Allan Hubbard, President Bush's Chief Economic Adviser, offers an alternative to Democrats' (and sadly, some Republicans') big government plan for health care in today's Wall Street Journal.
Option A:
The Baucus-Grassley proposal would expand Schip to cover many children who are not actually poor. A family of four making $82,600 would be eligible for taxpayer-funded health insurance.
It would also cause many people to drop their good private coverage and move to taxpayer-funded, government-run health care. In fact, the Congressional Budget Office has estimated that for every two people who would join Schip under this bill, one would drop his/her private health insurance -- a striking example of "crowd-out" that is contrary to the purpose of the program.
Finally, this bill would run up a huge tab -- $71 billion over 10 years -- and would impose new tobacco taxes to pay for it...
So President Bush has proposed to level the playing field for health insurance. Under his plan, every family with private health coverage would receive a standard tax deduction of $15,000 -- no matter where they get their health insurance. This deduction would encourage more people to buy their own health insurance, just like the mortgage interest deduction encourages more people to buy their own homes...
More than 100 million people who are now covered by employer-provided insurance would see lower tax bills right away. Those who now purchase health insurance on their own would get a tax benefit for the first time. And millions of others who have no health insurance would be able to purchase private coverage...
Take your pick.
(Note: Our readers should not confuse Allan Hubbard with Glenn Hubbard, Mitt Romney's economic adviser - as I did.)
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