Bush proposal to reform health care is right on target

Published 9:31 pm Monday, February 12, 2007

President bush has put forth the correct proposal to reform our health care system.

By offering each family a $15,000 tax deduction, the Bush plan provides the financial incentive to insure that all families get health insurance. The tax savings would pay the cost of the health insurance.

Individuals would get a tax deduction of $7,500, which would create enough tax savings to pay for an individual policy.

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Meanwhile, employer health plans would be taxed as income.

This will level the playing field. It will allow people to buy their own health plans without having to rely on employers to do it for them. There will no longer be any tax incentive for employees to get their health plans through their employers. They will be able to buy it themselves.

This will eliminate the disconnect that has created untold frustration. Health care is very personal and very important. Unfortunately, your employer is the one who decides the characteristics of your health plan: how much deductible, how much co-pay, how drugs are reimbursed. Employees just have to accept whatever their employer offers.

Under the Bush plan, this all changes. The tax deduction eliminates any tax incentive for employers to offer health benefits in lieu of salary. Employers can get back to the basics of paying cash and employees can then use that cash to buy whatever type health plan they so choose.

Over time, the individual health option will explode. Competition will create a huge variety of options and the consumer will be in charge of choosing — not the boss.

As an employer, I can’t tell you how frustrating it is to deal with medical plans. First of all, I am not a physician. I know little about health care.

But because our tax code doesn’t tax medical benefits, it’s better to offer employees medical benefits than salary. Salary would be taxed. Medical benefits aren’t. This 60-year-old distortion of the tax code has turned every business manager in the United States into a health care provider. It makes no sense.

An employer should provide employees a salary, plain and simple. Then employees can use that salary to buy what they want and need without interference.

I don’t tell my employees what kind of car to drive or house to buy or clothes to wear. Why should I tell them what medical plan to purchase?

By taxing medical benefits the same as income — and simultaneously allowing families a big deduction — the government gets companies out of the medical business while giving individuals and families the cash they need to buy their own plans. Now the consumer will be back in charge.

There should be no worry about families and individuals doing the right thing and purchasing health insurance on their own. If they don’t, they lose the tax deduction. A family would have to be crazy not to buy health insurance and waste the $15,000 tax deduction.

The deduction applies to payroll taxes as well as income taxes, so it will put tax savings in the hands of all families and individuals at all earning levels.

The Bush plan keeps individuals in charge. They get to pick the health plan, not the government. This is in contrast to Democratic plans to nationalize health care into one vast plan. Socialized medicine would mean no choice. Government bureaucrats would make all the calls.

It may take awhile for vibrant markets to emerge for individual health plans. Undoubtedly, it will take several years of transition. I have no doubt the free enterprise system will ensure a wide variety of choices for consumers. Look at how many choices there are for life insurance and car insurance. The same will one day be true of health insurance.

Do you want a plan that costs a bit more but lets you choose your own doctors? You’ll be able to buy it. Do you want a low-cost plan with a high deductible? You’ll be able to buy that. Do you want a plan the covers 100 percent of your drug charges, but limits which hospitals you can go to? You’ll be able to buy it. The choices will be unlimited and the tax savings from your $15,000 tax deduction will cover the cost.

One aspect of the Republican Party I really like is their preference for market-driven solutions. In contrast, the Democrats too often advocate ‘Big Government’ plans where bureaucrats make the decisions. Hilary Clinton’s ill-fated plan to socialize medicine would have been a nightmare. Thankfully, Americans completely rejected her plan as they learned more about it. The Hilary plan would have thrown doctors in jail for seeing a patient on their own without government approval. Sheez!

Back in the ’60s, it was the Democrats who were coming up with new ideas about how to make society better. Unfortunately, many of them didn’t work, but I appreciate their efforts to try something new and better.

Today, the reverse seems to be true. The Republicans seem to have great market-based ideas on how to reform Social Security and medical care, but the Democrats have become the conservative defenders of the status quo.

The Bush plan would vastly improve health care while putting the consumers in charge. It is absurd that I pick a one-size-fits-all medical plan for hundreds of employees. Heck, I can barely figure out the right plan for my own family.

Under the Bush plan, you’ll be able to fire your insurance company if they jerk you around. You can switch plans at will. Plus when you change jobs, it won’t affect your health plan.