Curing health care: Bush's prescription

Published 6:37 pm Monday, February 5, 2007

By By Tray Smith
Health care is cited second only to Iraq and terrorism when Americans are asked to name their most important concerns. This sentiment is understandable, as health care costs absorb one sixth of our nation's economy, threaten the long term financial sustainability of our government, and hamper our businesses' ability to compete in a challenging global market place. But unfortunately, the options presented by policy makers have often left the nation with a choice between low quality care that costs less or the unsatisfactory status quo.
Finally, President Bush has decided to take action. He has presented a proposal that would utilize the free market to cure our health care system. His health care reform proposal would allow individuals to deduct $7,500 ($15,000 for families) in taxes to finance health care plans, regardless of whether those plans are purchased individually or provided by an employer. For 80 percent of Americans, this would be a tax cut. But Americans with the most expansive health plans will have to pay taxes on all health expenses that exceed that limit, compensation that is now beyond the reach of the IRS.
Because current law only allows taxpayers to deduct health plans provided by employers, this program will offer tax assistance to all of those who do not receive insurance through their place of work.
Punishing the 17 million Americans who buy their health insurance individually because they are unable to receive coverage from their job is simply unfair. By allowing them to deduct those expenses, this injustice will end. More of the uninsured will be encouraged to buy health plans. Tax relief will be provided to millions of Americans. And the perverse tax subsidy that encourages companies and workers to spend limitless amounts of money on health care will dissolve, giving medical consumers an incentive to keep prices low.
Democrats are skeptical of the plan because of fears it will weaken or kill the employer-based health care system. But that system, which consumes an explosive amount of financial resources, is already dysfunctional. If these reforms will lead to a health care system in which coverage is tied to individuals instead of employers, the employer-based system should be eliminated. While businesses will be encouraged to drop worker health care coverage all together, if those funds are used to raise employee compensation, workers will then be allowed to use their own money to purchase medical care, and everyone will benefit. Because access to medical care will no longer be tied to employment, individuals will be able to take care from job to job and receive care during transition. Employers do not pay for home, car, and life insurance, why should they pay for health insurance?
If someone offered to pay for all of your gas this year, you would probably make little or no effort to conserve fuel. The same goes for health care. With a huge government tax subsidy, employers compensate workers with increasingly lucrative health plans that encourage more wasteful health spending. By using the market to eliminate those incentives, we can reduce cost by reducing the amount of money people are willing to spend on health care.
At the same time, we must take other steps to bring our medical system into the modern era. We should harness the power of the internet to release information about the quality and cost of hospitals and drugs, just as we currently do for hotels and airlines. We should mandate that everyone in the country have access to an electronic medical record that will reduce the draconian amount of paperwork in our hospitals. Small businesses, unions, churches, and nonprofit organizations should be able to join together in association health plans (AHPs) to offer health insurance to members. Health insurance should be sold across state lines. All citizens and members of AHPs should be able to buy into the Federal Health Insurance Benefits Program, which insures members of Congress. Funding for Medicare, Medicaid, SCHIP and all other government health assistance programs with the exception of the Veterans Administration should be consolidated into one national block grant program administered to the states under the agreement they will ensure that everyone within their borders is covered by a basic health insurance plan. Finally, medical malpractice reform should be enacted so that lawyers can no longer threaten doctors with burdensome, needless junk lawsuits.
Democrats will reject many parts of this plan. They have already announced that the President's tax deduction is "dead on arrival." But if the President uses his leverage and forces them to accept his policy in exchange for their priorities such as the expansion of the State-Children's Health Insurance Program, it is possible he could achieve meaningful health care reform before he leaves office. That would mean he could be remembered for a domestic achievement other than the dreaded No Child Left Behind Act.
That is the bottom line.
Tray Smith is a sophomore at ECHS and former intern in the Riley administration. He can be reached for comment at

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