Editorial: To Our Health - Bush plan deserves serious study
The Oklahoman
February 5, 2007
CONGRESSIONAL Democrats responded to a health care proposal pitched by President Bush in his State of the Union speech with an assortment of brickbats. "Dead on arrival,” sniffed Rep. Pete Stark, chairman of the House subcommittee that handles health care issues. "Dangerous,” said Ways and Means Chairman Charlie Rangel. Senate Majority Leader Harry Reid called the proposal an "attack” on American workers. So much for calm discussion.
That's too bad, because aspects of Bush's plan deserve a look by Congress as it examines problems with health care insurance.
Most Americans get their health care through their employer. There's no limit to how much coverage a company can provide, and any compensation designated by the employer to buy health insurance isn't subject to income or payroll taxes.
Bush would replace the current unlimited exclusion with a set standard tax deduction applicable to company-sponsored plans and insurance purchased by individuals on their own. The deduction would eliminate payroll and income taxes on insurance worth up to $15,000 for families and $7,500 for individuals — which is above the cost of a typical plan. The president says everyone would be treated the same under the tax code, stimulating wider choice and competition that in turn will help rein in health care spending.
As for the 45 million Americans who are uninsured, the tax deduction would help some, although the effect on low-income workers would be minimal because most don't have much tax liability. Other ideas could fill that gap, such as a refundable tax credit contained in legislation co-authored by Oklahoma Sen. Tom Coburn.
Bush also proposes new incentives for states to make affordable private insurance available to low-income residents. Through federal grants, states could offer direct premium assistance, establish high-risk pools for very sick people and facilitate pooling of individuals and small businesses to buy private health plans.
It's complicated, and many ideas should be considered. Bush's plan appears to create equal treatment under the tax code while generating some market pressure on health care costs. It should get more than the back of the hand from Democrats.
