New health plan a positive for grads

President George W. Bush’s recent health care proposal, rooted in tax breaks for those with… President George W. Bush’s recent health care proposal, rooted in tax breaks for those with health insurance, has local experts and politicians asking who will reap the benefits.

“The group that would be advantaged the most by this plan would be the relatively young adult group, the recent college graduates,” Beaufort Longest, professor of health policy and management at Pitt’s Graduate School of Public Health, said.

The segment of younger, generally healthier people doesn’t cost as much to insure, which means what they potentially would save in taxes could equal or even surpass their health insurance costs.

Bush introduced his health care plan at last month’s State of the Union address, a plan which focused on tax code reform. Under this proposal, anyone with health insurance would receive a standard tax deduction, comparable to the standard tax deduction for dependents.

Someone with individual coverage would receive a standard deduction of $7,500, while those with family coverage would receive a $15,000 deduction.

“For most of the people who don’t have insurance, the problem isn’t that they can’t get insurance. It’s that they can’t afford insurance,” Rep. Mike Doyle, D-Pittsburgh, said in an e-mail. “The deduction wouldn’t come close to paying for their health insurance.”

Longest agrees that the proposal is lacking substance.

“Its only real advantage is that it does make an equally taxed advantage,” Longest said.

Under current law, those who buy their own insurance don’t get tax breaks, while those who get coverage through their job can buy insurance with an unlimited amount of tax-free money. Under this plan, with the $7,500 and $15,000 limits in place, any purchase above those limits would be taxed. Thus, according to the White House Council of Economic Advisers, lowering taxes for 80 percent of Americans and raising taxes for the other 20 percent would create spending over these amounts.

“These proposals are simply another way of paying for health care,” Rep. Tim Murphy, R-Upper St. Clair, said in an e-mail. “If we took a look at what we were paying for, we could instead focus on the waste in the health care system and work to eliminate it.”

Murphy, one of a handful of medical professionals in Congress, said he usually makes at least one speech a week on health care. His shift in focus is what he calls moving from the “who” to the “what,” where more emphasis is placed on the quality of what patients are paying for rather than who is paying for it.

He said the use of electronic prescribing and electronic medical records could save $162 billion, a figure supported by the RAND Corporation.

“This reduces medical errors, eliminates duplicate tests and saves doctors’ time when trying to get a patient’s medical history,” Murphy said.

But Doyle thinks nothing short of dramatic reform will be successful in providing all Americans with affordable health care.

In his 12 years in Congress, Doyle said he has seen targeted fixes and incremental reforms only lead Americans to pay more for health insurance on a per capita basis than anywhere in the world.

“The only possible way to guarantee all Americans access to affordable, high-quality health care is the replacement of our current system,” Doyle said.

He said that the large amount of money spent on paperwork and administration could be eliminated with a single-paper system, in which one government agency or private organization pays all the bills while people continue to choose their own doctors.

As far as a simpler solution for young adults, like Pitt students who often lose their parents’ or school insurance upon graduation, Longest thinks the ages in which a dependent can remain on the parent or providers’ insurance plan should be raised.

“The question I have is, why hasn’t the insurance industry already done this on its own?” Longest said. “I have a suspicious answer.”

Longest said the company could easily figure out what the new family insurance premium should be if the young adult was permitted to remain on the insurance, likely not raising the cost by that much because she is young and healthy.

But selling an individual adult premium instead would probably cost much more, he said.

“You can make a plausible argument to say it’s a question of which is more profitable,” Longest added.

Pitt senior A.J. Allen said he’ll be facing the cost of insurance soon because he will be dropped from his parents’ plan this April.

“I don’t exactly know what I’m doing yet,” he said. “All I know is it’s going to be ridiculously expensive.”

And it’s this high cost that leads many students to give up on health insurance completely. Forty percent of college graduates spend a period without insurance during their first year after graduation, a recent Commonwealth Fund study said.

“Generally yes, their generation is young and healthy, but things happen,” said Dr. Elizabeth Wettick, a senior physician at Student Health who thinks students should never live without health insurance.

Wettick said she has seen young people suddenly develop blood clots or have car accidents and that insurance is vital in such cases.

Doyle said the insurance problems young people are facing is of great concern.

“Even though young people just out of college make up the healthiest adult age group, the health insurance market prices them out when it should be drawing them in,” he said.

Longest also agrees that there is health care crisis among the recently graduated population and sees the potentially beneficial outcomes on the pockets of young people under Bush’s proposed tax plan. Yet, he still isn’t sold on how it would help the uninsured poor.

“It has some interesting features, but my basic reaction to it,” he said, “is it helps the people that don’t need the help the most.”