KISS (Keep it Simple Stupid!!!)–Everybody has a plan for Health Care

The compassionate one, President  Bush, is proposing a new standard deduction for health insurance — $15,000 for families and $7,500 for individuals. If I understand it correctly,  employer health insurance benefits would be added to taxable income of the employee and then is eligible for the standard deduction. Those purchasing individual policies also qualify for the tax deduction.  The hope is that the tax deduction will help the uninsured purchase coverage.  The plan would raise taxes for about 30 million people with costs exceeding the standard deduction. 

Bush’s plan, which is said to make health insurance more accessible for the nearly 47 million Americans who lack health insurance, would start in 2009 and supposedly be revenue neutral over its first 10 years.

The Washington Post further states: "Others fear the plan would prompt more employers to drop health coverage and offer employees an immediate increase in wages to buy coverage on the individual market. But those plans tend to be more expensive, less comprehensive and harder to get for consumers who are already sick."  Given that many industries complain that they are uncompetitive because of the health insurance costs it seems  naive to expect that they will pass all or even a large part of their savings on to employees. A more likely scenario is that they will offer less or no insurance and pocket the savings.    

Bush’s plan also does nothing about the costs of care and indeed will increase the amount spent in our inefficient health care system.   Private insurers main fiduciary responsibility is to increase the company’s value for stockholders not to provide quality care efficiently.  If costs are higher, premiums increase.  Without addressing the conflicts of interest and inefficiencies in our system the new plan will fan the flame of health care inflation. 

Lastly Bush’s plan offers tax breaks for those with insurance but does little, if anything, for the working poor, a significant part of the 48 Million uninsured.   "While more than 100 million people would get a tax break, the administration estimates, more than 55 percent of the uninsured – about 25 million people – have such low incomes that they pay no income taxes, Davis said. So the tax changes would not make insurance any more affordable for them, she said." 

A trickle-down plan that works through tax cuts is doomed to fail if implemented.  The delusion that tax credits are health care reform is similar to the notion that introducing democracy to Iraq would be easy.  Health care reform is a multi-headed nasty beast.  The money driven marketplace hasn’t worked for innumerable reasons (see Medicynic’s archives).  Sadly Bush’s proposal is not even a first step toward taming it.

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