will remain uninsured.

"In addition to the ineffective tax credit, there are a number of features of the Bush plan that are likely to be harmful for low-income families. The proposal to expand medical savings accounts (MSAs) may attract healthy and wealthy families but would be harmful for people who need health care the most. As young, healthy and wealthy people sign up for MSAs, older, sicker and poorer people will be left alone in insurance pools and their premiums will become increasingly unaffordable.

"Moreover, the Bush plans calls for a 'lifting' of federal 'restrictions on state flexibility' in the State Children's Health Insurance Program (S-CHIP). Given the Governor's record of foot-dragging on children's health coverage in Texas, this very vague proposal may also turn out to be very harmful for low-income children. The most important federal requirements in effect today guarantee that children will receive much-needed -More- preventive and primary care and that premiums and cost-sharing are affordable. Lifting those federal assurances will only result in hardships for America's low-income children."

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Families USA is the national organization for health care consumers. It is nonprofit and nonpartisan and advocates for high-quality, affordable health care for all Americans.

1201 New York Avenue NW, Suite 1100 · Washington, DC 20005
202-628-3030 · Email: info@familiesusa.org · www.familiesusa.org