Bush’s Health Care Vision

Peter Gosselin and Joel Havemann of the LA Times do a good job today picking through the bits and pieces of the White House’s policy proposals regarding health care, and putting them together:

WASHINGTON – President Bush wants to bring to healthcare the same “ownership society” approach that gained him little political traction during last year’s Social Security debate but remains central to his self-help view of America.

By proposing new tax breaks for the health savings accounts he won congressional approval for three years ago, analysts said, Bush hopes to nudge the nation away from the employer-sponsored health insurance on which most working Americans depend. Instead, Bush wants to use sweeping new tax incentives to encourage workers to set aside their own money to cover routine medical expenses and get individually purchased insurance plans to meet larger costs.

Of course, Bush’s vision ignores the fact that there are fundamental market failures (e.g. asymmetric information) inherent in the market for health care, and that these market inefficiencies make it likely that market-based solutions to the US’s health care problems will be not deliver an efficient outcome.