Focus Point - Really Helping the UninsuredCommentary by Pete du Pont
March 23, 2000
I'm Pete du Pont with the National Center for Policy Analysis. Every year the federal governments "spends" about $125 billion in tax subsidies (read: Your Money) encouraging people to buy private health insurance. But the number of uninsured is 44 million and growing. How come? Because the subsidies actually cause people to decline insurance.
Right now, employer payments for health insurance are excluded from an employee's taxable income. So, government effectively pays half the cost of those families' insurance. But individuals buy their own insurance with after tax dollars; they have to earn twice as much to buy the same coverage. So millions roll the dice, and voluntarily go without insurance they can't afford to buy. Worse, people in the top fifth of earners get six times the help from the Feds as those in the bottom fifth. The lower the income, the greater the chance a family's uninsured.
So, let the Feds spend the money, but spend it fairly: individually purchased insurance should qualify for just as much subsidy as employer-purchased insurance.
Those are my ideas, and at the NCPA we know ideas can change the world. I'm Pete du Pont. Next time, political stereotyping.