In his State of the Union Address this year, President Bush proposed letting people who buy insurance for themselves qualify for the break too. The Congressional Budget Office estimates that his plan would help 7 million people who don’t have insurance get it. But its main point is to offer individuals more control over their health care–to make it possible, for example, for them to keep their policies when they switch jobs.
Free-market health-care experts note that most types of insurance–think of homeowners’ insurance–cover major expenses that have a low likelihood of happening to any individual rather than routine and predictable expenses. Thanks to the existing tax break, health premiums have become a way of prepaying for medical care. Under Bush’s plan, a lot of people would buy cheap insurance policies that cover emergencies while paying for routine care out of pocket. Cost-conscious consumers could drive down the price of health care.
Rudolph Giuliani has adopted elements of Bush’s plan as his own. Mitt Romney and John McCain also have plans that would reduce the tax code’s favoritism toward employer-based care. …
The Democrats have hardly noticed the turn in Republican thinking on health care, in part because the Republicans seem so weak right now. But the Democrats have already started to emphasize how incremental and unthreatening their plans are. In the months to come, look for them to start accusing Republicans of being radicals who want to end health insurance as we know it. The accusation will be true.
Case in point,
Democratic party spokesman economist New York Times columnist Paul Krugman rants against “apologists for the status quo,” i.e. Republicans such as Rudy Giuliani, and Greg Mankiw, who was featured in the Times on Sunday (more on Krugman’s latest diatribe here and here).
The “big lie” put out by Krugman and others is that advocates of free-market health care (including some Republican politicians) want to preserve the status quo, rather than transform the system. And in addition to ignoring the facts about US health care being superior to care in other nations, he ignores the huge gap in quality between private coverage (which free-market advocates and Republican candidates want to expand) and government coverage (which Krugman and Democratic candidates want to expand).