Bush health care plan gets poor prognosis in 'Bush Country'. - Waco Tribune-Herald (Waco, TX)

Byline: Cindy V. Culp

Jan. 26--Local health care officials fear President Bush's newest health care proposal wouldn't work in the heart of Bush Country.

The plan, which Bush laid out during his State of the Union address this week, is based on people getting tax deductions for buying health insurance. The president says it would make coverage more affordable for people who buy it apart from an employer and would put it within reach for millions of people who have none at all.

That may be true to an extent, local officials say. But overall, the benefits of the plan would be too small to make a dent in the national health care crisis. Depending on how the details shake out, it could even make things worse.

'There needs to be something much more comprehensive, or we'll be talking about health care for years,' said Kent Keahey, president and CEO of Providence Healthcare Network in Waco. 'We don't need another Band-Aid.'

Under the proposal, people would not pay income or payroll taxes on a portion of their income if they purchase health insurance. For individuals the amount would be $7,500, and for families it would be $15,000.

That doesn't mean taxpayers would get that amount of money from Uncle Sam. It simply means they would owe less on their tax bill, a savings they would theoretically use to help offset the cost of insurance.

People who buy insurance on their own would see the most savings, the Bush administration says, because current tax laws don't generally give them a break on medical costs. Also, about 80 percent of people who are insured through their jobs would likely benefit, government officials say, because their health plans are worth less than the deduction.

One pitfall, though, is that more than half of the uninsured don't pay taxes because their incomes are so low, said Dr. Roland Goertz, executive director of Waco's Family Health Center. So they would see zero benefit from a tax deduction.

People with slightly higher incomes might see some savings. But it wouldn't be enough to pay insurance premiums in most cases, Goertz said.

Even if the savings were enough, the math still probably wouldn't work because premiums have to be paid up front, Goertz said. Savings are not the same thing as cash flow, he said, especially for poor families.

Art Hohenberger, president and CEO of Hillcrest Health System in Waco, agrees. Insurance for his employees averages $500 a month. Most couldn't afford that by themselves, he said, which is why Hillcrest picks up a significant portion of the tab.

If low-income people don't have similar help from an employer, there is no way savings from a tax deduction will cover the expense, Hohenberger said. At best, people would be able to buy a bare-bones plan, he said.

Just as likely, Hohenberger said, people would spend the savings on other things. In either case, the end result would be the same -- people showing up at local hospitals and clinics without a means to pay for services.

That reality makes another part of the president's plan worrisome, Goertz said. It calls for federal funds that currently go to institutions that serve large numbers of the poor to be shifted to states for new insurance pools. They would cover people with low incomes and those who can't find commercial insurance because of serious health problems.

Because it's unlikely such pools would cover a significant number of the uninsured, the shifting of funds would only worsen the situation, Goertz said. In Waco, for example, both hospitals and Family Health would likely lose funds.

However, Goertz said he's optimistic such cuts won't happen. The president supported a five-year funding initiative that gave community clinics like Family Health millions of dollars to expand. It would seem strange for him to change course after such an investment, he said.

Hohenberger and Keahey are also optimistic, saying that, while Bush's proposal appears to be less than ideal, it's good that health care is back in the national discussion. Lawmakers may ultimately come up with a plan that insures more people while not hurting institutions that take care of those without coverage, they said.

'At this point, I view everything as positioning,' Keahey said. 'I am sure there will be a lot of proposals and counter-proposals. Hopefully something more comprehensive will evolve.'

THE IDEA: Making health insurance more affordable by giving tax breaks to people who buy it.

--Target group for benefits: The 17 million people who buy health insurance on their own, apart from an employer, and the 46 million who have no insurance.

--Fringe benefits: People who get insurance through their jobs could come out ahead if they have a low-cost plan.

--Collateral damage: Hospitals and clinics that serve large numbers of the poor and uninsured could lose funding, even though the plan is predicted to make insurance available only to a small percentage of the uninsured. Also, about 20 percent of people who get health insurance through their jobs will likely pay more because their plans are worth more than the tax deduction.

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Copyright (c) 2007, Waco Tribune-Herald, Texas

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