Thursday, November 18, 2004

Bush II: The Two Tiers

In this post, I wrote:

So between distributive regressivity and the combination of lost union jobs with a lack of state support for unionization of new sectors, we're well on our way to a two-tier system of professionals and service workers.

Looks like Bush's health care policies may also speed this along. I had always thought Bush's health care credit was a terrible idea in practice. In theory, it's kinda cool: provide people with a way to get health care that isn't moored to a job; now that there's so much horizontal job movement, elimination of those 3- and 6-month waiting periods before the new job offers health insurance is a great idea. In practice, though, it's....not so good. As with many Bush proposals, the devil's in the details. In order to get the credit, you have to have a fair amount of money up front to get the insurance. Further, private insurance is really only feasible for the reasonably healthy, since premiums rise exponentially as health declines arithmetically. So what would happen? The rich and healthy would leave the corporate insurance pool, leaving the sick and the poor. Premiums rise, fewer can afford them, etc.

One question that always seemed open, however, was whether the Bush admin had thought of the potential of the health care account to wreck the company insurance system. After all, there are some smart people working on these things, and they must've thought of this and calculated that any damage to the system would be minimal. I mean, they couldn't just want to destroy the cornerstone of the American health care system, could they?

Well, yeah. They could.

Via Atrios, we learn that the administration is considering eliminating corporate tax deductions for health insurance.

This is a little baffling. What could be the point of this? I suppose the idea is to disincentivize corporate spending for anything other than investment, but isn't it a Really Bad Idea to consider killing off company health care without having a workable system to take its place? It suggests that Bush really didn't think he made any mistakes whatsoever in his planning for Iraq; far from considering the lack of post-war planning a failure, it seems he's using it as a model for other policies.