Paul Krugman takes a look at president Bush's latest plan for health care:
Gold-Plated Indifference, by Paul Krugman, Bush and Health, Commentary, NY Times: President Bush’s Saturday radio address was devoted to health care, and officials have put out the word that the subject will be a major theme in tomorrow’s State of the Union address. Mr. Bush’s proposal won’t go anywhere. But it’s still worth looking at his remarks, because of what they say about him and his advisers.
On the radio, Mr. Bush suggested that we should “treat health insurance more like home ownership.” He went on to say that “the current tax code encourages home ownership by allowing you to deduct the interest on your mortgage... We can reform the tax code, so that it provides a similar incentive for you to buy health insurance.”
Wow. ... Going without health insurance isn’t like deciding to rent an apartment instead of buying a house. It’s a terrifying experience... The uninsured don’t need an “incentive” to buy insurance; they need something that makes getting insurance possible.
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... Again, tax deductions won’t solve their problem.
The only people the Bush plan might ...[help] are the people we’re least concerned about — affluent, healthy Americans who choose voluntarily not to be insured ... while in the process — whaddya know — giving many other high-income individuals yet another tax break. ...
Mr. Bush is also proposing a tax increase ... on workers who, he thinks, have too much health insurance. 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.”
Again, wow. 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?
According to press reports, the actual plan is to penalize workers with relatively generous insurance coverage..., we’re ... talking about ordinary workers who have managed to negotiate better-than-average health plans.
What’s driving all this is the theory, popular in conservative circles but utterly at odds with the evidence, that the big problem ... 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. ...
I’m somewhat skeptical about health care plans, like that proposed by Gov. Arnold Schwarzenegger, that propose covering gaps in the health insurance market with a series of patches... But at least the authors of these plans are trying to help those most in need, and recognize that the market needs fixing.
Mr. Bush, on the other hand, is still peddling the fantasy that the free market, with a little help from tax cuts, solves all problems.
What’s really striking about Mr. Bush’s remarks, however, is the tone. The stuff about providing “incentives” to buy insurance, the sneering description of good coverage as “gold plated,” is right-wing think-tank jargon. In the past Mr. Bush’s speechwriters might have found less offensive language; now, they’re not even trying to hide his fundamental indifference to the plight of less-fortunate Americans.
Update: Please see Krugman's "Additional Notes on Gold-Plated Indifference" explaining some of the economics behind the points he makes in this column.