'We've got to solve our health care problem with American principles, not the principles of socialism,' Rudy Giuliani told an audience in Rochester, New Hampshire, today. The Republican presidential candidate was there to introduce his solution: a tax $15,000 tax deduction for families to purchase their own insurance. He also pledged to lower health care costs by limiting doctors' and hospitals' exposure to malpractice claims.
Giuliani's approach is hardly novel -- in fact, it's nearly identical to what President Bush proposed in his 2006 State of the Union Address. (And when was the last time you heard about that?) Theoretically, it's good for small business: The Wall Street Journalreports that Giuliani hopes at least 13 million people will trade their employer-based insurance for a private plan, bringing the number of Americans who buy their own policies to more than 30 million. Assuming these citizens can be persuaded to give up their subsidized coverage in pursuit of (occasionally abstract) notions of choice, they will help to lower the cost of private insurance, ultimately making it affordable to the uninsured.
Or will they? That's one of the many unanswered questions raised by Giuliani's stance, which seems more grounded in ideology than practice. Some of the questions are practical: why precisely would anyone give up the benefit of employer-paid insurance? How long will it take to lower the price of private insurance? (Giuliani can't say, but acknowledges it could be years.) How much will it cost? (The former mayor doesn't know that either -- he claims he'll have an answer in a few months.)
Then there's the more meta question. Is it really in business' best interest to punt the cost of health care over to its employees? More businesses -- among them Walmart and Intel -- seem to be saying no. From time to time, the Entrepreneurial Agenda will consider this question and others like it, when the candidates have something new to say on the subject -- and even when they don't.