Bush's Health Care Plan

I guess I don't make enough enemies around here with my GOPragmatism®, I had to go out looking for trouble on other blogs.

Josh Hendrickson at The Everyday Economist is unimpressed with the President's Health Care plan, as expressed today in a WSJ editorial by L. Ron. Allan Hubbard. Hubbard makes a great case for the importance of keeping what's good about American care while trying to repair what is bad.

The problem is straightforward: Under today's tax code, people who are fortunate enough to get health insurance through their jobs get a big tax break -- but those who have to buy coverage on their own get no tax break at all. That is not fair, and it is not wise. It makes it impossible for millions of Americans who work for small businesses or who are self-employed to afford health insurance. And it drives up the cost of coverage for us all.

So President Bush has proposed to level the playing field for health insurance. Under his plan, every family with private health coverage would receive a standard tax deduction of $15,000 -- no matter where they get their health insurance. This deduction would encourage more people to buy their own health insurance, just like the mortgage interest deduction encourages more people to buy their own homes. Some have suggested that a flat tax credit could also achieve the president's goal of leveling the playing field, and he has signaled that he would be open to that option.

I like this plan as a bold step to break the country's dependence on employer-provided care. If that can be broken, a lot of other reforms are enabled. People will demand interstate insurance and other innovations.

Hendrickson provides a generous excerpt, salutes the good parts, then questions both the ability of helping those too poor to buy insurance with a 15,000 deduction, and:

We need to eliminate all tax deductions and credits (whether personal or corporate) and move toward an insurance policy that is much more similar to auto insurance than modern health insurance. Such a plan would bring price back into the equation and limit the administrative costs of HMOs and other managed care organizations. The plan proposed by Hubbard essentially tries — rather unsuccessfully — to give everyone the incentive to over-insure.

I think the President is tilting at windmills here, but I would like to see the GOP take this up as a realistic alternative to HillaryCare. Providing tax-neutrality between employer funded and self funded insurance would be huge. That is the stumbling block that prevents the innovations from auto insurance from arriving in health insurance.

As I commented there, I'd be all for the government getting entirely out of the equation. But this would be an improvement very much worth fighting for.

Pharmaceuticals Posted by jk at July 24, 2007 2:04 PM