Only one cheer for Bush proposal

Marketplace Staff Jan 24, 2007

KAI RYSSDAL: Every new public policy creates its winners and its losers. Commentator Robert Reich says when it comes to making winners of consumers, the president’s health care proposal deserves a cheer.

But just one cheer.

ROBERT REICH: The president’s proposal takes a step toward

decoupling health care from employment.

Under his proposal, everyone would be eligible for a tax deduction for health insurance up to the same amount. Regardless of whether the insurance is provided by the employer or purchased elsewhere.

And there would no longer be any advantage to getting it at work, because employer-paid premiums would be included in taxable income.

Get it? With this plan, you can just about kiss employer-provided health insurance goodbye.

And good riddance. It’s the biggest tax break in the whole federal tax system, but you’re not eligible for it when you and your family are most likely to need it. When you lose your job, for example. And the biggest beneficiaries of the current system are upper-income employees. The lower your pay, the less likely you are to get any employer coverage at all.

The system doesn’t cover the self-employed, the largest and fastest-growing category of worker. And it creates perverse incentives. It encourages employers to seek out young, healthy employees who are unlikely to have health problems; reject older ones; and push married employees onto their spouse’s employer’s plans.

Decoupling health insurance from employment merits only one cheer, though, because it’s only the first step.

Two cheers for the president or any politician who worries about lower-income people who can’t afford health insurance even with a tax deduction.

They need to be subsidized. It’s called universal health care. Every advanced nation has it except the United States.

And three cheers for the politician who bypasses America’s inefficient private insurance market and establishes a single payer. Not a single provider, you can still choose your doctor or hospital. I’m talking about a single payer that provides all Americans with health insurance just as good as the health insurance their representative in Congress receives free of charge.

President Bush’s one cheer marks the start of the 2008 presidential race. Affordable health care will be the biggest domestic issue in the upcoming election. The candidate who gets three cheers on this will be our next president.

RYSSDAL: Robert Reich is a professor of public policy at the University of California Berkeley. He was secretary of labor for President Clinton.

There’s a lot happening in the world.  Through it all, Marketplace is here for you. 

You rely on Marketplace to break down the world’s events and tell you how it affects you in a fact-based, approachable way. We rely on your financial support to keep making that possible. 

Your donation today powers the independent journalism that you rely on. For just $5/month, you can help sustain Marketplace so we can keep reporting on the things that matter to you.