Smarter Health Care Reform

John C. Goodman, president of the National Center for Policy Analysis, points out some things to avoid in health care reform efforts:

- Do not turn a tax subsidy for health care into an entitlement; Medicare and Medicaid entitlements are already on a course to crowd out every other government program -- we cannot survive creating more health care entitlements.

- Avoid mandated insurance coverage and mandated benefits; proposals to require everyone to have health insurance increase the likelihood that the government subsidy will become an entitlement.

- Don't create perverse incentives for health plans; if people can switch insurance plans annually at premiums that are unrelated to expected costs, the plans will seek out the healthy and avoid the sick.

- Don't encourage people to forgo private coverage by expanding public coverage; there should be no expansion of Medicaid or the State Children's Health Insurance Program in a way that encourages people to drop their private coverage in order to get free public coverage.

The NCPA also points to a piece by Allan B. Hubbard entitled "A Tax Cure for Health Care" in today's Wall Street Journal which points out the tax breaks available to people who get health insurance through their employer--that those who have to buy their own just don't get.

The piece says President Bush has a plan to help with this problem:

Under his plan, every family with private health coverage would receive a standard tax deduction of $15,000 -- no matter where they get their health insurance.

This deduction would encourage more people to buy their own health insurance, just like the mortgage interest deduction encourages more people to buy their own homes.

Some have suggested that a flat tax credit could also achieve the president's goal of leveling the playing field and he has signaled that he would be open to that option.