Administration Is Open to Taxing Health Benefits
The Obama administration is signaling to Congress that the president could support taxing some employee health benefits, as several influential lawmakers and many economists favor, to help pay for overhauling the health care system.
Just a few minutes ago I was reading Mark Steyn, who said
General Motors has 96,000 employees but provides health benefits to over a million people.
I wonder how those folks are going to like their tax increase?
Would Medicare be taxed, too?
Would the tax be on premiums paid, or on services received? Imagine you have employer-provided group health benefits and have a catastrophic illness where your plan pays, say, $5 million for your care. Do you then have to pay taxes on that $5 million claim?
The article does not mention reigning in the malpractice lawsuit industry, of course. Doctors have to incur annually hundreds of thousands of dollars to pay for malpractice coverage, which in turn has provoked shortages of obstetricians in areas of the country.
What would be next after that? Plundering the 401Ks and IRAs?
Absolutely ridiculous – what won’t they consider taxing? I think the answer is “nothing.”
~T the D
http://thedrunkelephant.blogspot.com/
I do believe the reference is to removing our current tax break on health insurance premiums and not taxing health costs paid out on insurance claims.
But a tax increase is a tax increase. What worries me along with this is having to pay medicaid against 100% of income and social security tax against 100% of income when you will never receive any increase in benefit.
I have here in front of me my Form SSA-1099. Last year I had $1,060 deducted from my SS benefits for medicare part B. Retirees do pay for some part of medicare. In addition I, like many retirees, pay $157 per month for supplemental insurance as medicare has limited coverage compared to the average employer provided insurance.
While I haven’t for a Democratic presidential candidate since Jimmah, because I have gone without health insurance for the better part of the last 25 years, I would consider this proposal at least meriting consideration. Part of the skyrocketing increase in health care costs comes from the well-insured health consumer incurring little personal financial cost from his healthcare choices.
Greetings:
Back in the last ’70s, I spent some time studying Public Administration at Baruch College (CUNY). One of the concepts that I retained was the “fundamentalism vs. incrementalism” dynamic. Fundamentalism referred to policies like Social Security which sprang up “de novo” with nothing similar previously existing. Incrementalism referred to making changes, mostly minor in nature, to an already existing program, such as welfare “reform.”
I think that I would have much more confidence in the current tinkering (no disrespect to the “tinkers” on St. Paddy’s almost eve) if someone involved in the process would acknowledge and address this dynamic, perhaps by pursuing two different lines of study which could then be compared.
My understanding is that employers providing health insurance first began during a period of tight labor availability and then grew incrementally from there. That may have helped address the labor shortage problem, but is it the best method to deal with the need long term? I guess that I think, at least, maybe not. The obvious problems are the percentage of employed and insured workers. Both of these categories seem to be shrinking versus the total population due to the expansion of welfare programs and the increase in illegal immigration. Additionally, employer provided health insurance can be a burden in our now existent global marketplace. But, for me, the bottom line is that if we, as a society, want to legally make healthcare a “fundamental right” why have a “third party” (an employer) involved in the system. I think that that logic escapes me.
Thus, I am not totally against considering taxing health insurance benefits as income but would much prefer it as part of a comprehensive, perhaps fundamental, restructuring of how we provide heathcare to our citizens.
“What would be next after that? Plundering the 401Ks and IRAs?”
I bet Obama and Co will go after mattresses last.
That’s where all of our moneys are going to be sheltered in after they are done killing our financial system.
The US can’t afford Obama’s plans for health care reform. It is wrong to tax employer provided health insurance. It is wrong to tax employees for the value of this important benefit.
This has got to be stopped. I don’t want the working class or middle class to be taxed to support Obama’s vision of socialized medicine or health care reform. I don’t even want the rich or the corporations taxed I don’t care if they do benefit from somehow from tax breaks for paying workers’ health insurance premiums. Employer provided health insurance is already getting harder to get. Taxing it would only make things worse for all of us.