What a Waste of a State of the Union
I love the idea of Democratic Rule through 2010
By Thomas Posted in The White House — Comments (108) / Email this page » / Leave a comment »
If you're, ahem, fortunate enough to be constantly plastered with White House spam email, you'll have noticed that the President is pushing health care reform as one of his major initiatives. Here is the point-by-point. The executive line summary is an attempt to start taxing a portion of employer-provided benefits to push folks into tax-deductible individual healthcare plans. (blackhedd ably discussed this here.)
To this I say: You have to be kidding me.
Let me start with first principles, and why I'm hacked:
(1) We're Republicans. We do not tax. We became, over the last twelve years, the Other Party of Spend. I don't see why we should cede our last bit of ground on that front now. I may have to accept abortion-philes and cowards in my Party, but I should not have to have the one reason God made Republicans taken away. And as this creates a new taxing structure, you're gonna have to pardon me if I don't believe it's not a tax, and if the public doesn't buy the argument that it's not.
(2) This will not pass. Regardless of the merits of the thing -- and I believe them dubious at best -- this is gonna be one phenomenal waste of what little political capital Bush has left. There are only two reasons to set forth something this high-profile when it has no chance of passing: (a) You want to embarrass your opponents when they shoot it down, or (b) you want to build on this into and through the next election, because you believe it's a high-profile issue that can produce key electoral votes. Neither of these things apply here.
I can't even begin to fathom what went through what's left of the WH brain trust. Well, we need a home run shot to recapture political momentum. War? Nope. Something for the base? Ok, everyone, stop laughing. I know! Let's tax medical benefits!
It doesn't end there. Read on.
Let's begin with the underlying logic, such as it is. The President is pushing this plan as if it will be the first, vital step in reforming our seriously screwy healthcare system. I believe the basic animus is that because these benefits are provided by employers, there is no disincentive to stock up on the best possible plan offered, at no or little additional cost, and to use health care resources inefficiently, because the increased cost the consumer is creating is hidden from their eyes.
To anyone who thinks that hidden price signals account for the majority, or even a plurality, of the problem with health care, I have this beautiful bridge off of one of New York's boroughs, and it can be bought cheap cheap cheap! This is unserious. The problem with our system, frankly, is that we allow people over the age of 45 to have health insurance, and they demand increasingly complex and expensive treatments, surgical and non-surgical, to hold off the Grim Reaper a little longer. Because they demand it, their state legislatures require insurance companies to give it; and because of some lovely court rulings and legislative acts at the State and Federal levels, insurance companies have to offer that insurance, and at affordable prices. The insurance companies then do the rational thing and raise premia across the board. And because those middle-aged-and-older folks keep pushing back the scythe, and because the tools to lock blades with Old Bones grow exponentially more expensive for every five years of additional life, we're caught in a death spiral. Thus, it's undisputed that getting the best of the best (with honors sir!) coverage at what appears to be a confused price weighs in, as do medical malpractice suits (and increased premia for medical malpractice insurance), bond market issues for the insurance companies, and an increasingly overweight, underexercised populace; but all of those things work at the margins. They exacerbate, they do not cause.
So pardon me if I'm not wowed and amazed at this placebo. Do you want to solve the healthcare "crisis" right now? I'll do it for you: Kill the Baby Boomers -- and my fellow Gen-Xers, it's time to start partying like it's 1999, because we're next. (That would solve a number of other problems as well.) Want something more complex? Forbid the States or the Federal government from all but minimal regulation of health insurance; allow tiered insurance and risk pools, with vastly more expensive premiums for each five-year step, to the point where it becomes financially impossible for all but the wealthiest to afford coverage after the age of 60; and encourage folks under 45 to buy the "gold-plated" insurance plans, because they're giving the insurance companies premium for options they'll never use. "Gold-plated" insurance is a wonderful thing, because the young saps who buy it are subsidizing everyone else.
Now, none of that will ever happen; it therefore has at least as much going for it as the President's plan.
But we'll get back to that in a second. Let's talk first principles. The fundamental lesson that Republicans should know, but appear to be forgetting, is that no tax ever disappears -- or if it does, it takes a century and change. At best, they only grow a little over time. Right now, this is only a tax on certain benefits offered and accepted by an employee. Why stop there? Why not on the whole amount offered by the employer? Why not tax insurance benefits received above the premium you pay? What about employers who self-fund their own risk pools and have a TPA (third party administrator, for those of you smart enough not to know these things) handle claims (best insurance I've ever had), who, because they're in a controlled risk pool, can set premiums and pick up portions better that employers who sign on to Humana, BlueCross, or whoever's plan?
This plan is fundamentally about growing the Federal Government. Remember when we were against that? Can't we at least have an offset? Where's that overhaul of ERISA that should accompany this? You know, the one to offer tax incentives to employers to rearrange how benefits are offered, to protect employers who don't offer those benefits or who only provide the cash for the benefits, and so on? Oh, no, wait, that monstrosity keeps coming.
While we're at it, one of the lines they're trotting out is that this plan is a good thing because it will force people to be more responsible with their health care dollars. I missed the part where being a Republican involved having the government teach me personal responsibility. Can someone show me that plank?
Now let's talk about why this is awful politics.
This tax -- let's be frank about what it is -- does not affect me, because I currently work for a law firm that has elected not to provide generous benefits as part of its compensation package. But let's assume it does, and use me as an example. My eldest son and my daughter both have diagnosed medical conditions (not uncommon), that may or may not need surgery. My wife and I are expecting again. (We're Catholic. The reason is obvious.) The announced point of this plan is to drive me from my employer's risk pool into a risk pool composed entirely of individuals. Ok. Let's be honest about what happens:
Step One: I apply to, say, Humana to cover my family. They say, We're happy to have your business. Let's do some underwriting.
Step Two: During the underwriting process, they decide that they don't want to cover anything associated with my kids' pre-existing conditions. Perfectly rational. So they attach a rider exclusion excluding any treatment for those (or any other pre-existing condition, including pregnancy, ahem, which group coverage cannot do, under HIPAA) to the coverage.
My premium is now tax deductible. Woo hoo. It's still, of course, out of pocket. But at least it's not taxable!
Step Three: My wife, pregnant as she is, goes into labor on time, as most women do, no complications, vaginal birth, healthy kid who needs an incubator because, as all of my kids are, s/he is freaking huge and was too big for the uterus. Total hospital and doctor bill (where they're still offsetting the massive rate-slashing insurance companies insist upon, because even now, most people are insured through their companies): $25,000.00, which is to say, a not insignificant chunk of my yearly salary. Hm. That sucks.
Step Four: My daughter contracts an infection and her specialist recommends surgery to correct the underlying problem. Total bill (see parenthetical above): $18,000.00. Hm. That also sucks.
Step Five: Meanwhile, rather than merely have to pay 80% of each visit to my son's regular treater, I pay 100% -- and now they have me on the uninsured rate, so see parenthetical above. So that's now running me some extra money every week -- roughly $150, which means I have an extra $600 out of pocket every month. So there went what's now the chump change of an extra $7200 every year.
The good news is that as much of all this is over 7.5% of my income, but below a certain cap, is tax-deductible! Woo hoo!
Anecdote is not the singular of data, as our good streiff likes to put it. But imagine, oh, say, the majority of Americans are being pushed into this choice. Then imagine, just for fun, that some significant portion of them vote. Just for giggles, humor me.
Now imagine that even assuming the Yellow Brick Road vision everyone's laying out over this acts as modern markets and market events tend to, which is to say, at the speed of human. Transition costs are not zero; there are micro- and macro-inefficiencies that take years to work out. Who bears those costs? Would it, by chance, be those voters?
And, as I mentioned above, there is no way in heck this passes a Democrat-controlled Congress, two of whose primary constituent groups -- government employees, and other union laborers -- enjoy "gold plated" coverage from their employers. So the net effect of this is to shove a great, stinking pile of turds under the voters' noses, then have the Democrats bravely beat it away.
Dumb. Dumb. Dumb, Mel Martinez dumb.
While it's a cliche to say that Bush lost me -- and it's untrue -- this is the first time I honestly think he's betrayed first principles. That he's chosen to do so and waste political capital in the process. We've neatly gone from one of the finest political operations in modern memory during his first three years in office, to one of the worst since.
What a waste of a bully pulpit.
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tonight, not much else, and should take the Joe Liberman-General Petraeas tack in the hearing today.
Mike Gamecock DeVine @ The Charlotte Observer
The Minority Report but, "One man with courage makes a majority." - Andrew Jackson - The HinzSight Report
Race 4 2008
It will not work.
If he is going to send in the surge, he needs to stand up and take on the issue.
If he tries to change the subject it will erode what credibility he has remaining.
It's sad to see how far he has slipped, but it's hard to lay this at someone else's feet.
"McCain-Feigngold will never pass the House and Senate."
Result: Wha, wha, what happened!??!?!
"The President will never sign McCain-Feingold."
Result: Wha, wha, what happened!??!?!
"No worries, the Supreme Court will strike it down - it has to be unconstitutional."
Result: Wha, wha, what happened!??!?!
Never say never. Ever.
It will never pass. McCain-Feingold was passed enthusiastically because it was designed to protect incumbents.
And Thomas seems to be right on the politics as well. The first thing Charlie Rangel said about the plan is that it's a middle-class tax increase. And that would (harrrumph!) never pass on his watch.
But on that awful legislation (McCain-F) - I said at every turn that it would never pass.
Until it did.
But incumbent protection is a pocketbook issue for Congresscritters of both parties. It was a forgone conclusion that McCain-Feingold would pass. The only issue for Congress was creating enough of an intellectual figleaf to make the NY Times agitate for its passage and divert attention from its real goals.
The health proposal, on the other hand, does nothing but harm to Congressional Democrats. They will demagogue it like crazy, and pass nothing like it.
To anyone who thinks that hidden price signals account for the majority ... of the problem with health care, I have this beautiful bridge off of one of New York's boroughs
You then seem to follow this with an excellent description of how hidden price signals account for the majority of the problems with health care. That is, the consumers of health care do not see the costs of what they buy.
My personal opinion is that government should insure (in total) any event that costs $20,000+.
At which point, all sorts of medical procedures will suddenly start costing $20,000. Add in inflation, and you are advocating government paying for virtually all health care. This strikes me as being a lot further from Republican orthodoxy than anything coming from the White House. And as you admit elsewhere, the root of the problem is the cost of life-extending procedures which consume huge amounts of money. Your idea does not address that problem.
While we're at it, one of the lines they're trotting out is that this plan is a good thing because it will force people to be more responsible with their health care dollars. I missed the part where being a Republican involved having the government teach me personal responsibility.
For as long as I can remember, personal responsibility has been a "plank" in conservative thinking. If that has ceased to be the case I'm afraid I did not get the memo.
Your arguments strike me as very contradictory. On the one hand you blast the Bush proposals as growing government. But your own suggestion would grow it by an amount several orders of magnitude greater.
My personal opinion is that government should insure (in total) any event that costs $20,000+.
Unless I'm missing something pretty basic, this was not Thomas' idea - but rather from Death of the Donkey.
Which would make your argument about Thomas' "proposals" growing government null and void, no?
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So libs, how's that Congressional Resolution to end The War™ coming along?
Jon, I just wanted to point out that the $20,000 idea was mine and was not part of Thomas' well written thesis here.
I will also argue again that "hidden price signals" have very little to do with the overall cost of health care. The problems with cost come from the big ticket "non-shoppable" expenses (heart attacks, strokes, emergencies, pregnancy complications, etc.). Shopping around for a doctor that charges $75 a visit instead of $125 is nice, but it means nothing when you have a heart attack and run up a $100,000 bill does it?
Didn't mean to take credit from you.
Shopping around for a doctor that charges $75 a visit instead of $125 is nice, but it means nothing when you have a heart attack and run up a $100,000 bill does it?
No. You are making a good argument for a government-pays health-care system.
not necessarily for national health care, that the idea that we don't "consume" health care effectively or that by research and shopping around (like one does for a car) would lower the costs of care. I am sorry, but the facts are quite clear. The predominant health care expenses are the big ones that are typically "emergency" situations (and thus cannot be shopped around) and many of these situations occur more frequently as one ages.
Because we don't pay the bills. Just like we don't shop around for an auto body shop. Which explains why they all charge about the same (greatly inflated) prices and write quotes out of the same book (or computer program) that tells them it takes exactly 2.68 hours to remove a fender and 0.48 hours to replace a headlight. Compare that to mechanical repair, where people pay out of their own pocket. There's quite a range of options there, from the dealer to national chains to little independent garages, all with radically different pricing.
Now, if we had to pay out of pocket for a hospital stay, you can be sure there would be a lot of shopping around. Of course you can't shop around on everything (like many ER visits), but there are some very big ticket items (Cancer, AIDS, and organ failure, for instance) that a person could certainly do a bit of shopping around on, and transfer to another facility if necessary. This isn't limited to routine office visits.
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Underlying most arguments against the free market is a lack of belief in freedom itself. - Milton Friedman
This is a huge (and potentially legitimate) problem. And who exactly is going to want to choose the discount organ transplant? Is it of the same quality? This argument will be a political loser for Republicans.
If people were paying their own way (something that I concede will never ever again happen in this country), they would take what they could afford (or what they choose to spend). If I can't afford the Mayo Clinic, maybe I can afford the local hospital. If I can't afford the local hospital, maybe I'll have to look for charity or just do without. If that were the case today, we'd have a pretty well functioning market for health care and much lower costs.
The market for health care doesn't have to be dysfunctional, we have just decided to make it that way back in the 50s and we haven't looked back since. I think it's pretty hopeless at this point. Single payer is inevitable, politically, IMO.
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Underlying most arguments against the free market is a lack of belief in freedom itself. - Milton Friedman
is inevitable, but I don't believe it will be that bad. Health care is hardly a free market now (as we have shown) and costs now may actually be higher than if we had single payer. The real issue is are we going to keep screaming no single payer til the Dems force their plan on us (and win) or are we going to propose our own so we don't end up as Canada Part Deux.
We already have large chunks of the health care system socialized. Going all the way would just give the guy paying the bills (the government, in that case) the ability to ration care, something the private guys have a much harder time doing right now. If we're going to have a freebie system (and that is what we got now), rationing is going to play a major role in it.
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Underlying most arguments against the free market is a lack of belief in freedom itself. - Milton Friedman
Can't find a cite at the moment, but, according to a recent Economist article, government now accounts for better than 40% of healthcare spending if the value of tax code subsidies is figured in.
Medical tourism is a fast growing reality today. Many people leave the US and travel abroad to get everything from discount plastic surgery to discount organ transplants. Here is a link to a CNN special on medical tourism. Additionally here are several links to companies involved in the medical tourism industry.
...a long habit of not thinking a thing wrong, gives it a superficial appearance of being right...
---Thomas Paine---
what run up the price of big HI plans, though they can kill a small one. When Alaska began serious cost containment measures in the early nineties, our two biggest expenses were emergency room care for dependents and psychiatric care for dependents. At that time, ER cost noting out of pocket and psychiatric was 80/20 with no copay, so if you had double HI, it was free. We comprehensively put copays on virtually everything, maybe even everything, while actually increasing coverage limits and saved ourselves a bunch of money. Our State plan has gone from one of the most expensive in the Country to mid-pack amongst the industrialized/unionized states.
I agree with Jon that price signals are needed and work, not just the employee paying something towards the HI - that tends to be regressive and still isn't enough for the employee to comprehend what the HI really costs, but also the employee paying something toward the visit or procedure. There are all sorts of ways to provide signals and incentives if you want to do it. I've never had much trouble getting union cooperation on these measures as long as they're not draconia. They know that money spent on HI just disappears and neither they nor the employer get any credit for the spending, plus it isn't available for wages and premiums.
In Vino Veritas
It came before DoD's comment.
You then seem to follow this with an excellent description of how hidden price signals account for the majority of the problems with health care. That is, the consumers of health care do not see the costs of what they buy.
Really? Funny. I just re-read it, and I seemed to say something about how it's the fact that we insure people over the age of 45, and the government requires all sorts of bells and whistles for them, that are the problems here. I said nothing about hidden price signals. I said something about risk pools and payouts.
For as long as I can remember, personal responsibility has been a "plank" in conservative thinking. If that has ceased to be the case I'm afraid I did not get the memo.
RIF. I didn't say personal responsibility is not a plank of conservative thinking. I said having the government teach it to me is not a plank of Republican thinking.
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Even those who learn from history are surrounded by those doomed to repeat it.
I didn't say personal responsibility is not a plank of conservative thinking. I said having the government teach it to me is not a plank of Republican thinking.
Sounds like semantics to me. The current system insulates people from taking personal responsibility for healthe care. I think you'd agree with that. The current system was implemented, perhaps carelessly, by the government. If the government ceases to encourage the idea of employer-pays health-care it is not exactly the dark night of facism.
The government currently "teaches" people that they do not need to take responsibility for their health care. Asking it to stop doing that cannot really be described as government coercion at work. It is simply exposing people to market forces which they have long been shielded from. That may or may not be a good idea from the standpoint of politics, but it is an idea very consistent with free-market Republicanism.
You may as well argue that welfare reform was an attempt by the Republicans to teach people personal responsibility. Yes, there is a good deal of truth to it. So?
Any proposed change in government action, even a change to government inaction, can be attacked on the grounds that it is an effort to change peoples behavior.
Sounds like semantics to me. The current system insulates people from taking personal responsibility for healthe care. I think you'd agree with that.
No, it insulates them from a portion of the cost of their lives. That's a very different thing.
The current system was implemented, perhaps carelessly, by the government. If the government ceases to encourage the idea of employer-pays health-care it is not exactly the dark night of facism.
The current system was implemented by Democrats and old-school Republicans in 1974. The new system is not about "not encouraging employer-pays health-care," it is about "taxing medical benefits below the line." We don't like taxes, remember?
The government currently "teaches" people that they do not need to take responsibility for their health care.
No, the government requires that group insurance not show you all the costs of your health care. I get hit by a car when I cross the street with the signal. I get a $100,000.00 medical bill. My insurance premium goes up. Where is the personal responsibility for my health care there?
I think you misunderstand what insurance is.
Asking it to stop doing that cannot really be described as government coercion at work.
Taxing some behavior to produce other behavior can be.
It is simply exposing people to market forces which they have long been shielded from. That may or may not be a good idea from the standpoint of politics, but it is an idea very consistent with free-market Republicanism.
We're removing State and Federal regulation of health insurance while we're at it? No, wait, never mind.
You may as well argue that welfare reform was an attempt by the Republicans to teach people personal responsibility. Yes, there is a good deal of truth to it. So?
If you cannot see the difference between removing a government subsidy, and providing an active government disincentive, I cannot help you.
Any proposed change in government action, even a change to government inaction, can be attacked on the grounds that it is an effort to change peoples behavior.
Yes, but you could argue that the sun is green, too. The difference is that a tax like this, with a stated goal of behavioral change, is an attempt to alter behavior by definition. Just a thought.
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Even those who learn from history are surrounded by those doomed to repeat it.
me: The current system insulates people from taking personal responsibility for health care.
you: No, it insulates them from a portion of the cost of their lives. That's a very different thing.
How is it a very different thing? The "portion of the cost of their lives" is precisely the portion pertaining to health care.
The new system is not about "not encouraging employer-pays health-care," it is about "taxing medical benefits below the line."
The new system, as I understand it, is intended to be tax neutral. It proposes to encourage people to shift from employer-paid insurance to employee paid insurance.
I think you misunderstand what insurance is.
I understand insurance to be the process by which an individual buys financial protection for himself to cover potentially expensive events. These may include such things as accidents or crimes which damage either person or property.
If that is not what insurance is, I'd be happy to be corrected.
If you cannot see the difference between removing a government subsidy, and providing an active government disincentive, I cannot help you.
I don't know that all the details are out yet. My understanding is that "individuals who do not receive employer-provided health insurance will be able to get a tax deduction for buying it themselves", as blackhedd put it, and it wil also "cap the deductibility for both individuals and employers".
In other words, the plan will treat employees buying insurance more or less the same as employers buying it. That is, it both removes a government subsidy from one activity and provides incentives for another. Exactly like welfare reform.
Insurance is a process by which large numbers of individuals spread risk across their group by placing money in reserve en masse against unforeseen but understandable risks.
Thus, you are not protecting your house from fire. You are joining in a risk pool with millions of other people so that if your house burns down, you will have be able to recoup that cost with minimal cost to you, or to the other insureds.
I feel it's important to get that out of the way.
How is it a very different thing? The "portion of the cost of their lives" is precisely the portion pertaining to health care.
Because it has nothing to do with personal responsibility, really. By taking a job that has health care coverage, they've already undertaken personal responsibility, as you appear to define it. What you appear to be upset about is that they are not paying more for things outside their personal control, when they arguably could. That has nothing to do with personal responsibility, and everything to do with risk management and loss payout control.
The new system, as I understand it, is intended to be tax neutral. It proposes to encourage people to shift from employer-paid insurance to employee paid insurance.
Is your salary a windfall to you?
That will probably seem like a non sequitur to you.
I don't know that all the details are out yet. My understanding is that "individuals who do not receive employer-provided health insurance will be able to get a tax deduction for buying it themselves", as blackhedd put it, and it wil also "cap the deductibility for both individuals and employers".
In other words, the plan will treat employees buying insurance more or less the same as employers buying it. That is, it both removes a government subsidy from one activity and provides incentives for another. Exactly like welfare reform.
It frightens me, badly, that a nominal conservative can point to an absence of a tax and call it a subsidy.
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Even those who learn from history are surrounded by those doomed to repeat it.
that nominal conservatives can argue so forcefully against the idea of people spending their money as they see fit.
The root of your objection seems to be the definition of the pool. You seem to see people in employer pools as better protected than they would be if they were individuals buying insurance directly from an insurance company. I don't accept that idea as true.
Taxes and subsidies. One of the main themes of conservative thought is that "its your money". That is, when your employer pays money into FICA on your behalf, that is money that could otherwise have gone to you. When an employer spends X dollars on your health care, that is "your" money they are spending, and it would be a good thing if they instead gave it to you to spend as you deem best.
This proposal simply treats your money the same whether it is spent by you directly or by your employer on your behalf. That is, it removes your incentive to have your employer spend your money on your behalf.
This may or may not be a good thing from a health care prespective, depending on your answer to the pool question. But it is certainly an idea in the mainstream of free market conservative thought, and it's startling to see so many people here argue that Big Company LLC can spend your money better than you can. You have already accepted the Democrats argument at this point, the rest is details.
After all, the logical conclusion is that a REALLY big entity can spend it even better, by spreading costs across a really large pool. What bigger pool can there be than the population of the US?
It frightens me badly that nominal conservatives can argue so forcefully against the idea of people spending their money as they see fit.
Oh! So this plan doesn't tax me if I elect to take part of my salary as a benefit plan offered by my employer? Do tell the President.
The root of your objection seems to be the definition of the pool. You seem to see people in employer pools as better protected than they would be if they were individuals buying insurance directly from an insurance company.
I think you're reading someone else's posts. Actually, given your writing to date, it's possible you're reading mine, and just misunderstand it this badly.
One of the main themes of conservative thought is that "its your money". That is, when your employer pays money into FICA on your behalf, that is money that could otherwise have gone to you. When an employer spends X dollars on your health care, that is "your" money they are spending, and it would be a good thing if they instead gave it to you to spend as you deem best.
Well, for those of us who actually keep up with conservative thought, the relevant question is freedom of contract, which means that if I prefer my employer eating my healthcare costs (for less than it would cost me!) to giving me some money, I should be able to take it.
This proposal simply treats your money the same whether it is spent by you directly or by your employer on your behalf. That is, it removes your incentive to have your employer spend your money on your behalf.
No, it taxes you for contracting with your employer to defray part of your healthcare costs as part of your compensation.
But it is certainly an idea in the mainstream of free market conservative thought, and it's startling to see so many people here argue that Big Company LLC can spend your money better than you can.
Well, I guess if "the mainstream of free market conservative thought" is redefined to "having the government tax you to produce results it likes," then yes, we're well inside that stream. To those actual conservatives among us, however, government taxation to produce specific results is bad.
You have already accepted the Democrats argument at this point, the rest is details.
No, I actually understand insurance and conservative thought. You, by contrast, appear to have read some article somewhere that you sorta understood, and here we are.
After all, the logical conclusion is that a REALLY big entity can spend it even better, by spreading costs across a really large pool. What bigger pool can there be than the population of the US?
It's a deadly strawman with which you're dueling. Don't let me interrupt.
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Even those who learn from history are surrounded by those doomed to repeat it.
Re: The current system was implemented by Democrats and old-school Republicans in 1974
I can't think of anything that happened in 1974 that involves healthcare. Medicare and Medicaid were earlier than that. The employer tax break for health insurance was way earlier than that (WWII). Unless that is the year COBRA was enacted I think you need to explaib what you are referring to.
Look it up.
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Even those who learn from history are surrounded by those doomed to repeat it.
I am able to look back on the early 70s and my Grandmother's experience with health care, health ins and Medicare and thinking things were much better then in terms of pre resp and costs? If so, can you give a short answer as to how ERISA changed the market so, because my only experience with that law has been in legal battles over the right to keep ins after leaving an employer, albeit at a much greater price.
Mike Gamecock DeVine @
The Charlotte Observer
"One man with courage makes a majority." - Andrew Jackson
This is an anodyne review of the thing. Suffice it to say that something that started out as an attempt to interfere in pension plans eventually became a stick and carrot that drove all employer-provided insurance, whether for retirement or health.
It's not that ERISA created our current system; it's that it's the seed from which all else grew.
Incidentally, this is why, say, a common offender like UnitedHealthCare almost never gets sued successfully for bad faith -- because almost all of its coverage is through ERISA plans, and ERISA pre-empts bad faith.
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Even those who learn from history are surrounded by those doomed to repeat it.
Mike Gamecock DeVine @
The Charlotte Observer
"One man with courage makes a majority." - Andrew Jackson
are a result of an insular administration filled with yes men and women. There are no conservative voices and their default answer seems to be ''if we become more like Dems, then they'll like us more and we'll be more popular" wrong. wrong. wrong.
The Dems and their media outlets hate everything Republican or Conservative - regardless if it good for the country. Stop trying to be their friends and stand up for the core beliefs of the party.
Tax increases are wrong - they kill jobs, hurt the economy and cause misery.
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"Enlightened statesmen will not always be at the helm." -- James Madison
Health benefits are a form of compensation and should be treated the same as cash compensation. Otherwise we have the situation we have now where most people’s health care is tied to their jobs.
The proposal would treat health care benefits as income after the first $7500 ($15,000 for families) in benefits which would have the effect of lowering taxes for about 80% of those with employer policies. Not to mention providing the same benefit to those who buy their own policies as it would to employers.
The proposal is supposed to be revenue neutral over the next 10 years which makes it neither a tax cut nor a tax hike. It does however simplify the tax code and remove one of the perverse incentives that lead to the third-party payer problem we have today.
Dear voters:
Health benefits are a form of compensation and should be treated the same as cash compensation. Therefore, we are going to begin taxing your health care benefits.
The proposal would treat health care benefits as income after the first $7500 ($15,000 for families) in benefits which would have the effect of lowering taxes for about 80% of those with employer policies. Sure, you're being taxed on this above-the-line now, but the good news is that now you'll have to treat a portion of this as income, and the rest as taxed above the board!
And good news to all of you with pre-existing conditions: This will help eliminate that third-party payer problem we have now!
Who's with me?!!
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Even those who learn from history are surrounded by those doomed to repeat it.
And Thomas' glibness is exceeded only by his ignorance. It's pathetic when someone capable of only the most superificial level of policy analysis takes incredibly snarky jibes at people who actually understand the substance.
Perhaps you can show me where I'm in error. Your own post is remarkably short on policy prescription, and, given that all Thorley did was reiterate the White House's press release, by extension short on substance.
Do share.
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Even those who learn from history are surrounded by those doomed to repeat it.
Other than pajama-clad bloggers who know next to nothing about economic substance, the conservative community generally supports capping the exclusion for employer-provided insurance. It's a subsidy, and it's a subsidy with perverse and inflationary consequences. It's a subsidy because the payor gets a tax deduction and the payee gets a tax exclusion. It's the double tax break that creates the economic equivalent of a subsidy, when most forms of labor compensation (including, most importantly, wages and salary) are taxable to one of the two parties to the transaction.
But I suspect you don't put much faith in what I say, as you clearly consider listening to yourself talk to be all the education you need. So I'll try a couple other sources. First, see the National Review's lead online editorial on 1/22/07. The concluding paragraph from our good friends at NR reads:
"[T]he president’s plan is solid. If enacted, it would be the boldest free-market health-care reform ever, and the biggest step toward tax reform in years."
Want more? Then I point you to S. 3754, introduced in the 109th Congress (7/27/2006) by Senators TOM COBURN, Mel Martinez, and Johnny Isakson. The bill would cap the exclusion at a MUCH LOWER level than the President's plan: $5000 for self coverage and $11,500 for family coverage. It would then use that money to create refundable health care tax credits for low income people.
Next time you run into Coburn, let him know that you think he's a big government liberal tax increaser. Or, you could reconsider the merits of your argument, asking yourself if perhaps your mouth moved faster than your head.
Other than pajama-clad bloggers who know next to nothing about economic substance, the conservative community generally supports capping the exclusion for employer-provided insurance.
No, they support separating health insurance from employment, a goal with which I can agree. Because they support that greater goal, they're willing to overlook a violation of a first principle to get there. That's where we differ.
I'm wearing Dockers and a button-up shirt, by the way. I don't dress to tease you.
It's a subsidy, and it's a subsidy with perverse and inflationary consequences. It's a subsidy because the payor gets a tax deduction and the payee gets a tax exclusion.
No, it's a non-taxation event, something that Republicans and conservatives are supposed to be giddy about. Saying "it's a subsidy" again and again doesn't turn a lack of taxation into a material transfer.
It's the double tax break that creates the economic equivalent of a subsidy, when most forms of labor compensation (including, most importantly, wages and salary) are taxable to one of the two parties to the transaction.
Putting aside the silliness of this argument, there was a time, once, when we used to suggest that not taxing income was a good thing. Now, I have three decades and change under my belt, so maybe I'm too long in the tooth for you whippersnappers, but back then, we even used to make analogies between taxation and slavery.
I guess we need more slavery these days.
But I suspect you don't put much faith in what I say, as you clearly consider listening to yourself talk to be all the education you need.
I don't talk to myself. It doesn't make for good conversation. Talking to you isn't doing a world of good for me, either, which causes me to worry that you're boring yourself silly.
So I'll try a couple other sources. First, see the National Review's lead online editorial on 1/22/07. The concluding paragraph from our good friends at NR reads:
"[T]he president’s plan is solid. If enacted, it would be the boldest free-market health-care reform ever, and the biggest step toward tax reform in years."
Oh, well then. National Review likes it. I guess that wins. I suppose we now simply agree with whatever National Review says? In the old days, we used to argue -- yes, even with National Review. I know, I know, antiquity. We didn't understand how all-conquering the Appeal to Authority could be.
Want more? Then I point you to S. 3754, introduced in the 109th Congress (7/27/2006) by Senators TOM COBURN, Mel Martinez, and Johnny Isakson. The bill would cap the exclusion at a MUCH LOWER level than the President's plan: $5000 for self coverage and $11,500 for family coverage. It would then use that money to create refundable health care tax credits for low income people.
Oh, and Senators -- one of whom is among the dimmest in the chamber, one of whom is A-OK with taxes, and then Tom Coburn, who apparently reads a lot of National Review -- like it. Well then. The all-powerful Appeal to Authority would only be better now if you included a White House press release.
Next time you run into Coburn, let him know that you think he's a big government liberal tax increaser.
No, I'll tell him that I think he's wrong on this, and that he's working to a good goal through cruddy means -- that, politically, constitute a non-starter. Were you not interested in hitting The Same Point Over and Over Again (with Appeals to Authority!), you might have discerned that.
Or, you could reconsider the merits of your argument, asking yourself if perhaps your mouth moved faster than your head.
I ask that all the time, and sometimes the answer is yes. Here, I don't think so; but I at least offered something besides the same words over and over again, complete with an appeal to authority (note how I'm using the same words over and over again to try to help you understand -- it appears to be the only sort of discourse that you use) to make my point.
Just a thought.
The second two Matrix movies sucked, by the way.
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Even those who learn from history are surrounded by those doomed to repeat it.
I can cut to the crux of the matter right now. It's the diference between form and substance. Your arguments suggest that you only see the form and thus base all your conclusions on that form, while ignoring the underlying substance. That's a grievous logical error that will lead you to confuse big government with small government, and free markets with socialism. You end up advocating quite the opposite of what you intended.
Let's use a simple exercise. Let's say you and your friend each owe $20,000 in federal income taxes. Now let's look at two alternative scenarios. Under scenario A, the government enacts a $5,000 cash grant for each individual who purchases a new Toyota Prius. This incentive is enough to convince you to buy a Prius. You do so and you get a $5,000 check from the government. In addition, you pay $20,000 in income taxes. For your friend, it's not sufficient incentive. Therefore, your friend still pays $20,000 in taxes but gets nothing back.
Under scenario B, the government does not enact that cash grant, but instead enacts a $5,000 tax credit for each individual who purchases a new Toyota Prius. This incentive is enough to convince you to buy a Prius. You do so and you reduce your tax payment to $15,000 (and you receive no grants from the government). For your friend, it's not sufficient incentive. Therefore, your friend still pays $20,000 in taxes but gets nothing back -- just like under senario A.
What's the difference between A and B? The answer is that while A and B differ in form, they do not differ in substance. The cash flow changes but the ultimate economic effects, incentives, etc. are IDENTICAL. Under A, you pay higher taxes but $5,000 of those taxes are recycled back to you. Under B, you simply tell the government you'll save it the trouble of mailing out your check by just sending less in taxes in the first place. (Although, if you are in a tax refund position due to withholding and the credit increases your refund, then even this formalistic distinction evaporates.) Your friend pays $20,000 in taxes and gets nothing from the government under both scenarios.
Both A and B will provide the same incentive for you (and you friend) to buy a Prius; both A and B will result in you (and you friend) being in exactly the same economic/financial position; and both A and B will cause exactly the same distortion of resource allocation as some individuals respond to government policy by over-consuming Priuses.
But because you only look at the form and not the substance, you will try to tell me that scenario A is a horrible, big government, socialistic solution, whereas scenario B is a small government, free market, low tax solution. That's nonsense, and the inability of many conservatives to understand that it's nonsense has led conservatives to turn the tax code into a grosteque device for both social engineering and economic planning -- all under the deceitful guise of "smaller government".
...that scenario #1 enables the government to keep thinking of my money as something that they have a right to arbitrarily take away. For that matter, slipping in scenario #2 as the small-government position was quite good, too. The actual small-government position would be scenario #3: the government reduces everybody's taxes by $5,000 and suggests that we spend the savings on a Prius. And if we don't, they leave us - and our money - the heck alone.
Moe
PS: You no longer have the privilege here of belitting your opponents or their opinions. The next violation of this will be your last.
The Fuzzy Puppy of the VRWC.
I agree completely that scenario #3 is the actual small-government position -- and I would support #3 over the other the other -- but that's missing my point (or perhaps even reinforcing my point).
My point is that NEITHER of the first two scenarios are "small government." And in fact, both represent an expansion of government into economic decision-making. Your third scenario completes my argument in that it is the ONLY one of the three that truly "let's people keep their own money" in a meaningful way -- meaningful because they have discretion over how to use the money we let them keep. Under the second scenario, you get to "keep" your money ONLY IF you spend it on a Prius -- which isn't really keeping it at all.
The first two scenarios are the same. Your addition is different from those two in SUBSTANCE as well as in form. But claiming that scenario 2 and scenario 3 are similar because they both involve the form of a tax reduction is wrong.
Correct me if I'm wrong here, but it sounds like we are at least partially agreeing here -- except that you seem to differentiate scenarios 1 and 2 based on some vague psychological effect about how the government "thinks about" the money.
In scenario #1, the government is giving me somebody else's money while taking some of mine. In scenario #2, the government is giving me some of my money back and leaving somebody else's money alone. While still not optimal, this is clearly an improvement in the way that the government is thinking about our money. Half of our government's fiscal woes stem from its unchallenged belief that simply because it can get away with throwing other people's money around, doing so is somehow good.
The Fuzzy Puppy of the VRWC.
Once again, what you say is only true if you elevate the form above the substance. If you can't get past this way of thinking, then there's no point continuing. I don't have the energy to break through stubborn refusals to see past superficial forms to the underlying substance.
I can cut to the crux of the matter right now. It's the diference between form and substance. Your arguments suggest that you only see the form and thus base all your conclusions on that form, while ignoring the underlying substance. That's a grievous logical error that will lead you to confuse big government with small government, and free markets with socialism. You end up advocating quite the opposite of what you intended.
Really? Because where I come from, not taxing someone is the exact opposite of taxing them. Taxing them controls them, and therefore expands government. Not taxing them does not control them, and therefore limits government. But let's continue.
[Scenarios A and B expounded at length.]
Both A and B will provide the same incentive for you (and you friend) to buy a Prius; both A and B will result in you (and you friend) being in exactly the same economic/financial position; and both A and B will cause exactly the same distortion of resource allocation as some individuals respond to government policy by over-consuming Priuses.
This would all be terribly interesting if it had anything to do with the subject of our discussion. It doesn't, but that's because you're within spitting distance and don't see the place marker.
There are two flaws in your analysis:
First, you are equating a direct subsidy with not taxing the equivalent amount of revenue. As we do not tax anyone or anything at 100%, this is absurd: If the government gave me $5,000 a year to buy insurance (the cost of the insurance), that would be a subsidy. If the government merely elected not to tax the amount to buy the insurance, then even under your somewhat uncertain logic, they would not be "giving" me $5,000, they would be "giving" me some percentage of $5,000, which is to say, the amount they would otherwise be taking in taxes. Thus, when we are discussing changes in how this compensation is taxed, only someone who has never paid attention to how this money is paid or how it was taxed before would conclude that the current tax structure is equivalent to a direct subsidy.
Second, you're creating a false analogy. Currently, the government does not tax that component of my compensation that my employer pays for health care coverage. It is not the same as the government telling me that if I spend some portion of my income directly on health care coverage through my employer, they will remove that amount from my taxes. They have declared -- ah, Republican vestiges! -- that a portion of my compensation will not be taxed. Now, assuredly, this incentivizes me to find compensation of that sort, because the rest of my income is being taxed; but all this does is remove that compensation from my taxable income. Which leads us back to "First."
But because you only look at the form and not the substance, you will try to tell me that scenario A is a horrible, big government, socialistic solution, whereas scenario B is a small government, free market, low tax solution. That's nonsense, and the inability of many conservatives to understand that it's nonsense has led conservatives to turn the tax code into a grosteque device for both social engineering and economic planning -- all under the deceitful guise of "smaller government".
See, I understand the form and substance quite well. If Bush's proposal was "we'll make individual health premiums taxed the same way as employer options," or any variation thereof, I'd be there with bells on. I'm all about lowering taxes, taking income out above the line, and level playing fields. Woo hoo. What you appear to overlook is that the government is doing the exact opposite of a subsidy -- they are taxing your income in a way to produce, oh, say, "social engineering and economic planning -- all under the deceitful guise of 'smaller government.'"
You, however, are so hung up on the danger of a subsidy -- a form consideration, it would appear -- that you've overlooked the danger of targeted taxation.
I think you missed some substance.
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Even those who learn from history are surrounded by those doomed to repeat it.
You might consider the use of proper English. There are not more than one Thoma, each owning a glibness; rather, there is a single Thomas. Hence, Thomas's glibness.
Good luck.
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Even those who learn from history are surrounded by those doomed to repeat it.
You seem to see yourself that way, and so I gave you the benefit of the doubt. Assuming that's the case, my use of the possessive is entirely correct. See page 1, Strunk and White.
Merovingian 1, Thomas 0.
You mistake "being stupid, but being somehow slightly smarter than a fellow who named himself after a long-dead line of kings" and "being possessed of the certainty that one is an Apostle of Christ."
Given your ramblings downthread, I shouldn't be surprised.
Your counting, as well as your punctuation, seems off.
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Even those who learn from history are surrounded by those doomed to repeat it.
as income lower taxes? That confuses me a little here. The bad thing about this proposal is that it really does nothing to increase either the number of those insured or lower medical costs, it simply shifts the tax benefits around (maybe).
The proposal from the administration would exempt the first $7500 ($15,000 for families) from income and payroll taxes. The effect of this change is supposed to be revenue-neutral which wouldn’t make it a cut per se but nor would it be a tax increase.
Your phrase for today, Thorley.
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Even those who learn from history are surrounded by those doomed to repeat it.
The proposal would treat health care benefits as income after the first $7500 ($15,000 for families) in benefits which would have the effect of lowering taxes for about 80% of those with employer policies.
Why would this be a tax cut for "80% of those with employer policies."? If what you're saying is that 80% of the plans out there are worth less than 7,500/15,000, wouldn't this mean that, for such folks, their taxes simply wouldn't increase as a result of the legislation? Since when is lack of an increase the same as a cut?
I'm sure I'm missing something obvious, but would appreciate a clarification by any kind sole who's got a better grasp of this issue.
You get the whole deduction, anyway. So you come out ahead on the deal. You also get a FICA deduction (your half only, I guess) for the 7500/15000 which is the bigger factor in the "tax cut" aspect.
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Underlying most arguments against the free market is a lack of belief in freedom itself. - Milton Friedman
Between this and Petreaus telling the Senate midgits led by McCain that five army brigades were going to Baghdad in May, NOT TO KILL INSURGENTS, but to protect civilians, I've pretty much had it with this Administration and our Compassionate President.
___________________
If "pro" is the opposite of "con", what is the opposite of "progress"...
Senior Writer
The way you protect the civilians is to kill the insurgents. What Petreaus was saying is that the mission will be different in that we're not going to leave those neighborhoods behind for the insurgents to reenter after we kill a bunch.
International Affairs is just Political Science with an accent.
Several committee members noted that Petraeus recently oversaw the writing of a new Army manual on how to counter an insurgency. Sen. Edward Kennedy asked him why an extra 21,500 would make a significant difference.Petraeus replied that the important factor was how extra troops are used, not their numbers. Their main focus, he said, will be on securing the civilian population of the capital rather than killing insurgents.
We'll see.
___________________
If "pro" is the opposite of "con", what is the opposite of "progress"...
Senior Writer
behest, also called out the defeatists as enemy emboldeners, whichmakes his appearance crucially important.
Mbeck, I think you didn't hear correctly on this.
Mike Gamecock DeVine @
The Charlotte Observer
"One man with courage makes a majority." - Andrew Jackson
I just really disgusted today.
___________________
If "pro" is the opposite of "con", what is the opposite of "progress"...
Senior Writer
Try as I might, I can't find anything good about the proposal, from anyone's perspective, either in substance or in politics. As regards the substance: what you said.
As to the politics: it's a tax increase, which Republicans and other rational people will despise, and the Dems will hate it because it will punish people for being insured, 39 millllllion yada yada, only the rich can afford this tax, et cetera, ad blovium. Or perhaps they'll accuse the President of hypocrisy in any of a number of ways.
I just thought of something. What if the Dems gave him this idea in their recent little retreat thingie? "Propose this, Mr. President, and we'll support you for the good of the country."
Yeah. But that's how stupid the idea is, that I can only hope it to have come from the usual source of stupid things.
The Academy: researching the Illiberal Arts
one of the greatest Presidents in modern history, and perhaps all of American history.
Slowly but surely, he is eroding my confidence and trust I placed in him. Count me in the 75% of Americans who answer "disapprove" when a pollster calls them now.
This is aboslutely sick and horrendous. Where can we find a real conservative? Are we really this lost as a party?
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After the 2006 elections, al Qaeda released a statement saying they were happy Democrats won. That should tell you all you need to know.
Nowhere in the leadership of the Republican Party.
___________________
If "pro" is the opposite of "con", what is the opposite of "progress"...
Senior Writer
You’re a persistent cuss, pilgrim.
John Wayne to Jimmy Stewart in The Man Who Shot Liberty Valance
to cross post your r4'08 piece on McCain over here at redstate. I have referred to it in my Clinton mafia blog, but it really needs to be known by all. You really did us a servce with that one! as you usually do bro.
http://race42008.com/2007/01/23/mccain-blasts-cheney-rumsfeld/
Mike Gamecock DeVine @
The Charlotte Observer
"One man with courage makes a majority." - Andrew Jackson
Can you explain how the plan pushes you from your employer's risk pool into an individual risk pool and suddenly forces you to change plans to one that will not cover any of your pre-existing conditions? As far as I can tell, nothing in the proposal precludes or limits employers from continuing to offer exactly the same benefits plans they currently offer. The only issue is whether you will be taxed on the value of the benefit above a certain level. That is currently the tax situation for employer provided life insurance -- the first $50k of employer provided life insurance is not taxed, anything above that is taxed as deemed income (or purchased with after-tax wages).
Regarding the structure of the tax proposal, it seems to me that the concept -- treat health insurance the same from a tax perspective for everyone, whatever their employment situation -- is a reasonable concept. In fact, I would argue that it is a solidly republican/conservative concept to treat everyone the same under the tax code rather than create situations where one group of people receives a tax benefit not available to others.
We can argue about the total tax burden on people -- lower is better we can all agree -- but arguing that the government shouldn't enact any changes to the tax code that alter the status quo because doing so would increase the tax burden on some people condemns us to remain in a world of complex tax rules subject to gamesmanship.
Frankly Bush could do himself one better in my book by proposing to strip all itemized deductions (including the sacred cow mortgage interest deduction), and radically simplify the tax code.
Can you explain how the plan pushes you from your employer's risk pool into an individual risk pool and suddenly forces you to change plans to one that will not cover any of your pre-existing conditions?
Well, that's two things. The first one comes from the stated White House goal. The second part, about exclusions, comes from even a minimal knowledge of how individual health care insurance works. Call Humana or BlueCross right now, and tell them that you have cancer and would like to buy a new policy. They'll either say (1) they won't write you at all, (2) they'll write you, but with an exclusion for cancer treatments, or (3) they'll write the whole shebang, but at a cost that will absolutely cripple you.
As far as I can tell, nothing in the proposal precludes or limits employers from continuing to offer exactly the same benefits plans they currently offer.
(1) Yet.
(2) How are we being taxed on these things now?
The only issue is whether you will be taxed on the value of the benefit above a certain level. That is currently the tax situation for employer provided life insurance -- the first $50k of employer provided life insurance is not taxed, anything above that is taxed as deemed income (or purchased with after-tax wages).
Right. Remember when Republicans didn't raise taxes?
Regarding the structure of the tax proposal, it seems to me that the concept -- treat health insurance the same from a tax perspective for everyone, whatever their employment situation -- is a reasonable concept. In fact, I would argue that it is a solidly republican/conservative concept to treat everyone the same under the tax code rather than create situations where one group of people receives a tax benefit not available to others.
Yes. It is very Republican to raise taxes.
We can argue about the total tax burden on people -- lower is better we can all agree -- but arguing that the government shouldn't enact any changes to the tax code that alter the status quo because doing so would increase the tax burden on some people condemns us to remain in a world of complex tax rules subject to gamesmanship.
I'm prepared to deal with that if it keeps taxes lower.
Frankly Bush could do himself one better in my book by proposing to strip all itemized deductions (including the sacred cow mortgage interest deduction), and radically simplify the tax code.
Ah. One of those.
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Even those who learn from history are surrounded by those doomed to repeat it.
I'm really not trying to be difficult, maybe I'm dense here. I've read the WH summary a couple times. I don't see anything that would discourage employers from providing health insurance. The incentives for employers to sponsor health insurance is all about attracting and retaining employees. Whatever the tax code situation, that isn't going to change.
I understand the difficulties with getting individual insurance, but that is no better or worse under the Bush plan.
Regarding what is/isn't taxed. We all want lower taxes, the real question is, what we want the tax code to look like. Your complaint is that Bush is proposing making something taxable (health insurance) that currently isn't taxed. The problem is that while you and I get health insurance from pre-tax dollars, some people are forced to buy their health insurance with post-tax dollars. It's unfair to those who don't have the benefit that you and I have -- employer sponsored health insurance. What Bush is proposing makes the tax code more consistent for persons in different situations. That is good.
I'm all for lower taxes and if Bush said I'm going to do this, and at the same time I'm going to reduce marginal tax rates by x% so that nobody actually pays more taxes, I'd be really happy. But we all know that won't happen.
it should not be taxed, because it isn't income in any real sense. Try to spend it, borrow against it, or get a refund on it. Not fungible.
We're going to be taxed on income to our insurance company.
To address your question, however, if the proposed tax goes the way of all taxes and expands in every direction, and when inflation makes the $7500 threshhold into a fond memory (think Alt. Min. Tax), getting your own insurance will be a lot more attractive.
Furthermore, as insurance rates rise, the taxes will rise along with them.
The Academy: researching the Illiberal Arts
By saing "it isn't income in any real sense" you are demonstrating the WH's argument that people need to be more aware of the cost of their health insurance.
I am your employer. I will either (i) pay you $30,000/year and pay your $10,000/year health insurance premium, or (ii) pay you $40,000/year and offer you the same health plan, but you have to pay the $10,000/year premium. From the employer's perspective, the cost of hiring you is the same, $40,000/year. Presuming you want the insurance, the benefit (whether in cash or in-kind) you receive for working is the same.
I don't get your comment as to how the threshold level makes getting your own insurance any more or less attractive. The same deduction threshold would apply whether a buy an employer-provided plan or buy a private plan. In fact, given that the employer can negotiate a better premium rate for the group plan, you will almost certainly get more insurance for the $ through the employer sponsored plan than you could through an individual plan.
...you are demonstrating the WH's argument that people need to be more aware of the cost of their health insurance.
I had no idea we were electing nominal republicans so that they can use government to make us "more aware of the cost of their health insurance" - as if to say that:
1) We're not already aware
2) That it's the government's business how I chose to set up a contract to work with my employer
3) That the alternative - the eventual taxing of ALL employer provided benefits - is something that conservatives want to see
On the domestic front, George Bush is cementing his legacy as the best Democrat President in modern history. I hope you'll forgive those of us who have been fighting against these sorts of things for years for continuing to fight them in spite of their nominally republican face.
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So libs, how's that Congressional Resolution to end The War™ coming along?
That is currently the tax situation for employer provided life insurance -- the first $50k of employer provided life insurance is not taxed, anything above that is taxed as deemed income (or purchased with after-tax wages).
And this is a good thing? Sounds to me like another way for the Democrats to "soak the rich" that also just so happens to apply the middle class.
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Underlying most arguments against the free market is a lack of belief in freedom itself. - Milton Friedman
He would be talking about Iraq. I guess he's just waiting until his November deadline to roll by so he can start the "redeployment" so there's not much need to talk about Iraq any more.
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Underlying most arguments against the free market is a lack of belief in freedom itself. - Milton Friedman
I like the tax deductibility of premiums for people who do not get medical insurance paid by their company. It is in the public interest for people to buy private insurance and thus avoid cost-shifting their care onto the public sector when things go wrong.
I don't like the offsetting taxation of premiums for gold-plated health programs. One has nothing to do with the other. For example, the premiums paid by MegaCorp for their Executive VP of Something in Chicago have nothing to do with the decision of John Doe's decision not to buy health insurance as sole proprietor of the Acme Custom Widget Shop in Peoria.
If we need something to pay for the lost revenue for the government, why not impose a strategic tax - like on imported oil?
If we need something to pay for the lost revenue for the government, why not impose a strategic tax - like on imported oil?
Why impose a tax at all? If we need something to replace the revenue, we can pay for the tax deduction out of the corporate welfare budget.
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Underlying most arguments against the free market is a lack of belief in freedom itself. - Milton Friedman
Let's tax professional sports tickets. And consumer electronics. And a new gas tax would be good. And W could replace Teddy Roosevelt's telephone tax that paid for the Spanish American War.
This is just a exercise in seeing just how pathetic our "leadership" can possibly be.
___________________
If "pro" is the opposite of "con", what is the opposite of "progress"...
Senior Writer
And then W can go on wearing a sweater and tell us to turn down the thermostat. Maybe they came up with this SOTU speech on a dare.
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Underlying most arguments against the free market is a lack of belief in freedom itself. - Milton Friedman
the malaise...
___________________
If "pro" is the opposite of "con", what is the opposite of "progress"...
Senior Writer
tax increase.
Some extremely simplistic "play #'s"
40,000,000
Americans w/o insurance
3
average household size
13,333,333
policies to be purchased
$10,000
assumed policy price
$133,333,330,000
total policy cost deductible
30%
assumed tax rate
$40,000,000,000
total cost to government
Although these #'s are incredibly ballparkish, I think a case could be made to add $40 billion to the budget to encourage the expansion of the private health care system. And it won't be $40 billion:
-because some people will not buy the insurance (this is unwise, but what can you do?)
-it does not deduct the costs that would otherwise be shifted to Medicaid
They have everything to do with each other. Providing an unlimited subsidy (as the current tax system does) for extravagant health plans is inflationary, and drive up the cost of health insurance in a manner that prices other families out of the market. Capping the subsidy reduces the inflation so that those who buy in the individual market can better afford it. Also, if you don't have a level playing field as between employer-provided plans and other plans, then government is distorting the allocation of resources and causing economic inefficiencies.
Providing an unlimited subsidy (as the current tax system does) for extravagant health plans is inflationary, and drive up the cost of health insurance in a manner that prices other families out of the market.
I understand now. You belong to the "if it's not being taxed, it's being subsidized crowd." Assuredly, it stretches the word "subsidy" almost beyond meaning, and of course, there is not a one-to-one relationship between a rate discount and a direct (literal) subsidy; but at least I understand where you're coming from now. Thus, Congress subsidizes the middle class by taxing them at a lower rate than that at which they tax the rich (who are simply being subsidized less). The poor receive double subsidies, in the form of income transfers (real subsidies) and tiny or no taxation (your idea of subsidies).
Gotcha.
Capping the subsidy reduces the inflation so that those who buy in the individual market can better afford it.
I don't know if you've looked, but in many states, you can actually buy individual coverage with the same bells and whistles (assuming you have no pre-existing conditions...) as with group coverage -- for less money. Thus, and never let it be said I don't research my topics, I could go to individual insurance right now, same bells and whistles, different company, and save on the order of $750 a month.
But, heck, let's not let facts get in the way of a good row.
Also, if you don't have a level playing field as between employer-provided plans and other plans, then government is distorting the allocation of resources and causing economic inefficiencies.
I know! Like how they tax gas at one rate, and coal at another! Otherwise, we'd all be driving coal-powered cars!
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Even those who learn from history are surrounded by those doomed to repeat it.
Don't let Bush fool us again with this health care "plan" as he did with prescription drugs. We got prescription drug benefits not to attract liberals and seniors, and not to help the poor, but to get Bush's business buddies out of the prescription drug business for seniors.
Company sponsored health care is still health care in the private sector! Since when was it a government program? So Bush can't be doing this to bring on a "private sector" solution. We already have that.
It appears to me he is trying to get his business buddies out of the health care business now as well. But then what? With everyone forced to buy their own coverage, we will likely get Hillary's universal government health care. I don't know if he, Bush, cares about that or not. His goal is to help his business buddies get health care off their balance sheets. If you disagree, what else could it be?
Bush is the old republican big business stereotype from the 50's and 60's alive again. The rockefeller wing of the party lives!
Are you trying to say that government has an obligation to keep private companies in the business of offering healthcare? That sounds like socialism-lite to me.
With everyone forced to buy their own coverage, we will likely get Hillary's universal government health care.
Unless you believe that the free-market leads to socialism, this makes no sense.
I think government should stay out of this debate. Is taxing health care benefits keeping government out of this, or bringing it in?
Since business at least subsidizes a part of the health care cost, most who belong to employer plans pay a portion of the amount, not the total amount. If the businesses discontinue their managment of the health care program, do you think they will raise salaries to make up the difference in compensation?
Second, businesses can get special group rates when offering health coverage, something individuals cannot get.
Bush's plan will have the affect of driving up health insurance premiums and direct costs on millions of people if these businesses cease offering health care as a benefit to employment. Thus fewer and fewer people will be able to afford coverage. How do you think that will play out today? I think it will open the door to HillaryCare.
Free markets don't lead to socialism. Governments do. With plans like this.
at least most of it is, inasmuch as employers can offer health insurance pre-tax, a vestigial remain of WWII wage and price controls. Consequently, most employees haven't a clue how much their employer is paying on their behalf and couldn't care less how they use and abuse the plan. Back in the early nineties before we got serious about cost containment and making the employee bear at least some of the cost of medical care, our two single biggest expense categories were dependent emergency room visits and psychiatric care of dependents. Since it didn't cost them anything, the mommies just took their babies to the emergency room for the sniffles or whatever. Also since it didn't cost anything and all the kid pshrinks were advertising that they would make Johnny behave and make As, they were checking them in for four and six week vactions at the brat resorts. It was amazing what slapping some co-pays on those did for costs.
In Vino Veritas
now I can't divulge my sources, but the centerpiece is an interactive holograph of Hillary in every home, which will yell at us when we have too much salt, sugar, fat and (just to round things out) fun.
It looks like he would exempt the $7500/$15000 from FICA, as well. That would make it a tax *cut* for most who get their health care through their employers. I could live with that (hey, it would reduce my taxes).
Of course, it won't happen, because, as someone else pointed out, the union employee crowd would probably be overrepresented in the "gold plated insurance" group.
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Underlying most arguments against the free market is a lack of belief in freedom itself. - Milton Friedman
It would reduce your taxes on you and for now. But think about
- the economy as a whole, the big picture, rather than your own personal case
- your own case when a Band-Aid cost $7500, which may be sooner rather than later
But the big point is that Taxes never go away, expecially the ones that we never see.
The Academy: researching the Illiberal Arts
I'm not a proponent of the proposal and I concur with the OP's opinion that it is a huge waste to address this now, when we got more important things going on, but it's not all middle class tax hike, either.
the economy as a whole, the big picture, rather than your own personal case
I'm not sure it will have a huge effect one way or another here... on a big picture basis, it is revenue neutral (at least for now). And I don't see how the end result is any more or less distorted than the status quo is.
your own case when a Band-Aid cost $7500, which may be sooner rather than later
If health care continues to grow at the rate it has in the past few years, we are totally boned no matter what happens. That rate of growth is unsustainable. This does provide some additional incentive for employees to control health care costs. Not much, maybe not enough to make any difference, but it is there.
But the big point is that Taxes never go away, expecially the ones that we never see.
Well, we would certainly see this one as it would added into our earned income. It's not a hidden tax like the employer paid share of FICA like elimination of deductibility on the employer side would be.
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Underlying most arguments against the free market is a lack of belief in freedom itself. - Milton Friedman
and is going to get more and more important. If the GOP does nothing on this issue it will cost it serious support in elections. Give the President credit for trying to do something worthwhile here without going after "pie in the sky" ideas from either the Left or the Right.
I abhor any tax increase, I do see the logic in the argument that one be taxed for compensation. But, I think Romney does this in a better way. I propbably need to read blackhedd's stuff on this more in detail when I get time.
I would say this though. I don't think this SOTU should be a laundry list and that while I think health ins is worthy to be included, this really needs to focus heavily on the war.
Mike Gamecock DeVine @
The Charlotte Observer
"One man with courage makes a majority." - Andrew Jackson
Is what this does with self insured plans, where the companies pay for any claims out of pocket instead of paying for insurance. Is the total cost going to be determined at the end of the year by adding up all the claims, and applied retroactively? That could result in a very unpredictable employer paid cost, depending on what happened during the year.
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Underlying most arguments against the free market is a lack of belief in freedom itself. - Milton Friedman
1) the actual dollar claims paid during the year 2) a reserve calculated for claims incurred but not processed by year-end and 3) administrative fees paid to process the claims.
Companies must have reliable estimates to close their books for the year. So the numbers are already available.
While there is some unpredictability, the variations are not too bad unless major plan changes are being implemented.
If a smaller self insured plan has an employee who has a million dollar health event that year, that could cause some serious problems for the other employees. Self insurance has become a popular option for smaller and smaller employers.
It also eliminated the whole "employees will choose lower cost options" rationale, since the employees can't know the cost of what they are choosing at the time they are making the choice.
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Underlying most arguments against the free market is a lack of belief in freedom itself. - Milton Friedman
there is a backup insurance plan with normal premiums per worker that kicks in if someone's claims exceed a given dollar amount.
I rather doubt the healthcare situation is going to be resolved by a lame duck President in the next 2 years. OTH, blowing Iran and Syria back to hunter/gather status has some merit.
Envisioning when all that is Left is the Right.
case for the GWOT and in Iraq; tied the Iraq war to the GWOT and our security at home; drove home the hypocrisy of any that voted for the war and now wants to abandon brave allies and seek defeat; advocated more drilling for domestic oil, and forced an applause line that showed Pelosi and the dems to show their appeasing cravenness for what it is on national TV.
I spit on the dems.
I proudly call George W. Bush my President.
Mike Gamecock DeVine @
The Charlotte Observer
"One man with courage makes a majority." - Andrew Jackson
The neo-cons and paleos have no problem with state action for the Betterment of Our Nation, and the conservatives do.
Count me with Thomas. If this President tries to raise taxes, I'm washing my hands of him and regretting my vote for him, war or no war.
Run like Reagan!
I think the essence of the Bush plan is to provide a tax cut for individuals for health ins, but to make that feasible and to get us eventually to a maarket based system of individual policies, a cap on the current tax cuts for businesses is necessary or no one currently covered by a company plan would switch.
Legislative compromises could also result in some sort of phase out of the cap.
Therefore, it seems to me that a revenue neutral policy that changes tax policy is not a tax increase that conservatives should object to.
If we are going to fix the 60 year old messes, we are going to have to have changes that phase us out.
IMHO
Mike Gamecock DeVine @
The Charlotte Observer
"One man with courage makes a majority." - Andrew Jackson
"Revenue neutral" usually only refers to the government, not to the affected taxpayers. So I'd have to run the numbers.
And in any case, attempting to use tax policy to change consumer behavior is not something I support period, unless it was tax policy that got us into this perverse situation to begin with.
However I think it's regulation and subsidy that got us where we are today, so I don't think tax changes will be of any help unless they are paird with deregulation and subsidy reduction.
Run like Reagan!
bush deals with one aspect that will free up buyers to enter a market and drive down prices
states will need to change laws that force ins cos to cover certain things that are expensive to cover
bush called for a more extensive malpractice reform at the national level that we had, I think, his first term
Mike Gamecock DeVine @
The Charlotte Observer
"One man with courage makes a majority." - Andrew Jackson
You foolish neocon, Coburn!
Don't you people know that Neil and Thomas at RedState have spoken on the True Conservative Position?
I hope thay are abasing themselves into the dust at this point, as I am.
If he's backing a tax increase I'm sorely disappointed.
As for Norquist, I'm surprised you'd even bring him up, given his alleged ties with foreign Islamists.
Run like Reagan!
This idea almost (and I do say almost) gives the Kos kids some credence as to the stupidity of our president. Not only can this not pass, this kind of idea could spell doom for 2008. Health care is a serious problem in this country and I happen to believe that government is going to have to address it. The problem is not that we overconsume or don't shop around, but that one cannot overconsume or shop around for a heart attack, stroke, or pregnancy complications/early birth (over $100,000 and still counting) and these are the things that account for the vast amount of the costs to the system. My personal opinion is that government should insure (in total) any event that costs $20,000+. This would then have the effect of making the rest of insurance much more affordable.