Bush Brings Health Savings Account Campaign to Conn.

April 6, 2006

President Bush touted health savings accounts Wednesday morning during a visit to Connecticut, which has some of the highest health insurance costs in the nation.

Bush spoke to the Business Council of Fairfield County, which last month issued a report that found the number of uninsured residents in Connecticut, about 400,000, now equals the combined populations of the state’s four largest cities.

The report says the state is facing a health care crisis and that health care is fast becoming an economic competitiveness issue.

Bush said he sees health care savings plans as a viable alternative to traditional insurance.

The plans allow people to pay for health care by setting up a tax-free savings account. They also must buy a high-deductible insurance policy for catastrophic expenses. Under the plan, someone would use the health savings account to pay at least the first $1,050 in expenses and families the first $2,100.

Any money left in the account at the end of the year, would roll over.

“Health savings accounts really mean that the individual owns and controls their health care,” Bush said. “Health savings accounts enable somebody to say, ‘Hey look, if I make the right decisions about smoking or drinking or exercising, then I’ll end up saving money.”

Bush said he wants to let people put enough money in their health savings accounts to cover all their health insurance costs, not just the deductibles as allowed now. This would allow them to set aside more money tax-free.

“It’s not the savior for all problems in health care,” said Joe Brennan, senior vice president of the Connecticut Business and Industry Association, which supported 2004 legislation that gave Connecticut consumers the right to access federally approved health savings accounts. “It just gives employers another tool in trying to find another health care option for their employees.”

State Senate Minority Leader Lou DeLuca, R-Woodbury, said he thinks the accounts will become more popular as more companies start to offer them and more people learn about them.

“I think that’s one of the reasons the president is going on this tour to make people aware of it because there are more possibilities available,” DeLuca said.

But not everyone favors health savings accounts.

“They may be a good idea for a narrow set of people who are healthy and who are lucky enough to stay that way and have thousands of dollars in the bank they can use for health care,” said Ellen Andrews, executive director of the Connecticut Health Policy Project, a nonprofit research group based in New Haven.

She said deductibles and fees are too high for most low-income residents.

“It’ll look cheaper to consumers, but they just won’t understand that they’ve got this huge deductible until they get sick,” she said. “A lot of people may end up not understanding and not prepared.”

About 200 people gathered in Bridgeport to protest the president’s plan.

John Olsen, the head of the state’s AFL-CIO, said working people in Connecticut can’t afford to set aside hundreds of dollars in a savings account to pay for health care.

“We can’t save anything as it is,” he said. “We are the only industrialized nation in the world that does not have a nationalized health care system.”

According to the business council report, Connecticut was the sixth-most expensive state for health insurance, with premiums for family coverage costing $10,119 in 2003, the report found.

From 2003 to 2004, 50,000 more people became uninsured in Connecticut, a 14 percent increase compared with a 2 percent increase nationally. That brought the total uninsured to 407,000, about the same as the populations of Bridgeport, Hartford, New Haven and New London combined.

Connecticut ranks 12th nationwide with 11.6 percent of the population uninsured, less than the national average of 15.7 percent.

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