ok, am i missing something, or is this just a way to route more money to insurance companies in the guise of a tax credit?
and why why why is counseling a bell and acupuncture a whistle, but fertility treatments neither?
On Mon, Sep 15, 2008 at 3:04 PM, Charles Brown
<charlesb@xxxxxxxxxxxxxxxxxxxxx> wrote:
McCain plan taxes Health benefits
McCain's health insurance plan: More radical than Democrats'?
09:25 AM CDT on Saturday, August 16, 2008
By JASON ROBERSON / The Dallas Morning News
[jroberson@xxxxxxxxxxxxxx]
Democratic health care proposals may have gotten more attention during
the
primaries, but Republican John McCain's plan just might be more
revolutionary.
The GOP nominee-to-be wants to tax workers on the value of the
insurance
they receive from employers.
At the same time, everyone would be offered a federal tax credit to
help
them pay for insurance - whether a company plan or one purchased on
their own.
Buyers could subtract up to $5,000 from their federal tax tab come
April 15.
Or they could simply sign over the credit to an insurer in order to
purchase
coverage.
The goal, Mr. McCain said, is to give those without company-provided
health
insurance the same tax advantages as those with coverage through work.
It
would also encourage individuals to shop for less expensive insurance,
his
supporters say, pushing prices down.
In contrast, Democratic presidential contender Barack Obama says he
wants to
expand Medicaid, the government health care program for the poor, and
require employers to either provide health insurance to their workers
or contribute
to a newly created public insurance program.
North Texas employers are not saying they would drop employee coverage
altogether if Mr. McCain's plan were enacted.
But some do say the plan, which Mr. McCain detailed in July, would
encourage
young and healthy workers to forgo company coverage, purchasing
insurance on
their own rather than paying income taxes on the benefit. That would
leave
employers with only the costly sick workers to insure.
And that, they said, could eventually lead to the death of
company-provided
health plans.
"If health benefits became taxable income, yes, I do think that more
people
would opt out," said Andrew Webber, president and chief executive of
the
National Business Coalition on Health, a nonprofit group of
employer-based health
care coalitions, including the Dallas-Fort Worth Business Group on
Health.
Bob Queyrouze, who oversees benefits for 1,200 workers at the Federal
Reserve Bank of Dallas, calls Mr. McCain's plan "radical." "Long term,
it would be
destructive to the system," Mr. Queyrouze said.
He adds that he doesn't think the health insurance industry could
respond
quickly enough to handle a large influx of individuals looking to buy
their
own, more affordable policies.
Joe Zubretsky, chief financial officer of Hartford, Conn.-based Aetna
Inc.,
said the insurer will be ready regardless of who becomes president or
if
either of the proposals is implemented. However, he added, "We believe
conventional wisdom will prevail and the employer-based system will
prevail."
Last year, the employer-paid portion of a family plan averaged $8,824
per
employee, according to Kaiser Family Foundation, a nonprofit health
research
group. Workers kicked in an additional $3,785 for such family
coverage, the
group said.
That means, under Mr. McCain's plan, an employee with a taxable income
of,
say, $50,000 last year, would have instead paid taxes on $58,824,
after the
company-paid premium amount was added on.
The McCain plan would at the same time offer a $5,000 tax credit for
family
coverage ($2,500 for individual coverage). Those whose policy cost
less could
save the remainder in a Health Savings Account to cover future health
costs.
Mr. McCain said the new tax on the employer-provided portion of
coverage
would pay for the tax credits - essentially rerouting $200 billion in
existing
tax subsidies.
Critics question whether individuals - especially those with chronic
or
pre-existing medical conditions - would be able to find health plans
they could
afford.
Mr. McCain addresses this question by saying he would create a
federally
supported plan to insure those denied coverage.
Opponents also say the amount of the tax credit will not be enough to
purchase comprehensive coverage.
McCain supporters say the tax credits were intentionally set lower
than the
amount typically spent on employer-provided health plans. That is to
encourage individuals as well as employers to shop for less expensive
policies, said
John Goodman, president of the Dallas-based National Center for Policy
Analysis, a conservative think tank, and a health policy adviser to
Mr. McCain's
campaign.
This would help rein in the nation's ballooning health care costs, Mr.
Goodman argued. Last year's average total premium of $12,106 for
family coverage
was up 88 percent from 2000, according to the Kaiser foundation.
The tax credit "would not subsidize bells and whistles [marriage
counseling,
acupuncture, etc.] as the current system does," Mr. Goodman said in an
e-mail.
While most company plans do not cover marriage counseling or
acupuncture,
many do cover such costly services as infertility treatments and
psychiatric
analysis sessions. Presumably, those who did not need such treatments
would be
able to save by buying a more streamlined plan.
Most Americans now get their health care coverage through work. In
Texas,
it's an estimated 52 percent, or 12 million people, according to the
state
Department of Insurance.
Lawrence Louie, a 40-year-old Plano telecommunications worker, is one
of
those. He doubts the McCain tax credit will be large enough to buy
insurance on
the open market for himself and his wife.
"Basically, I would be forced to choose between paying the increased
taxes
[on the company-paid premium], or pay at least $4,000 out-of-pocket
per year
for private insurance, after adjusting for the value of the tax
credit," he
said.
"Anyone with good insurance is not going to find this acceptable."
THE PLANS
John McCain: Proposes a $2,500 refundable tax credit for individuals,
$5,000
for families to make health insurance more affordable. In gaining the
credit, workers would be taxed for the portion of their workplace
coverage
insurance paid by their employers. Would offer federal assistance for
states to
create high-risk pools that would contract with insurers to cover
consumers who
have been rejected on the open market.
Barack Obama: Would require coverage for children but not adults.
Would
require employers to provide insurance or contribute to the cost but
would exempt
the smallest businesses. Would offer health plans similar to the one
available to federal government employees. For people who do not
qualify for
Medicaid, he would offer a subsidy to buy into the public plan or
purchase a private
insurance plan. Would also expand the children's health insurance
program.
SOURCES: Wire, Internet reports
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