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Ron Diagnoses Hill
Reason science writer Ron Bailey takes apart Hillarycare, version two, and finds she's misdiagnosed the problem with our healthcare system:

The chief broken part of health insurance in the United States is the faltering system of employer-based health insurance. Since 2000, firms offering their employees health insurance have dropped from 69 percent to 60 percent. Clinton's plan maintains the employer-based insurance system by mandating that large employers continue to buy health insurance for their workers.

Thanks, I'll take Bushcare, untied from the workplace, and non-discriminatory against self-employed people like me. From CNN:

How would it work? Everybody who buys health insurance, whether through work or independently, would get a standard deduction of $7,500 for individual coverage and $15,000 for family coverage.

This standard deduction would be available to everyone, whether they itemize on their tax return or not. And you can take the full deduction even if your health plan costs less.

So if you paid $10,000 for family coverage, you could still deduct $15,000.

The proposal differs from current law in two key ways: 1) under current law, people who buy insurance on their own typically don't get a tax break at all; under the proposal they would; and 2) those who are insured through work can currently buy coverage with an unlimited amount of tax-free money. Under the proposal, a limit would be set.

A primary goal of the proposal is to level the playing field, in terms of tax breaks, between those who buy insurance on their own and those who buy it through an employer.

Bailey continues taking apart Hillarycare below:

...Sen. Clinton compares her health care plan to the mandate that all drivers carry car insurance. But it's a bad comparison. Employers don't buy their workers' car insurance or home insurance. Why should they buy their employees health insurance? When someone leaves his or her job, they don't have to change or lose their car insurance. It's portable. A modern health insurance system would really make insurance the personal responsibility of each American.

...How would Clinton make sure that everybody complies with the new mandate? A Clinton campaign spokesperson, Laurie Rubiner suggested that one penalty could be the loss of the standard deduction on their income tax filings. This would mean that the IRS would have to monitor compliance.

Individual mandates could be the cornerstone of a complete privatization of health insurance, giving consumers more choices and much greater control over their health care needs. The first step is allowing employers to pay workers the money the companies have been spending on health insurance. Workers could then buy health insurance fitted to their own specific needs, not the bottom lines of they firms for which they work.

For Americans who can't afford health insurance, why not offer them vouchers so that they can buy their own private health insurance? Such income-based vouchers would be self-enforcing since recipients could spend them only on health insurance and health care. The vouchers could be paid for by reprogramming funds now spent on government programs like Medicaid and the State Children's Health Insurance Programs.

In such a thoroughly privatized system, Herzlinger argues, consumers who would now experience directly the actual costs of their medical insurance and medical care will begin to drive down those costs, just as they do in other markets. Right now health insurance is made more expensive by some 1800 state and federal mandates. "It's like I'm shopping for a car and my state mandates that all cars have heated seats," says Herzlinger. Car buyers would not long stand for a heated car seat mandate that raises the price of a car by $1,000, and similarly individual health insurance shoppers would object to unnecessarily expensive insurance mandates.

As I've said before, because I don't currently get my healthcare through The Man, but through the girl's checking account -- this girl's -- I'm very connected to what it costs, and whether to pay for those metaphorical heated seats. (My answer: I went for the unheated seats at Kaiser Permenente and paying my assistant better.)

Government is already way too meddly in our lives. Plans to squeeze employers further will neither help the economy or help sick people. Employers will simply hire fewer people -- or, as Bailey points out, ditch employees in this country who'd require health care by law and hire those in India and other countries who don't. Then all those American employees will not just be out of health care but out of a job. Free mental health care next on Hill's agenda? (Free, as in the rest of us pay, the unemployed don't.)

Posted by aalkon at September 19, 2007 10:56 AM

Comments

Hillary sat for an interview on Nat'l People's Radio yesterday and one of the first cream puff questions Melissa Block served up was Giuliani's characterization of her plan as a step towards socialized medicine.
She had obviously been rehearsing the laugh she used to sweep aside the socialized medicine label as unworthy of reply. Not too loud or long, but more than a dry chuckle.

Of course this is socialized medicine. Hillary-care will further entrench the IRS into the daily lives of ordinary people and make tax reform even less likely than it already is.

Even as a home owner and a parent, I'd like to see the end of the mortgage interest credit and dependent child deductions. Hillary-care will add an entire set of forms to a bloated tax return that really should fit on a post card for most taxpayers.

The description of "unlimited tax-free money" above is sickening. First, it is not tax-free, it is pre-tax and only pre-federal income tax at that, it gets taxed plenty. And it is as limited as any other dime that passes through any person's hands. It is our money, why should anyone be able to describe it as "unlimited" as though this were some dangerously unregulated situation?

If most people's taxes were not withheld from their pay, if they really had to write a check to pay their tax bill each year, there would be a revolt to make the storming of the Bastille look like a parking tiff.
The counter proposal above, health insurance vouchers, must have been offered wryly. "Vouchers" has been the third rail of education reform for years and it will be the next Hillary laugh-line once her opponents learn to stop pushing the Socialized Medicine button.
Hillary and her like want more control over your earnings and your daily life. Health care is a mess because it is over regulated and insulated from market forces. It is a basic human need and society has an obligation to make provisions for those who can't afford it. But food is also a basic human need and we have reasonably successful programs to feed people. We don't have mandatory federal grocery insurance.

Posted by: martin at September 19, 2007 7:19 AM

Regarding the "unlimited tax-free money," Bush's plan would put an end to that.

And note who's been getting this perkie-werkie:

2) those who are insured through work can currently buy coverage with an unlimited amount of tax-free money.

This means that I, as one of a growing number of self-employed people in this country, am discriminated against financially, and have been for the entire time I've been an entrepreneur, which is most of my working life.

Why? I pay taxes just the same (and more, in fact, as a self-employed person) than those who have a job with somebody else. And I employ two people part-time -- my editorial assistant and my bookkeeper.

I pay quarterly taxes in addition to the amount I pay on April 15. It's not fun, let's just say.

Wise words, Martin. And I always love people who are benefiting from a sick system but have the ethics and sense to call it for what it is.

Posted by: Amy Alkon at September 19, 2007 7:42 AM

The way I see it, I am not benefiting at all. Mortgage rates and housing costs are set by a market that takes the deduction into account. Take away the "deduction" and rates and costs would more accurately reflect the housing and money supply.
Why the FedGov "lets" me keep a few grand because of my little carpet monkeys is a head-scratcher. Sure they MIGHT grow up to be productive members of society and support people like you and me in our retirement but, uh, they also might not. And aren't child-free folks like you just as likely to mentor some promising urchin, creating a productive citizen in the end?

Paying people to have children gives some of them the notion that they are partners in parenting with the government. They shrug when the schools suck, they shrug when their kid flings peas at that fetching red-head at the next table in the restaurant. I am responsible for my children. I make big sacrifices for them and I want what -I- think is best for them. Of COURSE I'd rather pay my own bills and tell Hillary to go pound sand.

Posted by: martin at September 19, 2007 8:08 AM

Paying people to have children gives some of them the notion that they are partners in parenting with the government. They shrug when the schools suck, they shrug when their kid flings peas at that fetching red-head at the next table in the restaurant. I am responsible for my children. I make big sacrifices for them and I want what -I- think is best for them. Of COURSE I'd rather pay my own bills and tell Hillary to go pound sand.

With you all the way on this, martin! I firmly believe that Hillary and her ilk are counting on the gullibility and stupidity of the voting public.

Posted by: Flynne at September 19, 2007 10:05 AM

I'm there with you, too. At least we know whose kids WON'T be carjacking us and on the dole for dollars for rehab.

Posted by: Amy Alkon at September 19, 2007 10:10 AM

Amy, I've only been reading your column for a couple of months -- maybe you have already answered this: what would you propose to end the current medical mess the country is in, and get into private paying? Seems to me there are way too many people now relying on gov't supported programs like Social Security and such to just be able to drop them.

I personally don't believe in medical insurance at all -- I think it has created the huge pork barrel that the pigs are wallowing in now. I'm not sure that prices for care would ever come down if we had a pay-as-go system but it would at least eliminate the vultures.

Posted by: JA at September 19, 2007 1:14 PM

Insurance is a protective measure against catastrophes. That's the problem with pay-as-you-go. The very rich could maybe afford treatment for lung cancer, for example, but other people would just die (or suck off the public hog). I pay for much more than I expect to use with Kaiser, and it's for precisely that reason. If I become seriously ill, I will be covered. It's personal responsibility, the betting version.

People will start living very, very long lives, and Social Security is going to be in a major mess -- more than it already is -- unless people also start retiring and going on it at 90 instead of 65.

Posted by: Amy Alkon at September 19, 2007 1:26 PM

The only comment I have, since I have so called 'free' health care in Canada, is that people here should be charged a nominal user fee of $20 to see a doctor.

From what I've observed from my parents, who are both hypochondriacs and visit their GP 3 times a week for any and every little thing, a $20 user fee would make them think twice. It would not be enough to stop people from going if they really needed to, but it would cut down on the nuisance visits. The doctor doesn't care one way or the other, because he/she is billing the government for his/her time in 15 minute chunks.

Posted by: Chrissy at September 25, 2007 12:21 PM

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