Thursday, August 02, 2007

Giuliani's (Non) Health Care Plan

Presidential hopeful Rudy Giuliani released details of his health care plan this week, which really fails to help the uninsured and more or less parrots the ideas of the Bush administration. Ezra Klein discusses it over at American Prospect - A Man With a (Non-)Plan - and says, "Rudy Giuliani's health care "plan" is less a good-faith reform proposal than a cudgel with which to bash liberals."

Klein bases that opinion on the following:
In the speech introducing and detailing his new health care proposal, Giuliani refers to the "Democrats" six times. "Single-payer" is said eight times. "Socialized medicine," or some variant thereof, makes nine appearances. "Uninsured" is never uttered -- not once.
So, what does Giuliani's plan actually offer?
A tax exclusion of up to $15,000 for families, and $7,500 for individuals, to help pay for health care. What Giuliani is relying on is people reading those numbers -- $15,000 and $7,500 -- without noticing that they don't denote the amount of money he's offering them, but the amount of money he's not taxing them on. And when we plug it into my magical Rudy Translation Machine (constructed with the help of friendly neighborhood economist, Dean Baker), we can watch how $15,000 can easily become … zero.

Let's stipulate a family of four -- a mom, a dad, and two children. The type of family Republicans like. And let's say your household income is $30,000 a year. Giuliani's tax exclusion will save you … nothing. Your income isn't taxable anyway. Bring it up to $40,000 … and it's still nothing. Your child tax credits are crossing out your taxable income. Indeed, according to the Center for Budget and Policy Priorities, 55 percent of the uninsured don't earn enough money to have any taxable income. This proposal -- unless changed from a straight exclusion to a refundable tax credit -- will do literally nothing for them.

Don't get me wrong, some families will save a few bucks. If you make $50,000, Giuliani's exclusion will save you $1,220. And if you make $70,000, you'll get a whopping $2,250. And the higher up the income ladder you go, the more our hypothetical family unit will save. Meanwhile, here's the kicker: According to the Kaiser Family Foundation, in 2006, premiums for family coverage amounted to, on average, $11,480. Giuliani's giveaway barely makes a dent.

So it's no surprise that Alan Cohen, head of Boston University's Health Policy Institute, looked at Giuliani's "vision" and said, "I don't think it's likely to increase coverage of people to any great extent, and I don't think it's going to get a handle on health care cost inflation in this country."
Schemes based around tax subsidies just don't work according to Klein, and he backs that opinion up with research from the RAND Corporation who recently examined whether government subsidies could solve the problem of the uninsured.
They researched the health care decisions of nearly 25,000 new health care subscribers in California. Their conclusion? "Government subsidies that cut health insurance premium prices in half for people without insurance would reduce the number of uninsured Americans by just 3 percent."
Three percent? That's no solution, Rudy.

The Center on Budget and Policy Priorities also examined whether tax incentives would be an effective way to expand health coverage and came up with a similar conclusion:
[...] proposed tax subsidies for the purchase of health insurance would likely be of little help to most low-income families, given the high premiums and out-of-pocket costs associated with individual-group coverage.
So, Giuliani's plan isn't much of a plan, but maybe that wasn't his point according to Dr. McCanne at Physicians for a National Health Program. He looked at Rudy's health care proposal and offered this comment:
Rudy Giuliani’s choice of health care advisors is all you need to know to understand his positions on reform. His decision to trump rational health policy with extremist libertarian ideology does tend to make you question his political skills. He obviously isn’t poll driven.
Rudy, polls show that a majority of the voters want a national health care plan and they're willing to pay more in taxes to get it. If you won't react to the will of the majority now, then you're not worthy enough to be president. The people deserve to have the ear of the next person in office.


expatbrian said...

Great post Kathy and nice clear examples. You might also add that, for families who are struggling to make ends meet and live month to month and paycheck to paycheck, healthcare is not going to be their very first priority to purchase if they end up with a few extra bucks. They are going to get the car repairs they desperately need, or replace the bald tires, they are going to finally buy new shoes for the kids to replace those with holes in them, they are going to pay down some of the high interest debt on their credit cards, they are going to get the stove/refrig/heater/disposal/lawn mower repaired, and on and on and on.
Rudy is not alone in his complete and utter ignorance of the actual day to day lives of normal people in this country. I don't think any of them have a clue, nor do I think they care. They just want to make it sound good, and throwing those dollar numbers around sounds good.

You've done a great job covering this issue. Keep it up.

abi said...

It pains me to say it, but whoever wins the presidency in 2008 isn't going to be driven by majority opinion on this issue - he or she is going to be lobbyist-driven.

Larry said...

If the government pays for this like it does everything else, the money would never come, and it wouldn't be administered properly anyway.

Kathy said...

Expat, thanks for pointing out the obvious that I should have included, low income people simply don't have the money to buy health insurance even with a tax deduction. And, moving up the income chain, as people are able to afford insurance, they often end up with policies that come with very large copays and deductibles that bankrupt them if they have a major illness. National health insurance is the only way to provide coverage.

Abi, there's no denying the influence of lobbyists, but I'm not ruling out the power of the ballot. A majority of the people want universal health coverage and the only way that will happen is to vote in those candidates who are on the same page - and it's not the Republicans. Not one single Republican running for office has come down on the side of universal health care.

Larry, Medicare, Medicaid and the federal health insurance program that covers government employees is funded, and in the case of Medicare, it's administered very well. Universal health care can be done and done well...we're already doing it with those programs.

abi said...

Larry, I know what you're saying, but Medicare works pretty well. And if we get rid of the layers of bureaucracy imposed by private insurers (not to mention the profit motive), a govt-paid system would save billions in the overall cost of health care.

abi said...

Oops - Kathy, it looks like we responded to Larry and clicked Publish at about the same time. ;-)

As far as the power of the ballot, of course you're right. But I'm less optimistic that we always use that power when it's in our best interests to do so.