Fox News resurrected former President George W. Bush's failed health care plan as a possible GOP alternative to the Affordable Care Act, seven years after it was proposed in his 2007 State of the Union Address and experts concluded it favored the rich and only insured a small number of Americans.
A February 18 Politico Magazine article titled "Bushcare" by Edward Lazear, the former chairman of the Council of Economic Advisers under George W. Bush claimed the former president "found the solution to America's healthcare crisis seven years ago." Lazear wrote Bush's plan was revenue-neutral and would actually net tax payers money for buying insurance, but the plan would not cover the very poor (emphasis added):
The large majority of those who currently have health care would enjoy a net decrease in the cost of their plans through the tax deduction, Treasury found. Many without insurance would be able to obtain it and get a tax rebate that would exceed the cost of the policy, netting money on the deal. And the substantial number of Americans whose policies are not provided by an employer would enjoy a big gain.
The Bush plan works primarily for those who earn income and pay some tax, be it payroll or income. To the extent that subsidies to the very poor, especially those not working, are needed, provisions can be added to the plan that would assist those individuals without altering its basic structure. Of course, since the U.S. economy has changed in the past seven years, the plan would have to be updated too, but this could be done without significantly changing its overall fiscal footprint.
The next day on Fox News' The Real Story, host Gretchen Carlson allowed Lazear an open platform to highlight his alternative to the Affordable Care Act (ACA or Obamacare). During the segment, Lazear pointed out two major problems with the health care system today: the number of uninsured Americans and the problems with third party payment. He explained:
LAZEAR: We have third party payers. That means that the individuals, the decision makers - the physicians and the patients don't bear the costs of their actions. So what happens is, once you have insurance or if you're on state funds for your health care, you essentially get those services for free and as a result you tend to take too many of those services.
Carlson: So what you are saying is that people know they have the health care coverage, so they tend to over use the system.
But Lazear's rosy depiction of Bush's proposal leaves out many of the key problems, namely that it would do little to help lower income Americans get affordable insurance. The CBO reported that Bush's plan would actually only insure 6.8 million Americans without health insurance and added that "those gaining insurance coverage under the President's proposal would have higher income, on average." The Washington Post's Sarah Kliff pointed out that the Bush's proposal would not be revenue neutral and would actually work to benefit "higher-earning Americans who have a higher marginal tax rate" (emphasis added):
[T]he Congressional Budget Office did score a similar proposal from President George W. Bush in 2007. His plan included a $15,000 standardized tax deduction for health insurance coverage, and the CBO estimated that 6.8 million people would gain coverage. The tax deduction would, on average, cover about 70 percent of the premium's cost.
The CBO noted, back then, that using tax deductions, which reduce taxable income, would likely make this a more desirable benefit for higher-earning Americans who have a higher marginal tax rate.
"Compared with people who would be uninsured in 2010 under current law, those gaining insurance coverage under the President's proposal would have higher income, on average," the agency wrote. "The reason is that the value of the new deduction would be greater at higher marginal tax rates, which are associated with higher incomes. Nonetheless, the majority of newly insured people would come from lower-middle- and middle-income households."
Budget-wise, the CBO projected that the Bush proposal would cost $33 billion over a decade.
In contrast, the CBO found that the ACA reduces the number of uninsured by a much greater amount than the 6.8 million covered under Bush's plan, reducing uninsured the number of uninsured from 57 million, to 31 million uninsured in in the same time frame. The also ACA bans discrimination against women and people with pre-existing conditions, helping to control costs insurance companies can charge them. The New Republic's Johnathan Cohn explained the expected reduction of uninsured Americans under the ACA:
Without the law, CBO says, the number of uninsured Americans would stay at roughly 57 million. But thanks to the various coverage expansions -- not just the creation of new private insurance marketplaces, but also the expansion of Medicaid and ability of young adults to stay on their parents' plans--the number of uninsured will decline markedly. By 2017, according to CBO, Obamacare will have reduced the number of Americans without insurance by nearly half -- or more, if you don't count undocumented workers.