Bush wants states to plan coverage of uninsured

With Bush expected to address concern about rising premiums and shrinking coverage tonight in his State of the Union speech, Health and Human Services Secretary Mike Leavitt offered governors greater leeway in how they use federal healthcare money for the poor if they would take the lead on offering help to the estimated 47 million now uninsured.

"The president will make clear he believes the federal government should not run healthcare," Leavitt told reporters. "He wants to partner with states." Leavitt said he expected a dozen or more states to pursue health reform efforts this year.

The Bush approach adds to a growing list of proposals for expanding medical insurance coverage and dealing with other aspects of healthcare. Like the others, it is likely to fuel the coming debate on the issue in Congress and on the campaign trail.

Hospital groups warned that the administration's proposal could undermine existing programs by redirecting federal funds. And on Capitol Hill, some leading Democrats grew more outspoken in their criticism of Bush's emerging healthcare strategy -- a sign it may not get very far in Congress.

Leavitt, in a session with reporters, outlined what he called an "affordable choices initiative," which he said was the second major piece of the administration's plan, along with a proposal to tax high-value medical insurance provided by employers to some workers.

Under the initiative, the federal government could reallocate as much as $40 billion a year that now goes to hospitals and other providers that treat large numbers of uninsured and low-income patients, he said.

Funds would instead be used to provide basic health insurance coverage for low-income people, who could then see their own doctors and perhaps avoid costly hospitalizations. "Rather than perpetually paying the bills of uninsured people, it would be better to use part of the money to help them get an insurance policy," Leavitt said.