WASHINGTON--In his State of the Union address on Tuesday, President Bush proposed a plan to help cover the nation's uninsured that includes changes to the tax code and federal assistance to states.

"When it comes to health care, government has an obligation to care for the elderly, the disabled and poor children," Bush said. "And we will meet those responsibilities. For all other Americans, private health insurance is the best way to meet their needs."

In his address, Bush proposed the following health care-related measures:

• a standard tax deduction for health insurance like the standard deduction for dependents;
• "Affordable Choices" grants, created from existing federal funds, for states to make basic private health insurance available to all their citizens;
• expanding the Health Savings Accounts program and helping small businesses via association health plans;
• reducing costs and medical errors with better health information technology;
• encouraging price transparency; and
• passing medical liability reform to protect doctors from "junk lawsuits."

But while proposing expansion of health coverage, the Wall Street Journal reported Friday that the president's new budget, to be released Feb. 5, contains proposals aimed at slowing growth of the government's Medicare program, viewed as a major element in his plan to balance the federal budget by 2012.

Treasury Secretary Henry Paulson told the newspaper in an interview that curtailing Medicare growth complements Bush's plans to change tax laws on employer-provided health insurance and to encourage Americans to choose cheaper health plans. Paulson would not discuss the details, but unnamed sources said the proposals could generate $90 billion in Medicare savings, which would come mainly from health care providers with some beneficiaries also affected.

"When the budget goes up, you will see a number of changes relating to Medicare which are aimed at slowing the growth of these liabilities, slowing the trajectory," Paulson told the Journal.

In his address, Bush said failure to put Medicare, Medicaid and Social Security on solid financial footing "will one day leave our children with three bad options: huge tax increases, huge deficits, or huge and immediate cuts in benefits."

Shortly before Bush's speech, the American Association for Homecare issued a press release noting that home care providers have been working to inform lawmakers in Washington of research that shows home care's cost-effectiveness, and said such research is "important for legislators to keep in mind as they will be looking for programs to cut, and home care has already been subjected to repeated cuts in recent years."