 |
|
The Kosher Gourmet by Megan Gordon With its colorful cache of purples and oranges and reds, COLLARD GREEN SLAW is a marvelous mood booster --- not to mention just downright delish
April 18, 2014
Rabbi Yonason Goldson: Clarifying one of the greatest philosophical conundrums in theology
John Ericson: Trying hard to be 'positive' but never succeeding? Blame Your Brain
The Kosher Gourmet by Julie Rothman Almondy, flourless torta del re (Italian king's cake), has royal roots, is simple to make, . . . but devour it because it's simply delicious
April 14, 2014
Rabbi Dr Naftali Brawer: Passover frees us from the tyranny of time
Eric Schulzke: First degree: How America really recovered from a murder epidemic
Georgia Lee: When love is not enough: Teaching your kids about the realities of adult relationships
Gordon Pape: How you can tell if your financial adviser is setting you up for potential ruin
Dana Dovey: Up to 500,000 people die each year from hepatitis C-related liver disease. New Treatment Has Over 90% Success Rate
Justin Caba: Eating Watermelon Can Help Control High Blood Pressure
April 11, 2014
Rabbi Hillel Goldberg: Silence is much more than golden
Susan Swann: How to value a child for who he is, not just what he does
Susan Scutti: A Simple Blood Test Might Soon Diagnose Cancer
Chris Weller: Have A Slow Metabolism? Let Science Speed It Up For You
April 9, 2014
Jonathan Tobin: Why Did Kerry Lie About Israeli Blame?
Samuel G. Freedman: A resolution 70 years later for a father's unsettling legacy of ashes from Dachau
Jessica Ivins: A resolution 70 years later for a father's unsettling legacy of ashes from Dachau
Matthew Mientka: How Beans, Peas, And Chickpeas Cleanse Bad Cholesterol and Lowers Risk of Heart Disease
April 8, 2014
Dana Dovey: Coffee Drinkers Rejoice! Your Cup Of Joe Can Prevent Death From Liver Disease
Chris Weller: Electric 'Thinking Cap' Puts Your Brain Power Into High Gear
April 4, 2014
Amy Peterson: A life of love: How to build lasting relationships with your children
John Ericson: Older Women: Save Your Heart, Prevent Stroke Don't Drink Diet
John Ericson: Why 50 million Americans will still have spring allergies after taking meds
Sarah Boesveld: Teacher keeps promise to mail thousands of former students letters written by their past selves
April 2, 2014
Dan Barry: Should South Carolina Jews be forced to maintain this chimney built by Germans serving the Nazis?
Frank Clayton: Get happy: 20 scientifically proven happiness activities
Susan Scutti: It's Genetic! Obesity and the 'Carb Breakdown' Gene
|
| |
Jewish World Review
Jan. 29, 2007
/ 10 Shevat 5767
The tax-code quirk and the health care mess
By
Jeff Jacoby
| 
|
|
|
|
http://www.JewishWorldReview.com |
Wading into the fraught issue of health care during his State of the Union address, President Bush noted that for most Americans, "private health insurance is the best way to meet their needs. But many Americans cannot afford a health insurance policy."
Why is health insurance so expensive? One explanation is that the extraordinary gains medical science has made over the last few decades come with hefty price tags. The revolution in cardiac care, the myriad new drugs, the invention of CAT scanners and MRIs, the ability to transplant organs — these and so many other lifesaving medical miracles didn't come cheap. It stands to reason that insurance covering the cost of such miracles doesn't come cheap either.
But wait — *does* it stand to reason? Information technology has exploded in recent decades too, yet computers have never been as affordable as they are now. Agriculture is far more advanced, and the quality and variety of food available to consumers far greater, than they were 50 years ago, yet the real cost of food has plummeted. The price of a primitive color television in 1954 was equal to three months' wages for an average American worker; today that worker gets a sparkling picture on a 25-inch screen for just three days of work.
"Why is it," asks David Gratzer, a physician and scholar at the Manhattan Institute, "that in every other field where enormous technological strides have been made, total costs have fallen over time, but in health care they have increased?" The answer, he writes in The Cure, a lively and engrossing new book on the American health care mess, is simple: Health care costs so much because most of us pay so little for it. And we pay so little — out-of-pocket expenses amount to just 14 cents of every health dollar spent in this country — because a third party nearly always picks up the tab. For most working Americans, that third party is an insurance company paid by their employers. (For the poor and elderly who rely on programs such as Medicare and Medicaid, it's the government.)
Why does it matter whether Americans pay for medical care directly or let insurers cover their bills? Because thrift and price awareness usually go out the window when we're spending other people's money. Under the present setup, most Americans have little incentive to be economical consumers of health care. As a result, health care expenditures — and insurance premiums — have been racing ahead at three and four times the rate of inflation.
All of this is due to a quirk in tax policy dating to World War II, when employers looking for a way to enhance workers' salaries without running afoul of federal wage controls hit on the idea of providing medical benefits. When the IRS agreed not to treat such benefits as taxable income, it triggered a far-reaching change in the way Americans paid for health care.
What had been a relatively free market in medical services, with patients transacting directly with doctors and hospitals, gave way to a third-party system, in which employers paid the insurance companies, and insurance companies paid the bills. Americans increasingly used insurance to cover routine medical expenses, not just major unexpected costs like hospitalization or surgery. Imagine what automobile insurance would cost, writes Gratzer, "if people insisted on plans that had [low] deductibles . . . or policies that included not just major body work, but also oil changes and gas."
To properly disentangle this snarl, Congress ought to end the tax exclusion that causes it. Employers don't generally provide workers with homeowner's or auto insurance, or for that matter with food, clothing, or housing. Ideally, medical treatment would be handled no differently, and Americans would benefit from a far more robust and competitive healthcare market than they do now.
But after 60 years, it's probably infeasible to simply eliminate the tax deduction altogether, so the president has proposed a second-best alternative: eliminating the bias for employer-provided health insurance by giving every family with health insurance a $15,000 deduction ($7,500 for individuals) — no matter where their insurance comes from or how little it costs. Employer-sponsored insurance would become taxable income — but since most insurance policies cost less than $15,000, most employees would enjoy a significant tax break.
Under the Bush plan, the tax code would no longer penalize Americans who don't get health insurance through their employers, since they too would be eligible for the $15,000 tax deduction. Millions of others would have an incentive to shop around for a health plan less pricey than the one available through work, since cheaper insurance would end up meaning a bigger tax break. That would put pressure on insurers to develop more high-deductible, low-premium plans — and on health care consumers to start paying attention to prices.
Bush's prescription won't cure everything that ails American health care. But there's no question it would make an excellent start.
Every weekday JewishWorldReview.com publishes what many in in the media and Washington consider "must-reading". Sign up for the daily JWR update. It's free. Just click here.
Jeff Jacoby is a Boston Globe columnist. Comment by clicking here.
Jeff Jacoby Archives
© 2006, Boston Globe
|
|
Columnists
Toons
Lifestyles
|
