Tonight will certainly be something new for President Bush – it’s his first State of the Union speech to a Democratic Congress. More to the point, perhaps, he’ll be addressing a restless public, unhappier by the day with his Iraq policy.
We’re told Iraq won’t dominate the president’s remarks. He’s expected to focus on some domestic concerns, among them an initiative on health insurance.
With some 48 million Americans uninsured – 770,000 in Colorado alone – universal health coverage is a festering issue that is gaining serious attention. The president’s plan is to give tax breaks to people who buy modestly priced plans out of their own pockets and to cover the cost of those breaks by establishing a new tax on a portion of higher-priced coverage that some workers receive from their employers.
The goal is to create a financial incentive for people who lack health insurance to buy it, and at the same time to activate a market mechanism that could reduce the soaring cost of health insurance by taxing workers in higher-priced plans and so prodding them to seek cheaper coverage.
We’re glad to see that the president is finally talking about helping Americans get health insurance, but we’re not convinced that going through the tax code is the best way to get there.
And some who’ve studied the issue fear that Bush’s idea could have a nasty side effect. Rep. Pete Stark, a California Democrat who chairs a key Ways and Means subcommittee, thinks such a plan could encourage employers to drop health insurance, jeopardizing coverage for 160 million Americans.
In the absence of federal action on health care, state officials are seeking their own solutions. Massachusetts, Vermont and Maine already have plans to offer near-universal health coverage. The governors of California and Pennsylvania both unveiled important initiatives in recent weeks. Colorado Gov. Bill Ritter has made comprehensive health reform a top priority.
Tonight, the president is expected to call for families who buy low-cost policies to have their taxable income reduced by $15,000, regardless of the cost of the plans. The deduction would be $7,500 for single individuals. Workers who receive employer-provided health insurance would pay tax on the cost of coverage above $15,000.
The president is also likely to propose divierting some federal money to states which have programs for covering the uninsured.
We commend Bush for paying attention to the problem. It will be up to Congress to determine whether a tax-shifting concept really makes sense.
