Is This Health Reform or Just More "Tax Reform?"

January 20, 2007

In his Saturday morning radio talk, a preview of his State of the Union address remarks on health care,Bush listed his reform proposals.

Administration health policy has been assumed by many to be a creature of the insurance and pharmaceutical industries. This new approach, however, seems to be a creature of the cosmetics industry.

The key element is "tax reform," under which individuals can take a deduction for buying health insurance at market prices. Just as with the administration's Health Savings Accounts and Bush's proposal to let small businesses (but not Medicare recipients) get the same discounts big businesses get, the new plan rewards the "haves." The "have-nots" are taken care of to some extent by Medicaid and Medicare. So that leaves the "have-not-so-muches" in the working class to bear the burden.

Mitt Romney and Arnold Schwarzenegger have proposed making health insurance as mandatory as car insurance, and Bush compares the proposed health care deduction to the existing deduction for homeownership. Neither of these analogies quite work.

If you don't have car insurance, you are usually not allowed to drive, and if you default on your mortgage payments, you not only lose the deduction, they take your house away. But no matter how much opponents of single-payer health insurance dress up tax reform as a method of health care reform, under the Bush plan they may take your health away.

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