On this Tuesday, at the State of the Union, the Presidentis is reported to introduce his plan for bringing down the cost of healthcare. Flush with success regarding Katrina, Homeland Security, Iraq, and Energy Prices, he tackles one of the primary concerns of modern Americans (Reuters via Yahoo News):
Bush's health-care proposal would use tax breaks to make it easier for people who do not have employer-provided health insurance to buy coverage on their own. The tax incentives would be similar to deductions used by homeowners for the interest on their mortgages, Bush said.
But the program is intended to have no effect on government revenues because the cost of the tax breaks would be offset by changing the way health insurance is treated in the tax code, according to a senior administration official who described the proposal to reporters.
The current health system relies primarily on employers to provide health-care coverage as a fringe benefit. Employees are not taxed on the benefits but the Bush plan would set a cap on the amount of coverage that could be offered tax-free.
[...]
While some people would get hit with higher taxes as a result, there would be a windfall for those who opted for low-cost plans because they be given tax deductions up to a certain limit, even if their insurance cost less than that.
Bush said the tax code unfairly penalized people who want to buy health insurance on their own while offering incentives for people to use expensive, "gold-plated" coverage.
Bush's builds on other initiatives he has pushed, including the expansion of health savings accounts that allow people to save tax-free for routine health-care expenses, while relying on low-cost insurance for catastrophic illnesses.
Now, I think that having the employee take responsibility for their healthcare is not necessarily a bad thing, provided the employer provides them an offset in the part of increased wages, versus just dumping it on them. The end state, where benefits are no longer part of the employment package, may translate into higher job mobility and higher wages (employers would have to compete morefor labor, and employees would be free to pursue new and better careers, since they would no longer be dependent on their employer for healthcare).
The end state may be grand, but getting there is going to hurt like hell. Let's examine all the places this plan is wrong. The primary purpose of this plan is to enable the poorest Americans to pay for healthcare via tax deductions. Um, jackass, if they're so poor, where are they going to get the money to pay for the insurance anayway, so they can deduct it at tax time? The deductions will do ZERO to help the 46 million who can't afford coverage.
I recall reading from Kerry's 2004 Presidential Campaign blog that while Bush has been office, the cost of insurance has doubled, yet his deductions remain exactly the same. Wonder why that is, and who benefits?
Another important point – Democrats are typically more entrusted regarding healthcare – anything Bush does to weaken employer provided healthcare strengthens the Republican Party, so you can see where this is going?
This horrible plan of his, like all of his horrible plans, no dount comes from "experts" within the healthcare and business community, eager to use supply side-economics to justify switching the burden of healthcare on to those that can least afford and provide the maximum benefit (and minimum liabilty) to the business community.
This post will be updated until the SOTU.
Tags: health insurance, healthcare, Homeland Security, insurance anayway, Iraq, Republican Party, Reuters, Yahoo
