WSJ: Tax Breaks to Boost Cost Of Bush's Health Budget

Tax Breaks to Boost Cost Of Bush's Health Budget

Medicare Cuts Are Modest, But Plan Adds To Incentives For Private Savings Accounts
By SARAH LUECK
Staff Reporter of THE WALL STREET JOURNAL
February 6, 2006; Page A1

WASHINGTON -- President Bush's plan to encourage Americans to use privately administered health-savings accounts would cost the Treasury about $60 billion over five years -- roughly double what he proposes to save through another health-care initiative: trimming Medicare spending.

The disparity between those figures -- the cost of tax incentives and the Medicare savings -- underlined what is emerging as a basic tenet of the Bush administration's health-care policies: individuals can help rein in the nation's medical spending if more of their own money is on the line.

That philosophy will take concrete form today with the release of Mr. Bush's fiscal 2007 budget. The effort to scale back Medicare would reduce spending by only about 1.4% of the $2.56 trillion the Congressional Budget Office projects the program will cost over the next five years if no changes are made. Those savings would come mainly from reducing payments to hospitals and other health-care providers, as well as requiring more beneficiaries to pay higher premiums for physician services. Reducing Medicare spending on a greater scale would require even sharper cuts in payments to health-care providers or benefit reductions, both notoriously difficult to get through Congress.

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The administration would give bigger tax breaks to people who shift to health-insurance plans with high annual deductibles -- $1,050 or more, compared with the $300 to $400 common with employer-sponsored insurance. Such deductibles are required to qualify for a health-savings account, or HSA, a hybrid investment vehicle and health-care insurance plan that was created under 2003 legislation.

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If I understand it, HSA are for people who buy their own health insurance. Medicare recipients do not. So why cut their health care - more and more physicians refuse to accept Medicare patients - for something that they have no control over?

group (lets just say--those who can afford to save)--and the older people.

it does not have to make sence as long as he thinks he is saving money.