I’m up over at Spot-on discussing the basics of Bush’s Health Plan. Go read and return to comment.
I was awakened during my slumber through the State of the Union by a
mention from President George Bush of a health care proposal that I
almost agreed with.
No, I haven’t come around on health savings accounts, and association health plans.
Nor did I join the Republicans in their standing ovation for
malpractice reform. The Bush proposal that woke me up was the creating
a tax deduction for health insurance that would apply to everyone.
Potentially this really matters, and inside it is the germ of the right
idea. But I guarantee you that most Americans won’t have a clue where
this came from, and why it made it into the president’s speech.
Let me explain a little. Health insurance for the vast majority
of Americans (60%+) comes from their employers. 99.9% of Americans
think that this is a natural relationship that costs them nothing and
they, in general, have no idea what it costs their employer. This is
though a historical accident, with its roots in a wage freeze policy
during WWII when employers added benefits to attract workers because
they couldn’t raise pay rates. The idea became fixed after the Supreme
Court ruled that health benefits didn’t count as taxable income.
So, today, you’re better off getting insurance paid for by your
employer than taking the cash, getting taxed and buying the same
insurance yourself. Lately self-employed people have also been able to
deduct their health insurance costs so the only saps left paying for
health insurance with post-tax dollars are those who are not
self-employed, don’t get it from their insurers and actually buy it
You may think that’s not very fair, and you’d be right. Which is why Bush’s proposal is interesting.Go on, Continue …