Tuesday, January 23, 2007

Post on the Bush Health Plan

An editorial in today's Washington Post, normally no fan of the Bush administration, gives a favorable review to President Bush's health care proposal. An excerpt:
Generous insurance plans, which impose few restrictions on visits to specialists or on possibly redundant tests, inflate demand for medical services and push up prices for everyone; they help explain why the United States spends almost twice as large a share of its economy on health care as do most rich economies. By giving all insurance buyers a standard deduction, irrespective of the type of health coverage they choose, Mr. Bush would restrain medical costs and promote fairness. Because richer people tend to have more expensive insurance, the reform would slightly increase tax rates for people in the top fifth of the income distribution while slightly reducing tax rates for others, according to the White House.
The editorial includes an amendment to the proposal that the Congress should take seriously:
Rather than embracing tax deductions, which are most valuable to people in high tax brackets, Mr. Bush could have made his proposal even more progressive by recommending a refundable tax credit that would be worth the same to everyone.
If this plan (as revised to turn the deduction into a credit) does not command bipartisan support, nothing will.