According to various news reports (here's The Washington Post summary), Bush wants to "solve" the health care problem in this country by allowing people who pay for their own insurance to deduct that cost on their taxes.
Now I don't particularly object to such a tax break -- it seems reasonable to me to allow folks to deduct the cost of expensive, but necessary, services on their taxes -- but I'll leave it to the tax policy wonks to debate whether this is a good idea from a tax and public policy point of view.
The trouble with this proposal is that it doesn't even begin to solve the health care problem. Tax breaks can't help you save enough money to pay for health insurance if you're in a low tax bracket. And most of the people who need health insurance don't pay a lot of taxes (except for social security taxes, which won't be affected by this).
And then Bush wants to tax employees who get employer-provided health coverage that costs more than a certain minimum -- $7,500/year for singles. Speaking as someone who has decent employer-provided health insurance (though it certainly isn't "gold-plated"), let me point out that good policies are the result of trade-offs. They keep people from leaving for other jobs, which is a boon for employers. And employees are generally willing to forego some increases in pay to keep good benefits. Once again, Bush wants to shift taxes to the middle class to help the poor -- he'll do anything to keep giving tax cuts to his wealthy friends.
Here's another little glitch in the Bush plan. The New York Times reports that he wants to take federal money away from hospitals -- especially public hospitals -- and give it to the states to help them provide insurance for their citizens. That is, no net increase in money. I'm not sure what he expects the hospitals to do: Raise rates? Get more tax dollars from the state (leading to a tax increase, but not a federal tax increase)? Go out of business? Now there's a good solution to the health care problem: Put hospitals out of business.
I know Bush isn't listening -- he prides himself on not listening -- but for those who are paying attention, here are the health care issues that we need to address:
- Health insurance is expensive -- even if you're young and healthy and covered by a group plan, it's hard to pay for it unless you make a good salary. There's no way to pay for it if you're earning minimum wage -- or even double the minimum wage.
- Health insurance plans are over-complicated -- it's hard to figure out what services are covered and plans often refuse to pay for covered services unless you put up a fight.
- The cost of medical care for serious illness or injury is so high that most people cannot afford it without a decent health insurance policy.
- Individuals with any kind of health problems cannot get affordable coverage -- and sometimes cannot get any coverage at all -- unless they happen to qualify for a group plan.
And for those of you who like to look at things from a business point of view: Toyota ended up putting a new car plant in Canada, rather than in the US, because it doesn't have to provide health insurance in Canada, which has a decent system. I suspect other businesses are making similar calls.
The core problem is that health insurance -- and therefore health care -- is expensive, complicated, and difficult to get unless you're young and healthy or come under a group plan.
Tinkering with the tax code isn't going to solve any of that.