Giuliani’s Darwinian Health Care Proposal
Some Conservative Republicans may have trouble accepting Darwinism as an evolutionary theory, but they have no problem making it the foundation of domestic policy. The leading GOP presidential candidate, Rudolph Giuliani, has proposed survival of the fittest health care.
Guiliani’s health care plan is a new tax deduction that would encourage Americans to buy health insurance on their own in an open market. It would give taxpayers a tax deduction for health insurance up to $7,500 for individuals and $15,000 for families. The proposal is similar to what President Bush proposed in the State of the Union.
Wide open markets make sense for most consumer goods and services, but in health care, markets are seldom compassionate. A child born with a genetic disease like cystic fibrosis will never be able to buy health insurance coverage. A person who develops a chronic disease like diabetes might be able to purchase a plan, but insurance companies often won’t cover the costs of treating an existing disease. A healthy person who buys coverage may lose it when an insurance company, looking to widen its profit margin, drop whole groups of subscribers whom executives fear will get sicker over time and file too many claims.
So what would Giuliani do? In short, he would unleash what wonks like me call “the death spiral in insurance.” He would create an incentive for healthy workers to leave the insurance pools they join through their employer, and purchase insurance at a lower cost on the open market. That would leave sicker workers - who might be unable to find coverage without the help of their employer — as the only subscribers to their workplace health plan. And in turn insurers, worried that they would only be insuring workers who would demand a great deal of expensive care, would drive up premiums, eventually forcing employers to stop offering coverage all together.
The Giuliani plan does not stop at helping the healthy at the expense of the sick. It also caters to well-off Americans who can already afford health care coverage. The tax deduction would be worth more to people in higher income tax brackets whose marginal tax rates are much steeper than those at the lower end of the income spectrum. Although Guiliani would provide some additional tax relief for low income workers, he could do much more for low and moderate income voters if he weren’t doing as much for the wealthy.
While on the campaign trail, Giuliani likes to charge that Democratic candidates are for a “socialist” health care system — like the regime currently at work in Canada. He’s simply wrong. The three Democratic frontrunners have rejected the so-called “socialist” model, opting instead for pragmatic solutions that buttress current protections even while giving workers more choice and control of their own coverage.
As the Progressive Policy Institute has proposed, they model their plans on the Federal Employees Health Benefits program, which currently ensures that members of Congress and federal workers have a choice of affordable coverage plans no matter where they live.
The goal of any good health care proposal should be to expand coverage and lower costs. Giuliani’s plan does the opposite. By providing a tax deduction that provides disproportionate benefits to the rich, he does little to expand coverage. And by dividing the pools of healthy workers from those who need more expensive care, he raises the costs for America’s most vulnerable patients.
We can do better.