Increasing tax breaks for health insurance will not materially increase the number of folks with insurance. Yes, there are several studies that purport the Bush plan will result in more folks buying coverage, but there are a number of studies that show it would result in a very small increase, or actually decrease the number of folks with insurance.
What is puzzling is the schizophrenia embodied in conservatives’ view on health insurance and taxation thereof. Bush, an avowed conservative, touts tax breaks as the way to get more people to buy coverage, an idea also central to the platform planks of Mssrs. McCain, Giuliani, and Romney (Huckabee’s ‘fair tax’ is, well, rather different).
Doesn’t this amount to a government subsidy of health insurance, one that will distort consumer behavior by reducing the cost of coverage, and therefore of health care? Bush et al try to address this via high deductibles, but isn’t that fixing a problem caused by their own tax policy? If conservatives have so much confidence in the consumer, why do they need to offer them a tax break to buy something that logically, it is in the consumer’s best interests to purchase?
Conservative policy types have suggested chopping the proverbial baby in two, by limiting tax breaks to those plans that provide a minimum level of benefits. The idea is to encourage coverage without subsidizing plans with excessive levels of benefits; those “Cadillac” plans. What parts of the plan make it a “cadillac”?
– Hospital coverage?
– Physician visit coverage?
– Drug coverage?
– Diagnostic test and imaging coverage?
– Behavioral and mental health coverage?
– Physical therapy?
Where’s the bling? Where’s the fine Corinthian leather, the Bose 29 speaker stereo, the gold-embossed hood ornament?
Where’s the ‘excessive’ insurance? If there is any, it is small potatoes.
I applaud the folks who are trying to square their philosophies with the realities of politics, economics, and health care. Their ability to tie themselves in knots in an effort to remain true to their ideology while fixing a problem is painful to watch.
I’m just now sure how that solution is ‘conservative’.
Jan
31
“Doesn’t this amount to a government subsidy”
Interesting Joe that you seem to consider a tax reduction – allowing people to keep marginally more of their own money – to be a “government subsidy”.
Even more interesting, you choose to describe proposals to equalize tax rates on purchase of individual and group insurance as somehow bestowing a differential advantage on one over the other. In so doing, you ignore the differential that exists now. And you ignore the market distortions that the present differential creates. And anyway, wouldn’t tax rates equalize in any universal system?
I see utterly zero logic in opposing equalized tax rates on the purchase of private insurance – whether group or individual.
JF – you miss the point of the post entirely. it is not I who am constructing a government subsidy, it is the backers of this proposal. I am merely pointing out the inconsistencies in their positions.
And what does that have to do with a universal system? The post did not mention a universal system.
Try to read more carefully, it may help you avoid making completely unsupported assumptions.
Joe Paduda