In late April, Avik Roy wrote a compelling defense of President Bush’s 2007 health reform proposal, which sought to reform the tax treatment of health insurance by offering all individuals a standard deduction and redirecting disproportionate share hospital (DSH) payments to hospitals that provide uncompensated care to coverage expansion efforts for low-income households.
The Lewin Group analyzed the Bush tax reform using its Health Benefits Simulation Model, and estimated that equalizing the tax treatment of health insurance would expand coverage by 9.2 million people. In addition, the Bush administration estimated that the Affordable Choices Initiative would expand coverage by an additional 2 million or so, for a total of about 11 million. That’s not as large a coverage expansion of Obamacare, at 33 million, but that 11 million is achieved with zero increase in federal spending commitments: a pretty impressive bang for the buck.
In addition, Obamacare’s 30-million coverage expansion figure may be substantially inflated. If the individual mandate gets struck down by the Supreme Court, the Congressional Budget Office projects that the law would expand coverage by only about 17 million, despite trillions of additional federal spending.
To be sure, other analysts were less sanguine about the likely impact of President Bush’s proposed reforms. But as Avik suggests, the Bush-era reform model might prove an attractive alternative to PPACA.