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Maybe Bush Had Another Good Idea!

Now that President Obama has admitted to a small cadre of donors that he may need to "redo" Obamacare in his increasingly-improbable next term, it is appropriate to consider what a viable alternative might. I am not suggesting that any alternative would be workable for President Obama or his allies. They are clearly committed in the long run to a single payer system, in which all health care is controlled and channeled through government bureaucracies. Witness, as a small foretaste, Health & Human Services' Secretary Sebelius' various mandates for "free cost coverage", including those which Catholics and others find objectionable. As Obamacare becomes better known, and crawls toward an implementation (that hopefully never happens), its implications and possibilties became clearer and more shocking. 

So, let us consider what a more reasonable, thoughtful and well-considered plan might look like. And for that, we need look only so far as President George W. Bush. Avik Roy, a brilliant young health care contributor on health care matters to Forbes, wrote an extensive piece on this subject a short while ago. And, in light of President Obama's recent admission that he may need to re-think his ill-conceived and wildly unpopular plan, it is time to look more closely.

With about 2 years left in his eight year term, Bush proposed an extensive plan designed to rely upon the private health care system. Of course, in 2006 Democrats took control of Congress--in response to an increasingly unpopular Bush--and any hopes of passage or even serious consideration was doomed from the outset. Sometimes, timing is everything!

But, let's look at that proposal as a starting point, in very summary fashion:

  1. its cornerstone was elimination of unlimited tax deductions for employer-provided health coverage. Instead, anyone purchasing health insurance would receive a tax deduction on income and payroll-related taxes of $7500/individual, $15,000/family; 
  2. these deductions would be indexed to CPI;
  3. those who elected less-expensive catasrophic coverage would effectively self-insure for expenses below that catastrophic level...and would receive the benefit of a tax deduction for an amount greater than their cost of insurance;
  4. one of the largest causes of our current crisis in health care costs is the 1986 EMTLA law, which requires hospital emergency rooms to provide care even if the individual can't pay and has no insurance. To cover some piece of this uncompensated care the federal government gives many hospitals a partial reimbursement.
  5. the Bush plan would reallocate these funds to various State-directed approaches to assist low income persons to purchase their own insurance.

 Roy notes that reliable estimates at the time indicated that some 11 million uninsured would be covered under this approach. While less than under Obamacare, the Bush proposal does it without increasing the federal deficit. In fact, because the individual tax deduction would increase with the rate of inflation, while the current employer deduction increases without limit, the proposal actually reduces the deficit. 

Roy summed it up nicely:

the Bush plan of 2007 is a worthy foundation for market-based health reform, in that it shows how capping the employer tax exclusion can free up health-care resources for other purposes

So, if President Obama should be in the unlikely position of having an opportunity to revamp his misguided first attempt at health care reform perhaps he can conclude that he and his supporters are not necessarily the source of all wisdom and look to other, more workable solutions...maybe even some from the Republican side.

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