Brad makes a good point on the President's health plan. Given the current march of health costs, a tax change that would currently effect a relatively small number of Americans would rapidly harm a huge majority:
The deduction would indeed worsen the finances of only 20% of those with employer-sponsored coverage in 2009. But it would worsen the finances of about 50% of those with employer-sponsored coverage in 2019. And 90% of those with employer-sponsored coverage by 2030.
So every effect I've mentioned would become exponentially worse with every passing decade. If the change would initially convince a small number of families to purchase skimpier health coverage, the economic pressure to do so would heighten mightily five years down the road. So let's be clear: This is a way to make HSAs and shitty, high-deductible, high-risk plans more attractive with every successive year. It's a backdoor effort to remake the nation's health care system in conservatism's image. And, as Jon Cohn writes, Democrats are not so weak and the moment not so dark that such an offer must be treated respectfully:
Four years ago, a proposal like the one Bush is making might have been the opening bid on a workable compromise--one that could have helped make medical care more affordable for a modest, but significant, group of people. But the conversation about health care reform has moved way past that point already. Even conservative industry groups like the Business Roundtable and America's Health Insurance Plans have put their imprimatur on far more sweeping initiatives. Meanwhile, a Republican governor (Schwarzenegger) is proposing truly universal coverage for his state while a former Republican governor (Mitt Romney) has already enacted it for his. Forget the talk about Bush's bipartisanship; at least on health care, he can't even keep up with his own party.
