Ezra Klein: I Was Wrong

Alright, unpleasant post to write, but I was wrong: The Bush administration's health plan is a trap. I'd counsel Democrats to oppose it, but that'll hardly be necessary. The surprising outcome would be if they even notice it. And this comes, I hasten to underscore, from someone who was willing, eager even, to give the Bush administration a chance, to believe the Democratic majority had spurred them towards more pragmatic, constructive policy-making. Fool me once...

What the early reports either didn't make clear or didn't know was that the plan's changes to health care deductibility don't set limits, they're creating, instead, a standard deduction of $7,500 for individuals and $15,000 for families. My initial understanding was that those were caps: Above them, you couldn't deduct anything further. Below them, you simply deducted what you spent. That was incorrect. Instead, everyone will get precisely those deductions no matter what they spend. If you're 23 and your health care costs $2,000 a year, you still deduct $7,500, pocketing the difference. It would, in that situation, be economically foolish of you to purchase high quality, comprehensive coverage. And that goes all the way up the line. The intent here is clear: To incentivize the purchase of low-quality, high-deductible care, particularly among the healthy, young, and/or rich. To degrade the risk pool, and encourage HSAs. To reduce coverage, costs, and health security.

It's almost laughably wrongheaded, and won't survive an instant in Congress. Pete Stark, chair of the House Health Subcommittee, has already dismissed the idea of hearings. Other Democrats, I expect, will react much the same. Bush is responding to America's fears of high health costs, inadequate coverage, and increased risks with a proposal that promises to further weaken their coverage, heighten their risk and, when they get sick, increase their costs. It's a wonder he's even bothering. As for me, I made the mistake of extending good-faith to an administration that, time and again, has proven it deserves none. The optimist in me has been grounded for a week, and won't get dessert for two.