Bush focuses on healthcare in speech

President Bush joined the national debate on universal healthcare last night with two proposals outlined in his State of the Union speech. In a previous radio address, Bush had revealed his plan to control healthcare costs by tax breaks to help low-income people buy insurance and a tax boost for employees whose health coverage costs more than average. Last night he also announced a policy to support the universal health efforts of several states. The so-called "Affordable Choices Initiative" would divert some federal money now going to hospitals and other facilities and give the money to the states. The plan would give governors more legal leeway in using Medicaid dollars if they develop smart healthcare coverage expansion strategies, moving $40 billion in disproportionate share payments away from hospitals.

Many health industry wonks are happy to see the President turn the national focus to healthcare, but Bush's plan has already drawn criticism from a number of groups. Democrats and other groups are attacking the tax deduction, which would lower taxes for 100 million citizens but raise taxes on about 30 million Americans with more expensive health plans. They also fear that employers will be less likely to provide health coverage for employees due to the tax change. And hospitals are protesting the Affordable Choices Initiative, suggesting that it could undermine their already fragile relationship with the Medicaid program and possibly push some poorer hospitals further underwater financially. Finally, the State of the Union address was important for what it didn't mention. Though the President mentioned the future financial problems Medicare and Social Security face, he didn't offer any proposal on how to deal with the problems.

For more information on the initiative:
- check out this article from the New York Times
- read the White House press release on its health proposals
- find out more about the hospital industry's lobbying efforts to block DSH program changes

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