An Interesting Health-Insurance Plan by Republicans? (Has Hertzog Lost His Mind?)

Health care coverage is going to be a major issue in the 2008 election.  And I believe that this nation will have some sort of health care program that will cover almost everyone by the end of our next president’s term (no matter which party wins the White House).   

A number of health-insurance plans are being touted by the various candidates for president.  I’m going to tell you about one that I think should be given a closer look.  I’m not ready to give unqualified support to this plan, but I think this plan might have some merit.  

Now hold on to your seats, those of you who read what I regularly write here, because this plan comes from the Republican Party.  I learned of it by reading the Republican Party’s web site.  

To start, here’s a little history.  Our current employer-provided health-insurance program started back at during WWII.  The government had ordered strict wage controls, so employers provided health insurance to workers in lieu of wage increases.  After the war our government (in order to give employers an incentive to continue giving health insurance) gave employers who provided health insurance a tax break for doing so.  The tax break to employers does not cover the entire cost of health care but it helps.     

However there are a lot of problems with an employer-based system.  First, it limits people’s choices.  You have to take what your employer offers.  Second, this sort of coverage makes costs rise, because people with insurance are less careful than if they were paying for health care out of pocket.  Third, people lose their coverage if they quit or sometimes when they change jobs.  Fourth, people often lose coverage when they retire.  Of course, Medicare might take over for retirees. 

Most Democrats want to leave the employer-based system in effect and expand the Medicare and Medicaid programs to fill in the gaps.  This may work but the Republicans have an idea at which we should look. 

The Republican idea is for the government to give the same tax break to individuals that it gives to employers, if these individuals will pay for their own health care.  People would have a choice.  They could buy into a health-care plan that offered similar coverage to an employer-based program.  They might also elect to purchase a cheap health-insurance plan that provided coverage serious illness and pay for routine care out of pocket.  Cost-concerned people would help hold down health care costs. 

There may be some problems with this idea.  First, we would have to work out the level of the tax break individuals would receive.  Would it be enough to allow them to purchase health-insurance adequate to their needs?  Would this program completely destroy the employer-based system?  That might be a problem.  There may be other problems that I have not considered.  However, the plan seems interesting to me.  I suggest that democratic candidates take a close look at this proposed plan, because I suspect we will hear a discussion of it as our election campaign continues. 

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