after four long years under bush, with health care costs rising and the ranks of uninsured growing, i expected basically more of the same in the second term: further neglect of a decaying health insurance system.
but the administration's tax reform proposals actually manage to go beyond the pathetic status quo. as atrios notes bush's tax reform package includes scrapping the business deduction for employer-sponsored health insurance. considering that this country's entire health care system is based on the assumption that health insurance will be provided by employers, the adminstration's proposal goes beyond mere neglect of a broken system. it constitutes a conscious attack.
even before bush's tax proposal, the health insurance system in this country was spiraling downward towards disaster. as the ranks of uninsured grow, less premiums are paid to insurance companies. although fewer insured means fewer claims paid out, it also cuts into the company's profits. to make up the loss, insurance companies raise premiums, thus encouraging more employers to drop coverage of more employees, which starts the cycle again.
with each cycle, there are more and more uninsured people. this creates another form of pressure on the system from a different direction. when uninsured people get sick, their only recourse is the emergency room. the emergency room, however, costs approximately three times as much as treatment of the same illness on a non-emergency basis. because there is no insurance company to reimburse the hospital, little, if any, of this money is collected. so, to absorb the cost, hospitals raise their bills, which cuts into insurance company profits and causes premiums to rise again, which causes more employers to drop coverage of their employees.
these two cycles feed off of one another and each makes the other worse. the present system is unsustainable, even without any changes to the tax code. but bush's tax plan makes it even less economical for employers to insure their employees and accelerates both cycles i described above. the number of uninsured will spike as a direct result of this proposal
put in plain english, scrapping the business tax deduction is a pretty stupid fucking idea that will cause a lot of people to lose their health insurance. not only that, it's incredibly short-sighted if you're committed to private health insurance in this country (as bush is). the u.s. is notoriously suspicious of government services, it seems to be our most distinguishing feature of americans among citizens of other countries in the developed world. government-run health care is a hard sell here. just look at clinton's plan, which wasn't even a real government takeover of health insurance and would have allowed private health plans to continue. but even the hint of government control was enough to kill the plan and discredit serious health reform in this country.
after the clinton plan failed, plausible scenarios for passing real health care reform have been hard to come by. but bush may have found a way with this tax proposal. when the bottom finally drops out of the health care system, americans will probably drop their resistance to a government takeover. after all, having government make decisions about your health care seems more scary if you have access to health care. it doesn't sound all that bad if you don't and it means you can visit your doctor without going broke.