Pity the poor Republican Presidential candidates. When it comes to healthcare, they don’t have much to fall back on besides the usual tired rhetoric:
- Feel good ideas with limited or no impact (e.g., focus on wellness, tort reform, competition across state lines)
- Cheap shots and unsupported assertions (e.g., Obamacare is a government takeover, we’ll have waiting lists and rationing)
- Attempts to preserve popular parts of Obamacare while stripping away the foundations that make those aspects work (e.g., forbid discrimination based on pre-existing conditions but let people wait till they get sick to buy insurance)
As expected, Jeb Bush’s new health plan contains these elements. But I commend him for his plan to limit the tax deductibility of employer-sponsored health plans. Under his plan, any employer contributions to premiums over certain thresholds ($12,000 for individuals, $30,000 for families) will be treated as regular wages and subject to taxation. The impact is almost the same as the so-called Cadillac Tax, but the mechanism is more straightforward and efficient.
He’ll probably get a lot of grief for his idea, but it’s a good one that should be supported. It reduces the tax system’s distortion that causes employers and employees to favor health benefits over wages.
Image courtesy of worradmu at FreeDigitalPhotos.net
—October 13, 2015