Giuliani’s Goal is to Stop, Not Achieve, Universal Health Care

As I and others have previously noted, there is no substance to Rudy Giuliani’s health care plan. Jonathan Cohn attempts to write about the plan for The New Republic but finds little there:

… it’s just a two-page summary of Giuliani’s general approach to reform–which, from the looks of it, is closely modeled on an idea President Bush proposed in January of this year. While there may be some differences between the two–it’s impossible to know, since the campaign isn’t getting into such details–it’s fair to judge Giuliani’s proposal based on the verdict experts rendered when Bush trotted out his idea. And that verdict wasn’t too good. At best, the Bush plan would have made only a small dent in the number of people without insurance–at a time when even other Republicans were endorsing far more sweeping schemes. And at worst? It could have resulted in more people struggling with their health bills.

Since that time, of course, two of the leading Democratic candidates (John Edwards and Barack Obama) have published detailed proposals of considerably greater ambition, with a third (Hillary Clinton) likely to follow soon. By that standard, Giuliani’s proposal seems even more diminutive. But does that bother the former mayor? Probably not. In the last few days, he’s spent as much time trashing those Democratic ideas as promoting his own. For Giuliani, you get the feeling, it’s all about what his plan isn’t (Michael Moore, Cuba, “socialized medicine”) rather than what it is. Or, to put it more bluntly, it’s about stopping universal health care–not achieving it…

he central feature of Giuliani’s proposal would be a tax deduction of up to $15,000, available to all Americans who buy an insurance policy–regardless of whether they buy it on their own or through an employer. That’s a change from the present setup, in which only people who buy coverage through employers get the break.

Making the tax treatment of individual insurance more like that for employer insurance could have far-reaching effects. Most experts agree that the tax break for employer-sponsored insurance has been instrumental in propping up our existing health insurance system, in which it’s assumed most working people will get coverage through their jobs. That’s been particularly true in the last few years, as employers have grown weary of bearing such a huge financial burden on behalf of their workers. Reducing or eliminating that preference will likely weaken the system further, because–as fewer workers demanded such coverage–even fewer employers would provide it.

In principle, that would be just fine–employer-based health insurance is nobody’s idea of a perfect system–just as long as Giuliani proposed to create something in its place. But there’s no such effort from Giuliani. Instead, he’d just let people shop around in the individual insurance market, buying whatever policies they could find.

And here’s where the problems start. People with pre-existing conditions–and if you have even a minor condition, like allergies, that means people like you–frequently can’t find affordable coverage because insurers won’t offer it. (Or, if they do offer coverage, it will be prohibitively priced.) Giuliani hails his approach as giving consumers more choices. But for these people, it’d actually mean less choice–or no choice at all.

That’s one reason that, at the end of the day, Giuliani’s plan is unlikely to make a significant dent in the uninsured. Another is that tax deductions, by definition, are worth less to people who are in lower tax brackets–who, as you might imagine, tend to make up the bulk of the people without health insurance. In a recent analysis of the latest Bush proposal–on which, again, the Giuliani proposal is patterned–the Center for Budget and Policy Priorities noted that married couples with taxable incomes between roughly $15,000 and $60,000 (the second lowest tax bracket) would get a tax break of $2,250. That’s not chump change, for sure, but when group coverage for the average family costs $12,000–and when individual coverage costs much more than that, as it does because of higher overhead and marketing expenses for insurers who sell to that market–it’s easy to see why few analysts think it will enable many more people to buy coverage.

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1 Comment

  1. 1
    JollyRoger says:

    There is no substance to Rudy at all. He’s the kind of guy who could almost have us longing for Chimpy.

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