What the early reports either didn’t make clear or didn’t know was that the plan’s changes to health care deductibility don’t set limits, they’re creating, instead, a standard deduction of $7,500 for individuals and $15,000 for families. My initial understanding was that those were caps: Above them, you couldn’t deduct anything further. Below them, you simply deducted what you spent. That was incorrect. Instead, everyone will get precisely those deductions no matter what they spend. If you’re 23 and your health care costs $2,000 a year, you still deduct $7,500, pocketing the difference. It would, in that situation, be economically foolish of you to purchase high quality, comprehensive coverage. And that goes all the way up the line. The intent here is clear: To incentivize the purchase of low-quality, high-deductible care, particularly among the healthy, young, and/or rich. To degrade the risk pool, and encourage HSAs. To reduce coverage, costs, and health security.
And this was supposed to be one of the more progressive aspects of tonight’s speech. Looks like it’s going to be a long evening.