Health-Care Fool's Gold

Somebody must be getting the message that the people want a national health-care fix. Just don't expect any meaningful reforms from the Bush administration.

Once again Bush proposes tax breaks for individuals who buy their own health insurance or put money aside in health savings accounts, showing how little he identifies with the problems of the working poor and the middle class.

As Paul Krugman noted in the Jan. 22 New York Times, "Most people without health insurance have low incomes, and just can't afford the premiums. And making premiums tax-deductible is almost worthless to workers whose income puts them in a low tax bracket.

"Of those uninsured who aren't low-income, many can't get coverage because of pre-existing conditions -- everything from diabetes to a long-ago case of jock itch. Again, tax deductions won't solve their problem.

"The only people the Bush plan might move out of the ranks of the uninsured are the people we're least concerned about -- affluent, healthy Americans who choose voluntarily not to be insured. At most, the Bush plan might induce some of those people to buy insurance, while in the process -- whaddya know -- giving many other high-income individuals yet another tax break."

Bush would pay for these tax breaks by taxing workers who managed to negotiate relatively generous insurance coverage. The tax code, he said, "unwisely encourages workers to choose overly expensive, gold-plated plans. The result is that insurance premiums rise, and many Americans cannot afford the coverage they need."

Krugman, an economist, was bowled over. "No economic analysis I'm aware of says that when Peter chooses a good health plan, he raises Paul's premiums. And look at the condescension. Will all those who think they have 'gold plated' health coverage please raise their hands?

"What's driving all this is the theory, popular in conservative circles but utterly at odds with the evidence, that the big problem with US health care is that people have too much insurance -- that there would be large cost savings if people were forced to pay more of their medical expenses out of pocket."

Ezra Klein of Tapped.com was willing to give the president the benefit of the doubt until he saw that Bush proposed to create a standard health insurance deduction of $7,500 for individuals and $15,000 for families. Everyone who bought insurance would get those entire deductions no matter what they spend, Klein wrote. "If you're 23 and your health care costs $2,000 a year, you still deduct $7,500, pocketing the difference. It would, in that situation, be economically foolish of you to purchase high-quality, comprehensive coverage. And that goes all the way up the line. The intent here is clear: To incentivize the purchase of low-quality, high-deductible care, particularly among the healthy, young, and/or rich. To degrade the risk pool, and encourage [health savings accounts]. To reduce coverage, costs and health security."

Bush's instinct is to drum up more business for his friends in the insurance industry. His previous plan to control health costs was to limit injured patients' ability to recover damages from malpracticing health care providers and their insurers.

If it's any comfort, Bush's plan will get nowhere in Congress, where Rep. Pete Stark, chair of the House Health Subcommittee, already has dismissed the idea of hearings.

We hope Stark, D-Calif., will give a favorable hearing to HR 676, the National Health Insurance Act, sponsored by Rep. John Conyers, D-Mich. It would expand Medicare to cover all Americans. Stark was one of 78 co-sponsors of the bill, which never got a hearing in the past two GOP-majority Congresses.

The bill, endorsed by 225 labor organizations, has the advantage of efficiently providing patients with their choice of health care providers, guaranteeing those health care providers with payments for their services and relieving businesses of the burden of administering health insurance plans. The problem is that it does away with the need for insurance companies, which makes for a formidable and well-funded adversary.

Perhaps to head off the possibility of Medicare expansion, the insurance industry has put together a coalition to promote more government subsidies for private health insurance. With the American Medical Association, the US Chamber of Commerce, the health insurance lobby and a dozen other interested groups, including AARP and Families USA, the "Health Coverage Coalition for the Uninsured" proposes a two-phase expansion of health care. Phase I would allow parents to more easily enroll their children in programs such as the State Children's Health Insurance Program (SCHIP) or Medicaid. (Many states have cut health costs by making it difficult for parents to qualify their children for the program.) States would get money to experiment with innovative ways to expand health coverage and tax credits would be available for families to buy insurance for their kids.

Phase II would give states the option to expand Medicaid eligibility to cover adults below the poverty line. Tax credits would help pay for private insurance for families with higher incomes, up to 300% of the poverty level.

We have to be suspicious of a plan that is embraced by the insurance racket, but this one probably has a better chance of getting through Congress and helping some of the 47 million uninsured Americans in the short term. The insurance industry and the AMA have poisoned debate about "socialized medicine" to the point where, Klein noted, a November 2006 poll found 51% support keeping the current private-insurance-based system, while 39% support replacing the current system with a government-run health-care system. (10% were unsure.)

AARP was snookered in 2003 into lending its credibility to the badly flawed Medicare drug plan, but Families USA has been a standup force for universal care, so perhaps this insurance plan is worth a look. Certainly congressional Dems would rather proceed with a bill that does not make enemies of the insurance racket as well as the doctors. That is, unless you, the people, can persuade them to expand Medicare. Now.


Bush's Omissions

Bush showed up in the House Chamber Jan. 23 for his State of the Union Address. He went through his wish list for the 110th Congress, but he missed a few issues. New Sen. Jim Webb, D-Va., went over some of these points in a populist Democratic response that was strong as an acre of garlic. Among other things, he called on Bush to address domestic priorities such as restoring New Orleans as well as the endangered American middle class, which "is losing its place at the table. Our workers know this, through painful experience. Our white-collar professionals are beginning to understand it, as their jobs start disappearing also. And they expect, rightly, that in this age of globalization, their government has a duty to insist that their concerns be dealt with fairly in the international marketplace."

Turning to foreign policy, Webb threw down the gauntlet at the president who took the nation recklessly into a war that has cost our treasury, our reputation and our ability to fight international terrorism. Invoking the legacies of GOP presidents Theodore Roosevelt, who stood up against the robber barons of his day, and Dwight Eisenhower, who brought the stalemated Korean War to an end, Webb challenged Bush to take similar actions. "If he does, we will join him. If he does not, we will be showing him the way." Webb's a good hire, Virginia.

One other note: Josh Marshall of TalkingPointsMemo.com noticed that in his opening Bush congratulated the "Democrat majority," although the prepared text said "Democratic majority," which is the preferred usage of the Democratic Party. Apparently Bush couldn't help but lob that insulting reference. A small point, perhaps, but illustrative of the man. -- JMC

From The Progressive Populist, February 15, 2007

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