President Bush's Healthcare Proposal - The American Spectator | USA News and Politics
President Bush’s Healthcare Proposal

In my post below previewing President Bush’s State of the Union speech, I mentioned his healthcare proposal. Here are more details on the two part plan:

1) Under the plan, individuals purchasing insurance on their own or through their employer would be exempt from paying income or payroll taxes on the first $15,000 of their income. This would translate into $4,500 for a family of four with income of $60,000. In addition, small businesses such as S-corporations would get the same tax incentives for providing healthcare as larger companies.

2) The second part of the plan would recognize that even with such tax incentives, some people would still be too sick or poor to find affordable healthcare. So, the plan would call for federal dollars currently being sent to institutions to be diverted to individual states doing “innovative things” to help individuals afford private insurance.

I feel better about number 1 than number 2, but wonder whether it would drive up healthcare costs further. Also, I tend to view tax credits as another form of subsidies that complicate the tax code (I would trade less deductions and credits for lower rates and simplicity). But in a more fundamental sense, I worry about the fact that Republicans are moving closer and closer to embracing the idea of universalizing healthcare (see also Mitt Romney, who has done so explicitly). Once Republicans, at the philosophical level, endorse the idea that the government has a role in making sure all Americans have healthcare coverage, the only debate left to have with Democrats is over what type of universalized healthcare to have. And that’s a debate that small government conservatives lose. Sure, perhaps in the beginning we end up with some sort of Frankenstein market/socialized model, but over time those market elements disappear and get replaced by bigger government. With that said, I’ll reserve judgment on the specific details of the Bush plan until I learn more.

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