February 7, 2007

YOU'RE BLIND, I'M JUST NOT LOOKING (via Kevin Whited):

The Biggest Secret in Health Care (Holman W. Jenkins, Jr., February 7, 2007, Wall Street Journal)

President Bush might seem a candidate for OCD treatment, what with his insistence that the fix for health care is tax reform. He was at it again in his latest budget proposal, which calls for reforming the unlimited tax break for job-related health insurance.

Where does he get such ideas?

The answer: From every recent president that went before him, including Presidents Reagan, Bush and Clinton. And from all the wonks in wonkdom, who've long understood that the tax code was the problem and who've occasionally even shared this understanding with the public, most recently during the heady days before the Clinton health plan was submitted to a congressional dumpster. [...]

So Mr. Bush makes peace with the tax code's bias toward health spending in order to do battle with the particular vice of our overreliance on third-party payment. He does so by equalizing the tax treatment of health dollars whether they flow directly from a consumer pocket (the vehicle here is health savings accounts) or through a third-party laundromat.

He would do so by equalizing the treatment of health insurance whether you buy it yourself or your employer buys it for you (his latest plan). [...]

The pattern for that reform is already present between the lines -- towards greater reliance on saving than taxing, towards greater reliance on individual responsibility than on the illusory free-lunchism of government transfers. For the problem of Medicare is the problem health care writ small: The illusion that somebody else is available to pay our bills for us.


As Brother Whited points out, it's a surpassing odd piece in that so much that comes before is sensible until Mr. Jenkins himself is unable to make peace with the American people's bias towards a prescription benefit even though W used it get HSAs and precisely the kind of market pressures whose absence he's just been bewailing.

Posted by Orrin Judd at February 7, 2007 5:22 PM
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