Michael Cannon over at the Cato Institute has been praising Bush's healthcare proposal which will be unveiled this evening during the State of the Union address.

He also writes that parts of the proposal mirror work done by Cato scholars:

I’ve returned from my first pre-State of the Union briefing of the day by the Bush administration. (I’ve got another at 4:30). What I heard about the president’s health care proposal has me even more heartened.

In part, that’s because the president’s proposal mirrors the proposal for “large HSAs” that I introduced here and here, and that Mike Tanner and I explain in Healthy Competition: What’s Holding Back Health Care and How to Free It.

However, the president’s proposal does not incorporate an important third element of the Large HSAs idea: giving workers ownership of the part of their compensation that purchases their health benefits.

Here’s why that’s important. If your employer currently spends $10,000 on your health benefits, that part of your compensation is untaxed. The president’s proposal would let you keep that tax break if you choose to purchase coverage someplace else. But it does nothing to make sure that you get to keep the $10,000 that your employer spends on your health benefits. That money is not a gift — it is part of your compensation. But if you choose to leave your employer’s health plan, the employer is under no obligation to give you the money that he otherwise would spend on your health benefits. In fact, your employer would face strong incentives not to “cash you out.” Being free to choose where to purchase your health insurance means less if you have to take a pay cut to excerise that freedom.

And for those of you that are interested...I'll be live blogging the SOTU this evening.