At last Republicans have a health care plan they can support, a plan that will help people both get health insurance and take more control of their medical care. I am not talking about Mitt Romney’s plan in Massachusetts or Arnold Schwarzenegger’s plan in California. I am, and I am amazed to be saying this, talking about the plan President Bush announced in his State of the Union address last Tuesday evening.
President Bush’s domestic policies have too often been contrary to conservative principles of limited and modest government. (A "modest" government is one that does not think it knows everything and should decide things for its citizens. A modest government lets people decide for themselves because it realizes individual people know more about what is best for them than the government does.)
For example, while "No Child Left Behind" does, at least, establish the principle that schools must be held responsible for the job they do, it is not the federal government which should be doing it. Elementary and secondary education is a job for state and local government. Too often in the 2000 and 2004 elections it seemed like George Bush and the Democratic candidate du jour were running to be president of their local school board instead of President of the United States.
The huge expansion of Medicare that was the prescription drug program for seniors is another example of Bush’s lack of conservatism. While Part D is working better than anticipated, the program itself makes Medicare an even bigger burden, an even bigger unsolved problem, for the future. (The only thing that can be said for Part D is that, because it lets people choose what drug plan works best for them, it is costing less and working better than expected.)
Which brings me to President Bush’s health care proposal. It is breathtaking both in its simplicity and in the way it addresses the health care problem.
The plan has two parts. First, families get a special new deduction for health insurance of $15,000 per year. Singles get a $7500 deduction.
Second, people who are presently getting health insurance at work will have the cost of that health insurance considered taxable income for them. For most workers, the value of their health insurance coverage at work is less than $15,000, so they will not pay any additional taxes. In fact, they will get a tax cut. The only people who will pay more taxes are those who have super-expensive health insurance (i.e., the kind that covers everything with no deductibles and no limits). This combination of deduction and taxability will help people realize that health insurance is not free and will encourage them to get involved in making sure they get real value for their health insurance dollar – because if they do not, it will cost them money, either in a lower refund or a higher tax bill.
By providing real tax relief to people when they buy health insurance, the plan will make it easier for people to buy health insurance. This is especially true since the plan provides that the $15,000 deduction applies not just to income taxes but also social security taxes. This will be a real tax break for many low- and middle-income workers.
One of the beauties of the plan is that it both helps address the health insurance problem and gets rid of a tax break that unfairly favors employed workers over everybody else.
Also, by getting people involved in making their own decisions about health insurance and their health care, instead of delegating it to another new government bureaucracy, as the Democrats would do, we have some hope that medical costs can be kept down while care does not suffer. Getting people involved in making decisions about their own health care is part of what has been responsible for the success of Medicare Part D. (It pretty much says everything about the Democrats that we finally have a government program that people are satisfied with and which costs less than expected, and the Democrats want to impose more government controls.)
President Bush’s new health care proposal helps people buy health insurance; it gets rid of an unfair tax break; and it enables and encourages people to take more control of their own medical care and health insurance. I am glad there is finally an intelligent health insurance program that conservatives can support.
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