Before the president's State of the Union Address, there was a lot of buzz in Washington that he would have to offer something new on health care policy, given rising health care costs, the rising numbers of uninsured Americans, the struggles of the states to maintain coverage for low-income families and children, and the strong backlash against the administration's new Medicare prescription drug benefit.

There wasn't much, and certainly wasn't much new, about health care policy in the president's speech, or in the budget he released soon afterwards. But as David Kendall explains in an important new report from the Progressive Policy Institute, the administration's health care agenda is increasingly characterized by an atavistic effort to turn back the clock to those days when most Americans paid for health costs out of their own pocket, or bought individual insurance policies. And that's really bad news for all Americans, especially those who suffer from chronic health conditions or limited personal budgets.

"The administration's attempts to encourage Americans to shift from group coverage to individually purchased health insurance," says Kendall, "favors the fittest among us at the expense of the sickest. By undermining the risk-pooling benefits of group coverage, it could create the worst of all possible worlds -- a Darwinian health care system that is even less equitable than the current system without being more efficient."

The Bush agenda takes one valid premise -- that giving people more responsibility for their own health can make them more cost-conscious in purchasing health services -- and turns it into a rigid and destructive ideological drive to undermine all sorts of risk-spreading arrangements, especially the employer-based group insurance policies that cover most middle-class Americans.

Kendall's report goes through the administration's health care agenda point by point and exposes this underlying philosophy of Darwinian individualism.

• Bush has proposed doubling the tax incentives (at a cost of $29 billion over five years) for contributions to Health Savings Accounts (HSAs), a device aimed at encouraging the purchase of high-deductible individual insurance policies that are mainly attractive to younger, healthier, wealthier people. But this is hardly a silver bullet for holding down health care costs. "You don't make consumers more cost conscious by doubling the federal subsidy for their out-of-pocket health care spending.... The reality is that even if HSAs prove to be wildly popular with consumers, the bulk of health care costs will still be paid by insurance companies, because 80 percent of health care spending is for expensive treatment of major illnesses and chronic conditions such as heart disease and diabetes, not routine care." Even according to the administration's own optimistic estimates, says Kendall, in five years "HSAs will cover less than 2 percent of the nation's health care spending."
• Bush has also proposed increasing tax incentives for people to buy individual health insurance policies instead of continuing job-based group coverage. At the same time, he would encourage employers to take money out of group plans to subsidize individual policies, and would let people buy policies across state lines, neutering state rules that require pricing of policies based on spreading risks broadly.

  In combination, these proposals could simultaneously unravel today's employer-based group policies, while making it easier for insurers to "cherry-pick" healthier employees. At a time when "many big employers are finally beginning to use their market heft to drive harder bargains with insurance companies and providers to improve quality and restrain costs," the Bush proposal would drive the whole system in the opposite direction, at a cost to the federal government of $13 billion over five years.

• In another ideological nod towards a theory of market-based health care, Bush has proposed that health care providers voluntarily disclose prices so that consumers can, as Kendall described the theory, "shop for the best health care deals, as they do when they shop for other products and services." But voluntary disclosure of prices, as opposed to mandatory disclosure policed by objective, third-party analysis along the lines of "Consumer Reports-style information about the quality of services," won't come close to creating the consumer's paradise Bush claims to envision.
• Still another Bush nod to a conservative policy hobby-horse is his endorsement of Association Health Plans (AHPs), aimed at giving small businesses a way to pool resources and offer more coverage to their workers. But the Bush AHP plan, which would exempt them from state insurance regulations, would actually undermine group purchasing power, driving small businesses towards cherry-picking insurance policies that would reduce, not expand, small business bargaining clout.
• Bush's "plan" for expanding coverage for the uninsured is basically every item above, and according to nonpartisan experts, it would increase, not reduce, the number of uninsured as employers begin to drop group coverage in favor of subsidies for individual policies that favor the young and healthy. This Darwinian health care policy push would intensify pressures on coverage already presented by the administration's efforts to shift costs to the states in the big national low-income health care programs like Medicaid and the State Child's Insurance Program.

There's a lot more not to like about Bush's health care agenda, from the false assertion that medical malpractice "reform" will reduce costs absent a serious effort to improve health-care quality and reduce medical errors; to its go-slow and underfunded commitment to digitization of medical records; and to its pretence that Medicare and Medicaid provider and beneficiary cuts amount to a serious effort to reform Medicare and Medicaid.

All in all, Bush's health care agenda is ineffectual at best, and deeply reactionary at worst, and as Kendall concludes: "It represents yet another instance of the triumph of radical individualism and market fundamentalism over a progressive politics of mutual responsibility for health care security."