President Bush Discusses Quality, Affordable Health Care
Remarks by the President on Access to Health Care
Presidential Hall
Dwight D. Eisenhower Executive Office Building
THE PRESIDENT: Thank you for being here. Please be seated.
Thanks for coming. If you're wondering who these characters are behind
me, these are people who have just shared their stories about what it
means to be an employer or employee and facing rising costs of health
care. The cost of health care is an issue in our country, and we must
deal with it in a rational way. And that's what I want to discuss with
you today.
I want to thank those folks who are standing behind me for sharing
their stories. I will try to do my best to share some of their stories
with you. They come from all parts of our country. George Akers, for
example, is from Naples. He's here with his boss, who owns the
company, a small business entrepreneur. That would be Naples,
Florida.
Joe is from Horizon Builders in Maryland. Pam Wimbish is from
Illinois. She's self-employed. Rick Bezet is a pastor of the New Life
Church in Little Rock, Arkansas. These are people who are working for
a living, people who are employing people, people who are worried about
health care.
Phil Hadley is, as I told you, is George's boss. He's an
entrepreneur. He's a -- one of the great parts of America is the
entrepreneurs spirit of our country. The fact that small businesses
are vibrant and alive is an important part of the economic recovery of
our country. After all, most new jobs are created by small business
owners, people who are dreamers and hard workers. But Phil told me
he's worried about making sure his employees are covered by good health
care.
Lynn Martins is with us. She's a restaurant owner. She is selling
food, and at the same time, worried about whether or not the people
that are waiting the tables can get insurance.
The Sameses are with us, Krista and Ted. They're self-employed.
By the way, Kris is a home-schooler, she home-schools her children.
And they've decided to do something about the high cost of health care
by taking an innovative approach to buying health care, which I'm going
to describe to you here in a minute.
Anyway, thank you all for coming. These are -- their stories are
typical stories. Their stories are the stories that occur every day in
America, as people make decisions about how to allocate money toward
health care.
Fortunately, the positive news is that we've got the best health
care system in the world. And we need to keep it that way. We need to
keep it that way by keeping the private market strong, by resisting
efforts that are happening in Washington, D.C., to say the federal
government should be running health care. See, we don't believe that.
I don't believe it. I believe the best health care system is that
health care system generated in the private markets.
And the best way to keep the private markets strong is to make sure
we've got the best research and development; is to make sure the
doctor-patient relationship is strong; is to empower consumers to make
more choices, is to give them more opportunities to make choices in the
private sector.
We're making progress in terms of the modernization of the health
care system, starting with the Medicare bill that was passed. The
Medicare bill said we have an obligation to our seniors in our country
and we need to fulfill that obligation. And for the first time since
Medicare was founded, I had the honor of signing a bill that modernizes
the system, which essentially says there needs to be prescription drug
coverage for seniors, there needs to be preventive care available for
seniors, and seniors need to be given options to choose from, to tailor
a program that best meets their needs.
The Medicare bill is a vital part of a vibrant health care system.
I was proud to sign it, and any attempts by Congress to weaken it will
meet my veto.
One of the ways to help make sure health care functions better is
to help people who can't afford health care to have access to health
care -- access other than emergency rooms and hospitals. And so I'm a
big proponent of what's called community health centers that operate
primary care services in rural and under-served urban areas. When I
showed up here in Washington there was about 3,000 of them. I vowed
that we would expand and/or open 1,200 more. We've done 600 -- we've
met 600 -- we've fulfilled half our obligation, as far as I'm
concerned. And in the budget I'm submitting, we will finish the
additional 600 in years 2005 and 2006.
This is a smart way to make sure that people get health care. It's
more cost-effective that people are able to go to these centers and not
go to an emergency room, which is, by far, the most expensive way for
somebody to get health care.
Congress needs to pass refundable tax credits to help the working
uninsured. It's an approach that says, we trust low-income Americans
to be able to make the rational decision for their health care.
Another thing we need to do here in Washington is to promote the --
make sure health care technology is widespread, that the -- even though
medicine is modern in the sense that we're making great new
discoveries, it's kind of ancient when you think about how the records
are kept. When you're still writing records down by hand and sharing
information through files, it's not exactly a modern system. And we
believe a lot of medical errors can be saved as a result of the use of
proper technology and there will be cost savings to be had, as well.
Another way to save costs, to stop the rise of the cost of health
care, is there for to be rational laws in dealing with doctors. Our
legal system is out of control right now. There's just too much
litigation. There's frivolous and junk lawsuits all over the country.
It's like there's a giant lottery and the lawyers are the only
winners. And we're driving good docs out of business. Make no mistake
about it, a lot of good docs are stopping to practice medicine because
their premiums are going up because of the junk and frivolous
lawsuits. And so these lawsuits, which are -- people will settle just
to get them out of the way -- raises costs.
Doctors, for fear of being sued, practice what's called defensive
medicine. That raises the cost. As a matter of fact, the cost of
premium increases and the cost of defensive medicine -- in other words,
prescribing too much to cover yourself so if you get sued you can say,
well, wait a minute, I did everything I could -- costs the federal
government about $28 billion a year. Think about that -- $28 billion.
That means it's costly to the taxpayer.
I view this as a national issue that requires a national solution.
And so I proposed medical liability reform. The House passed a good
bill which recognizes that if, by the way, you get hurt, you ought to
recover full economic damages. In other words, if a bad doc practices
bad medicine, there ought to be a consequence. But there ought to be a
cap on noneconomic damages.
The House passed the bill. It's stuck in the Senate. Senators
have got to understand if they're truly worried about health care
costs, we need medical liability reform that's fair and reasonable --
fair and reasonable. We want health care to be affordable and
accessible. When you drive doctors out of business and drive the cost
up because of lawsuits, medicine becomes less affordable and less
accessible.
The Medicare bill I signed in December created an additional tool
that will help workers lower their health care costs, and they're
called "health savings accounts." They became available on January
1st. Health savings accounts address a growing need in our health care
system. These accounts will help working Americans afford health
insurance that is growing out of their reach. They will help restrain
the health care costs that are affecting us all.
Right now, many insurance plans will cover virtually all of your
health care costs, in exchange for a high-premium payment, which is
paid by employers and their employees in various percentages, in
different percentages. Under America's system of private medical care,
families will continue to have this option, of course. We just want to
provide additional options for families from which to choose, and the
health savings account is one such option.
Under the system that currently exists, consumers really don't know
how far their health care dollars are going. You pay the premium and
then you just show up and collect the benefits. You have no idea what
you're spending money on. They pay a flat rate for insurance, but they
really don't know the true costs of medical services they receive.
There's no demand for better prices. There's no selectivity in the
marketplace. There's no pressure on the price structure of health
care. When consumers don't have the incentive to get better prices,
costs go up.
And that's what's happening in America. And then when costs go up,
insurance companies pass on those costs in the form of higher premiums,
so everybody pays. That's the current system we have today. And it's
those higher premiums and increasing costs that make it difficult for
some to have health care insurance.
The doctor-patient relationship is also a vital part of a good
health care system. And as these folks behind me said, you know, they
got a little tired of having bureaucracies in between the patient and
the doc. And that's what's happened in certain segments of the health
care industry.
And we need a consumer-driven health care system. And we need
better information about health care prices. And a consumer-driven
health care system with better information will help control the cost
of health care. That's the rationale of the health savings accounts.
The best way to empower citizens is to let them save and spend
their health care dollars as they see fit. In other words, start to
empower people to make the right decisions with their health care
dollars. Give them control of a routine cost so that people see the
doctor when they need to, spend their dollars wisely, and still be able
to have coverage for major medical bills.
The health savings account incorporates the philosophy I just
described. There's two major features. First, to get a health savings
account, you or your employer must obtain a separate high-deductible
insurance policy to cover major medical expenses, such as surgery or
hospital stays. The premiums for these high-deductible plans cost far
less than traditional insurance. Yet the plans still cover for major
expenses.
Secondly -- the good news, by the way, is insurance companies are
now beginning to offer these plans more and more, along with HSAs. In
other words, the market is demanding, and the suppliers are providing,
these kinds of high-deductible catastrophic plans, I guess is the best
way to describe them. They don't cost nearly as much as normal group
plans cost.
Secondly, to cover routine medical expenses -- in other words, this
part of the -- this aspect of the health care system says, we'll cover
major costs for you at a much reduced cost to the consumer. Second, to
cover routine medical expenses, such as bills for regular doctor visits
or medicines, you can set up a health savings account with up to $2,600
a year for an individual, or up to $5,150 for a family.
Now, contributions to these accounts are tax-free. The earnings in
these accounts -- in other words, if you don't spend all the money, and
you got that money invested -- the earnings are tax-free, and when you
withdraw them to pay for routine medical expenses, the withdrawals are
tax-free. In other words, there are incentives built in for people to
put money aside to meet routine medical expenses, expenses other than
costly catastrophic expenses or high hospitalization expenses. Because
the HSA is tax-free, it will save the American -- the Americans between
10 to 35 percent of out-of-pocket medical expenses, depending on a
person's tax bracket.
Not only does the HSA start to empower you to make decisions, it
actually provides tax relief at the same time. Whatever you don't
spend, by the way, in a year -- you put $2,600 in, you don't use all
that money, that can be saved for future medical bills. In other
words, you start to save money and accumulate money. So instead of
sending all your health dollars to an insurance company, you and your
employer can use an HSA to lower your insurance premiums, to cover
major medical bills, and to keep the savings to cover routine costs,
and to save for future issues you may have to deal with.
When more Americans sign up for these HSAs we'll see positive
effects for our families and the economy this way: First, many
American families who choose HSAs will pay less overall for their
health care. People behind me, who have chosen HSAs, will testify that
that's the case. I'm going to testify on their behalf here, in a
minute. (Laughter.) Insurance premiums will be lower and people will
be able to draw from tax-free money to pay for routine expenses.
Secondly, HSAs will encourage people to spend wisely for their
routine medical expenses. If you put in $2,600 tax-free, that $2,600
is yours; and if you spend unwisely, you're spending your own money
unwisely, and you begin to see the consequences as the savings for that
particular -- or the contribution for that year begins to dwindle.
When people consider the true costs of their medical care, they will
push health care providers to offer better services and better prices.
When it's your money you're spending, you see it, you write the check,
you have the tendency to demand better service. If somebody else is
spending the money for you, there's no cost control because the demand
-- the decision-making process has been taken out of the economic
equation.
Third, HSAs will encourage people to save for their health care
needs both now and in the future. We encourage people to save for
their future retirement needs; HSAs do the same thing for medical
needs. There's incentives built in to encourage savings, and that's
important.
Fourth, because citizens will see savings on an annual basis as a
result of wise choices they make, there is an incentive to take care of
their bodies and to live healthier lives. This is the beginning of,
hopefully, what will be the next wave of medicine and the direction of
medicine, is how do we encourage people to make right choices; how do
we prevent disease in the first place?
As you know, I'm an exerciser; I like to exercise. I exercised a
little too much and my knee hurts. (Laughter.) But nevertheless, I
feel -- I made the right choice to exercise on a daily basis. I'm a
healthier person for it. And HSA -- that would show up in an HSA
because there would be more money left over on an annual basis because
I am a healthier person, more of my own money that will be
accumulating, that will be being saved. The healthier your life, the
more money you build up tax-free in your health savings account.
Fifth, HSAs will make it easier for some people who are now
uninsured to purchase health insurance. Low premiums mean greater
affordability and greater accessibility, especially for small
businesses who are having trouble paying for the health insurance for
their employees.
Because some people may not be able to afford these low-cost plans,
I made a proposal to strengthen HSAs. I did so in my State of the
Union. If your employer does not contribute to your premiums, you
should be able to deduct from your income taxes the cost of your
premiums for your high-deductible insurance. If you really think about
what I've just said, it provides an interesting opportunity for small
businesses who aren't paying for health insurance to be able to
encourage an employee to do so.
Much of the money you contribute to the HSA and the money you spend
on premiums -- so the money you contribute -- not "much," all the money
you contribute to your HSA -- and the money you spend on your premiums
for high-deductible insurance will not be taxed. This is an incentive
plan to encourage people to be able to have an insurance policy that's
affordable. And it's necessary. And it's needed. And the Congress
needs to understand how responsible the decision they made in the
Medicare bill was. I mean, this is a major reform in a positive way
for the American people.
The other thing we need to do, and Congress needs to listen to, is
the call for association health plans. (Applause.) What that means is
small businesses can bind together across the country to negotiate
lower health insurance rates and cover more workers. See, state rules
prevent many small businesses from working together to increase their
buying power, which makes it harder for them to offer affordable
coverage for their employees. It makes sense, when you think about it,
to allow people from Texas and Oklahoma to bind risk, to share risk.
If you're a restaurant owner in Texas, you ought to be able to take
your employees and put them in the same pool as a restaurant owner in
Maryland, so you can spread the risk.
You'll hear a story here in a second about a restaurant owner that
can't share risk, and, therefore, is in a -- has to buy a group plan --
or try to buy a group plan without the benefits of large purchasing
power. Big companies have got purchasing power. Small businesses
ought to be allowed to bind together so they've got the same purchasing
power.
And the Congress needs to act on association health plans. This is
an important part of making sure the small business sector of America
is strong and vibrant. The bill passed the House; it's stuck in the
Senate. The Senate ought to act. And for those of you who are
concerned about health care for -- the cost of health care for small
businesses, you need to let you senators know. There's no excuse for
this bill not to go forward. It would be a major reform. It would
help a lot of small business owners in the country.
Let me tell you some stories. Speaking about small businesses, I
told you Phil Hadley is here. He's with Collier Pest Control out of
Naples, Florida. He's got an employee with him named George Akers,
who's with us. George is the guy with the flat-top, the turtleneck --
(laughter) -- has never seen snow before. (Laughter and applause.)
He's the real deal. (Laughter.)
Collier is having trouble buying health insurance that the company
could afford, or the people could working for them. The premiums were
going up year after year. And George is getting tired of it and was
contemplating not having any insurance at all -- wanted to work, but
just was about to try to self-insure, which would be highly risky. He
bought him a new HSA. Phil found it; they worked together on it. The
HSA and the lower premiums that he pays to cover catastrophic care
saves George about $5,500 a month.
MR. AKERS: No, a year.
THE PRESIDENT: A year -- (laughter) -- $5,500 a year. I meant to
say $550 a month. Five thousand, five hundred dollars a year. Think
about that. He went from worrying about having health insurance at all
to taking a health savings account, and he now saves $550 a month.
Actually, it's more than $5,500 a year. (Laughter.) He's covered for
catastrophic care. He's got incentives in his own plan to make right
choices, to cover the routine medical costs.
Pam Wimbish is with us from the Chicago area. She's
self-employed. She was worried about health care. There's Pam. She
was really worried about health care. She had a high-cost insurance
plan and, being a self-employed person, she was kind of wondering
what's next, what happens next year or next month, when you get high
bills. There are a lot of self-employed people in America, by the way,
a lot; a lot of sole proprietors, a lot of one-person shops out there
making a huge contribution to our economy.
She signed up for an HSA. It's made a huge difference, she said.
She's saving money. She's saving money not only in the out-flow, she's
saving money by the account building up, the HSA account, which is her
savings account. It's her own money available for health. And there's
nothing like having your own -- managing your own system, is there?
I mean, there's just something inherently American about controlling
your own destiny, and that's what these HSAs do.
The Sameses are with us. I mentioned that Krista is a
home-schooler. I also forgot to tell you she's an accountant. Ted is
a doc. They're a professional family, just like a lot of other
families in America. They purchased an HSA. They're using HSAs. They
found that an HSA makes their life -- their desire to make sure their
family is insured so much more affordable and reasonable.
Rick Bezet is with us. He's a pastor in a Little Rock church. You
think -- he's got a couple of flocks he must tend to -- one is the
people who come to church, but he's also an employer, he's got people
working for him. He's saving about $5,000 per employee per year by
switching to a health savings account.
These people care deeply about their employees. They want them to
be satisfied workers. And they're now taking advantage of new law,
which provides an interesting financial opportunity for their
businesses.
Joe Bohm is with us. Joe is a home builder from Crofton,
Maryland. He's got 90 employees. Just like a lot of other small
businesses, his premiums went up 15 percent this year. And he's tired
of it. And he's tired of not having the capacity to bargain better
with a group of people just like -- in the same situation he's in. But
the law won't allow it.
There's some -- people said, why won't the law -- it sounds
rational, why won't it? Because there are some vested interests that
won't allow this to happen. I guess there are people not willing to
allow for there to be competition. They don't want to give up any
market share. They like the fact that government won't let people
compete. I don't. The more competition the better, particularly when
it comes to making sure people are able to get a better deal for their
health insurance.
Lynn Martins is with us. She runs Seibel's Restaurant. She says
it's pretty good food, if you're interested. (Laughter.) She used to
be in an association health plan in her state, Maryland. Then,
incredibly enough, they said you can't use those plans anymore. You
can't have an association health plan. And guess what happened? The
premiums went up 50 percent. Because the state wouldn't allow for
there to be association health plans, and her little stand-alone
business doesn't have the same purchasing power in the marketplace, and
the premiums went up. Bad law, bad decisions by lawmakers, ran her
premiums up. And they're still going up.
And so she, too, wants to be able to be in an association health
plan. She wants restaurateurs to be able to pool and get better costs
in the marketplace. She's also fascinated by health savings accounts.
She wasn't exactly sure what they were and then all of a sudden she
started hearing the stories of people standing behind me and it dawned
on her that this is perhaps a really good way to make sure her
employees have got health insurance.
Imagine the combination of health savings accounts and association
health care plans together. I mean, you're talking about providing
interesting opportunity for the small business sector in America. And
remember, we're interested in job creation and we need to make sure the
small business sector is as strong as possible. Tax relief is one way
to invigorate the small business sector -- Congress needs to make all
that tax relief permanent by the way. (Applause.) And another way is
to address the high cost of health care by rational policy. And today
I described a series of steps of rational policy -- the Congress must
act on it.
If they're truly interested in health care costs in America, I've
just laid out a way, a strategy for them to address the costs. Address
the costs in a way that does not undermine the private sector,
undermine that part of a health care philosophy that has made us the
greatest in the world.
We don't want the federal government running health care, we don't
want the federal government making decisions. (Applause.) Private
medicine needs to be invigorated and strengthened, and the way to do
that is give people more options, empower consumers, protect the
doctor-patient relationship, and allow small businesses to pool their
risk so they can provide good insurance for their employees.
Thank you for coming and giving me a chance to describe a vision
for a better America when it comes to health care. Please feel free to
contact the members of Congress in the Senate. (Laughter and
applause.)
Again, I want to thank my fellow Americans for standing up here to
help add some credibility to the stories I've just told you. They are
living proof of what can happen when people are given good choices to
make, and proof of what happened -- for the need for us to make sure
Congress continues to implement good policy.
Appreciate you all coming. God bless. Thank you. (Applause.)