Bush's proposal does nothing to address the 47 million Americans who have no health coverage at all. Sure, 3 to 5 million people who are self-employed, or whose employer doesn't contribute to their purchase of insurance, may now be able to afford insurance (a big plus for the insurance companies), but that still leaves us with over forty million people who don't have any coverage at all.
As Harvard scholar Rashi Fein, says:
But the problem is that if each of us purchases insurance for ourselves, insurance will be more costly. One reason: Because administrative costs per person are higher when you enroll people as individuals rather than enrolling larger groups (think what it costs to enroll all municipal workers as one group and what it costs if they were enrolled one at a time). Another reason: Because insurers will want to be compensated for the increased risk that those who sign up are individuals who are likely to need medical care who are not balanced off by others of lower risk – the problem of “self selection” in the absence of the law of large numbers. Furthermore, insurers will make it difficult, if not impossible, for persons with pre-existing conditions to enroll. After all, insurers are there to maximize returns for their stockholders, not to solve the social problem of universal insurance and access to health care.
Let me add that the “new” system would not solve the fairness problem. Today, higher income people get a bigger tax benefit as a consequence of our not taxing the value of the employer payment for premiums. But under the new system, the deduction would be worth more the higher your tax bracket. If you think of the value of the deduction as a subsidy to help you buy health insurance, it’s a subsidy of $0.00 if your family income is so low that you owe no taxes, a maximum of $2,250 (you won’t get much health insurance for your family for $43 a week) if you’re in the 15% bracket, and $5,250 if you taxable income is over $336,550 which puts you in the 35% bracket. So the rich still get more help than others.
Nor would “spending your own money” lead to lower prices and costs. Think of the consequences as the utilization of preventive care services decrease and early diagnoses are replaced by postponement of physician visits and later diagnoses. The President wants to tear down the house, but he’s not substituting a more efficient, fairer, and more comprehensive house that all of us could enter.
So, in the end, it's another handout for the insurance companies, while insuring that the uninsured remain that way. And it does nothing to address the issue of those uninsurable because of a pre-exisitng condition. No wonder a recent poll indicates that forty-nine percent of Americans don't trust Bush on health care, while only nine percent trust him a great deal.