Today, Rudy Giuliani announced his plan for cleaning up the health care system. Under his plan, each family gets $15,000 in tax credits with which to buy their own health insurance. If, after paying for premiums, the family has leftover tax credits, they can use them to pay for out-of-pocket expenses.
The plan has some merit. 1) If the system works, it would remove some of the burden for health insurance from employers who have been struggling to provide a reasonable benefit for employees in the face of sky-rocketing health insurance costs. 2) Using tax credits ensures that the money is spent for insurance and nothing else. The amount, $15,000, should be enough to cover most families depending on the plans they choose.
3) The program supports the medical savings account concept which encourages people to take responsibility for costs just as they do with any family budget item, thereby influencing costs by their purchasing decisions. It gives the consumer more power in the marketplace.
4) In the plan, leftover funds are also able to be rolled over year-to-year and used, as necessary, for medical expenses.
Some questions about the plan have yet to be answered such as how some people with prior conditions will be able to get into a plan. Once they leave an employer group plan, consumers are left to the whims of the insurance community who have been unwilling to allow even healthy individuals into their plans if they have been diagnosed with certain conditions in the past. Those who would be interested in an individual plan would most likely be employees with employers that do not currently offer affordable insurance. Insurance companies often refuse to insure consumers who have been without insurance, or, interestingly, those who have not seen a doctor within a year or two. Clearly, some changes or additions would have to be made to make this a workable program, but the concept certainly has promise.
One bit of information Giuliani has yet to give is his estimate of the cost to taxpayers for such a program—not a minor issue.