The Ownership Society Strikes Again
The President proposes tax deductions up to $15,000 for a family that they can use towards purchasing a health insurance policy. Of course they will, Mr. President. I’m sure that this is the first thing a family will put on their shopping list when this windfall arrives at their front door. I’m betting that the family would use it for a vacation to Hawaii, a very nice down payment on a gas-guzzling SUV, or the biggest mother of all flat screen televisions.
He believes that this money will provide incentive for people to purchase health insurance at a lower cost. You don’t have a clue at all do you, Mr. President? Most Americans who have health insurance have it through their employers, who normally only offer one type of group policy, take it or leave it. There is little or no choice for most American workers. Yes, there are some policies that offer a high and a low plan, with differences in percentages paid out, but the premium difference for the employee is perhaps a few dollars per paycheck.
The group policies are formulated to insure a large group of people, many of whom are not healthy. The insurance companies are able to maintain affordable rates for everyone on the backs of the healthy employees. The reasoning is that the money saved on their fewer claims will make up for any losses claimed by the chronically sick employees. The alternative is individual coverage, which would not have this nice blanket protection for well and sick employees offered by a group policy. The healthy would be able to afford an individual policy; the chronically sick wouldn’t get coverage at all. I will admit that this an overly simplified explanation of group health insurance, but several commentators have raised this point since the idea was presented last week.
The Bush administration believes that this plan would extend health coverage to 3 million or so Americans. It is estimated that there are 47 million Americans without coverage today. On the news show This Week with George Stephanapolous, commentator George Will immediately loped off 10 million as being illegal immigrants. Okay, so let’s do the math...37 million minus 3 million equals...hmm, Mr. President? What about the other 34 million people? Is this where we insert the old Dickens line, “Are there no work houses...?” How can we dismiss the health needs of this many people?
George Will also raised the point that if everyone purchases their own policy, then employers will not be obligated to offer insurance at all. He noted that this would have a significant effect, for example, on the auto industry. The sticker price on new cars would be $1,000 if the automakers did not have to offer health coverage to their employees. Millions of Americans don’t have health insurance and the only thing George Will sees is a lower price at the car lot. Thank you, Mr. Will! Your compassion for the average American worker is duly noted!
This is not a good time for the health insurance industry. If the worst case scenarios play out, group health insurance could become a thing of the past. This could mean massive layoffs in the industry, many more Americans with no coverage because of their chronic conditions and more people relying on Medicaid and Medicare to meet their health needs. I don’t want to sound selfish, Mr. President, but this would be two strikes against me: an 18 year employee of the health insurance industry with a heart condition. This new proposal of ownership from the President is not doing my heart any good, and I think the Democrats in Congress agree.