States address health care; feds, not so much

Today's NYT highlights states' efforts to expand health coverage through current programs like SCHIP and Medicaid, even as the Bush administration calls for returning those programs to their "original objective" of providing coverage for people with incomes at twice the federal poverty level or below (that's about $41,000 a year for a family of four, or about $27,000 a year for a two-person family like mine). Snip:

In Washington, health policy debates highlight the ideological divide between Republicans and Democrats over the proper role of government in helping the uninsured. Governors and state legislators tend to be more pragmatic.

“There is such a political divide in Washington that many people believe that the only reasonable chance to succeed is at the state level,” said Jeffrey S. Crowley, a senior research scholar at the Health Policy Institute of Georgetown University.
...
In his budget, Mr. Bush said the way to transform the health care system was by “subsidizing the purchase of private insurance,” not by expanding public programs in a way that would increase costs to the federal government.

I've got two basic problems with the administration's position. First, isn't it inevitable that 'subsidizing the purchase of private insurance' will increase costs to the federal government just as surely as the expansion of public programs? Sure, we can argue about which costs more, but if an 'ideological divide' separates the two, I just don't see it as about cost; it looks a lot more like a preference on the part of the administration to assure a role for commercial health insurers.

Secondly, and more importantly, I can't see that the administration's tax deduction proposal would cause anything like the transformational change needed to fix the problem. We can trim all the fat out of the current system through republican ideas like eliminating the tax incentive for Cadillac plans, tort reform, and cost transparency, but you can't really escape the fundamental principle that we need healthy people to help pay to care for sick people.

Link.