NCPA - National Center for Policy Analysis


January 30, 2007

President Bush's health care proposals would help remove some of the distortions that have plagued the health insurance market for nearly 60 years, says John C. Goodman, president of the National Center for Policy Analysis (NCPA).

First, the plan would level the playing field for low-income workers and those who purchase insurance on their own:

  • The plan provides a standard tax deduction of $15,000 for families and $7,500 for individuals who have insurance, regardless of how that insurance is purchased and regardless of the cost of the insurance. 
  • Wage earners, for example, will be able to avoid income and Social Security taxes on the first $15,000 or $7,500 of earnings as long as they have minimal coverage.

The plan also seeks to bring equality between private insurance and charity care, says Goodman.  Currently, the level of charity care brings great inefficiency to the health care system:

  • An NCPA analysis estimates that year-round uninsured people in the United States get about $1,500 of free care per year, on the average, or $6,000 for a family of four. 
  • Safety net care is generally much less efficient; for instance, uninsured patients often use emergency rooms to provide care that is more economically provided in a free-standing clinic.
  • As a result, per dollar spent, the privately insured patient typically gets more and better care. 

President Bush's plan would allow states to redirect about $30 billion of federal funds that currently fund care for the uninsured and use them instead to help people buy private health insurance.  As a result, more people would be insured, the insurance they have would better suit their needs, and fewer people would rely on the social safety net.

Source: John C. Goodman, "The Bush Health Plan," Brief Analysis 578, National Center for Policy Analysis, January 30, 2007.

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