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Politics : A US National Health Care System?
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From: TimF5/26/2009 7:33:47 PM
   of 42652
 
Health Care: Mandates or Vouchers
Arnold Kling

Grace-Marie Turner and Joseph R. Antos write about a Republican health care proposal,

The nexus of their plan is redirecting the $300 billion annual tax subsidy for employment-based health insurance to individuals in the form of refundable, advanceable tax credits. Families would get $5,700 a year and individuals $2,300 to buy insurance and invest in Health Savings Accounts.

Low-income Americans would get a supplemental debit card of up to $5,000 to help them purchase insurance and pay out-of-pocket costs. They would have an incentive to spend wisely since up to one-fourth of any unspent money in the accounts could be rolled over to the next year. The combination of the refundable tax credit and debit card gives lower-income Americans a way out of the Medicaid ghetto so they can have the dignity of private insurance.

The basic idea is a health care voucher (like food stamps) as opposed to a health insurance mandate. This is a logical approach, one which every health care policy wonk can appreciate and support. However, it does not give government the kind of hands-on, top-down control over the health care system that the Democrats want, and hence it is a political non-starter.

econlog.econlib.org

John writes:

I certainly prefer this approach over the mandate method.

However, this approach does not work toward dismantling the distortion caused by Government intervention. The tax subsidy allows insurance companies to get away with higher prices than they would if the subsidy did not... at least that's my opinion.

econlog.econlib.org
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