Deconstructing the Bush Healthcare Plan

DECONSTRUCTING THE BUSH HEALTHCARE PLAN….Two people who are smarter than me explain why Bush’s healthcare proposal isn’t a starting point for compromise, but instead an invitation to step off a cliff. First, Paul Krugman:

Now here’s the thing: in the name of consumer-directed health care theory, Bush is proposing changes that would essentially encourage people to move into the individual market — which wastes a lot of money, and doesn’t and can’t work for those most in need — while undermining the employer-based system, which isn’t wonderful but is still essential. In particular, healthy high-income people would be encouraged to drop out of employment-based plans, leaving behind a sicker risk pool, driving up rates, and pushing employer-based care in the direction of an adverse selection death spiral. [Bush’s plan] doesn’t sound big enough to have catastrophic effects, but it’s a step in the wrong direction.

And Jonathan Cohn, whose book on the American healthcare system I’m eagerly awaiting:

At least on health care, the speech I saw was not an invitation to bipartisan cooperation. On the contrary, for all of the evening’s rhetoric on bipartisanship, the policy grist was strikingly similar to what he’s said in past State of the Union speeches — an effort to remake medical care along the lines of conservative ideology.

….Yes, the Bush administration put itself on record as supporting a tax increase — and that was part of what made the proposal seem like such a breath of fresh air….But then the rest of the details started to come into focus — chief among them the fact that, in encouraging the demise of employer-sponsored insurance, the administration had no plans to create a suitable alternative in its place. After all, a lot of people are going to have a hard time finding insurance in the individual market. Not only do costs run higher there, because the administrative overhead is higher, but insurers offer coverage and adjust premiums based on health condition–to the point where people with preexisting medical problems simply can’t get decent coverage at all.

….Serious proposals to improve access to health care generally take this problem head-on….The administration plan–as fully fleshed out tonight — offered nothing along these lines….[It] is classic conservative ideology, which insists that private insurance is always preferable to public — even though public insurance is actually more efficient and, particularly when it comes to the financially and medically needy, the only reliable option.

Read ’em both to get a better idea of what’s really going on here.