Posted on 09/27/2008 11:26:10 AM PDT by Winged Hussar
It is vitally important that our readers circulate this information as widely as possible. Barack Obama, with his own words, conceded the health care reform issue to John McCain.
So you may end up getting a $5,000 tax credit. Here's the only problem: Your employer now has to pay taxes on the health care that you're getting from your employer. And if you end up losing your health care from your employer, you've got to go out on the open market and try to buy it.
It is not a good deal for the American people. But it's an example of this notion that the market can always solve everything and that the less regulation we have, the better off we're going to be.
...Obama's own statement shows his total lack of understanding of the issue--or perhaps he thinks his listeners are so ignorant that they don't understand it. To recap, "Here's the only problem: Your employer now has to pay taxes on the health care that you're getting from your employer. And if you end up losing your health care from your employer, you've got to go out on the open market and try to buy it." Here are the only, although numerous, problems with Obama's statement.
(Excerpt) Read more at grizzlygroundswell.com ...
So you may end up getting a $5,000 tax credit. Here's the only problem: Your employer now has to pay taxes on the health care that you're getting from your employer. And if you end up losing your health care from your employer, you've got to go out on the open market and try to buy it.
It is not a good deal for the American people. But it's an example of this notion that the market can always solve everything and that the less regulation we have, the better off we're going to be.
For McCain’s plan to work you would have to eliminate underwriting and go with an administrative only plan.
I think the McCain platform covers this problem.
It would lead to the transformation of how insurance is designed. Right now private insurance is mostly employer or employer group pools, but this would change dramatically under the McCain plan to large patient pools that would enable even lower premiums that what employers can get today. There would need to be some new regs, and several lifted regs to make it all work. But it would dramatically simplify the health care insurance system.
Yes and companys would hopefully be offering basic major medical like in the old days of a deduct and 80/20 insurance with a stop loss. No provider network and open access with no medical underwriting. The only problem is insuring the ones who want to get it AFTER they get sick. We could change bankruptcy laws? I hate to Mandate.
BOOMP
This is a typical classist Republican solution - a tax deduction. What about lower middle class folk who do not itemize? What about the risk spread advantage of group insurance? What about the requirement for at least 90% coverage of employee pool in group insurance to make sure enough healthy people are included to share the risk? What about cost containment measures and PPO agreements? This appears to unbundle many of the structural risk reduction/exposure minimization vehicles that keep premiums lower.
The premium on group insurance plans is based on a combination of actual “experience” (medical bills paid for the group) and actuarial tables on general population experience. The combination depends on a ratio that reflects how big the particular group is. For instance, a big corporation’s premium structure would stand on its own employee experience and a very small one of 100 employees would be based mostly on actuarial tables.
The result of these raw figures is then trended up for inflation (based on past inflation for medical/dental care prices.) Then a 10% margin is added. The 10% margin was refunded to the policyholder if not needed as a “dividend.” The insurance company made its profits on the life and Long Term disability insurance premiums, retirement annuities and any cash float between receipt of premium and payout in benefits. It was in the medical insurance business just to get at the other business. They made no money on it.
Republicans tend to think that the answer to the health care crisis is more private insurance. I do not think this will work and this is why.
The variable elements of a plan that determine cost and make it competitive are:
(1) the benefits provided/limited by the plan – plan variables such as covering only ten chiropractic visits a year; deductibles such as $100 or $50000; co-insurance from 50% -80%; plan maximums; high out of pocket maximums or limits on deductibles plus coinsurance; flexibility in design is further limited by legislative requirements, such as covering maternity the same as any other illness.
(2) risk exposure of the group being covered (folks with chronic conditions are more likely to utilize the plan and claim benefits – thus increasing exposure. Folks in the L.A. area will likely have greater expenses and providers charge more for their services than a rural area.); and
(3) cost containment through limiting access to care or capping costs of care through PPO agreements, HMO contracts, reducing malpractice exposure or other(?) such as loan forgiveness or other incentive for charging less or serving in an underserved area.
According to the market solution, private insurance companies should actually be able to come up with products now that are competitive and fill the need of the uninsured. So, why haven’t they?
Healthy folks without insurance are that way because they (1) choose to be uninsured and want to spend their money elsewhere; (2) cannot find a plan with the right benefits or premium costs they can afford. If the free market has been unable to meet their need now at an affordable cost, it is unlikely it will in the future without major cost containment measures to lower the raw costs. Medicare, Medi-Cal coverages control costs by price controls. PPOs are contracts where the provider agrees to a price in exchange for funneling business to them. HMOs are managed care for members. Out patient surgical practices or immediate care are a cheaper alternative than the hospital. This is where innovation has lowered costs although some are less free-market in spirit than others. It has to be some entirely different ingredient than is currently available.
Neither of the conditions explaining the healthy uninsured would be likely solved through a tax deduction. If you can’t afford the premium, you can’t claim the deduction. A subsidy may be needed at least to close the time gap between paying out premiums and getting relief for that on their taxes to pay the next year’s premium forward.
Unhealthy folks may currently be excluded from private (non-group) insurance by pre-existing condition limitations. They give the group a high exposure to risk of incurring expenses and utilizing the medical plan. If included in a group, they will drive the costs/premiums up for all, unless they are a small number in comparison to a large healthy group. The higher costs, in turn, reduce participation in the plan by the healthy people who can no longer afford the plan. The unhealthy folks may have to be covered with some sort of public subsidy or have restricted access to care under a plan.
In my experience, premature infants and heart surgeries were the killer claims topping several hundred thousands of dollars. Perhaps certain conditions could be carved out for public subsidy. Another possible approach might be to capitate the claims presentation risk exposure of the insurance company underwriting people with chronic health conditions by providing a public stop loss policy. In other words capitate the private companies payout exposure at a certain ceiling and have the public underwrite the rest. This would leave the whole private care and private insurance system institutions in place.
You get a tax credit without having to itemize. If you owe $x in taxes, but have $y in tax credits, you pay $x-$y in taxes.
It's not a deduction, it's a credit, which means if you spend 5,000 on health insurance the government sends you 5,000 no matter how little taxes you paid. While not a perfect solution as you pointed out, it is a far better system than having the government as the middleman. The single biggest problem for people without insurance is the cost of everyday medical care and the fear of a catastrophic illness that could wipe them out, or force them to select from two very bad choices. People like Obama don't like tax credits because they hate the idea of not being able to make people dependent on another government bureaucracy.
I hope some of Hillary’s supporter get this info.
I was a former group insurance underwriter for many years and in my earlier days paid health and dental claims as an adjuster. I also taught others. My proposed solution is sincere. I think a blend of private insurance and selective public stop loss is the solution to the private bankruptcies for uncovered expense and to the lack of stability in insurance premiums. This could be combined a large national pool product such as Blue Cross for the self insured or uninsured.
The stop loss could be, in part, a cost share premium levy derived by the experience of the national stop loss pool.
This way the solution is not in the medical service delivery system (Socialized care) but in the economic side.
It would be interesting to see how many bankruptcies are actually due to medical bills. I imagine it accounts for at least 25% - but that is just a feeling.
The problem is the solution to this won’t be based on practical and educated information coming from people such as yourself. it will be some huge government program that tries to solve it with a single one size fits all. I don’t think anyone likes the idea of people not able to get medical care. The issue is, fixing this without destroying our undeniably good medical care or creating a situation in which medical costs rise in proportion to the amount of money the government contributes to it. Correct me if I am wrong, but it seems to me the fundamental problem with health care insurance is that it places the cost burden on someone other than the customer, therefore the cost of the health care has no natural controls. If I could get insurance on my house that would cover maintenance I would paint it every year and not even ask the painters what they were going to charge me. All I would have to do is get the painter to state the painting is necessary for the maintenance of the home. This is the same thing I do with Health Insurance. Seems to me there has to be a way to introduce market forces into the equation.
Would they get the tax credit as things go along? Or after the fact when they pay their taxes? A lot of people can’t afford to go to the doctor period. Unless the credit can be tapped into along the way, I’m not sure how it helps them.
That’s one of the details that can be worked out when it is legislated. The only issue would be the first year when some people might need the money up front to pay for the coming year’s insurance. Every year thereafter they would get the 5K or whatever amount under 5K they used for health insurance during the previous taxable year. It also means, families can put a couple of thousand extra of their own money and spend more on better quality health insurance if they so choose.
That’s one of the details that can be worked out when it is legislated. The only issue would be the first year when some people might need the money up front to pay for the coming year’s insurance. Every year thereafter they would get the 5K or whatever amount under 5K they used for health insurance during the previous taxable year. It also means, families can put a couple of thousand extra of their own money and spend more on better quality health insurance if they so choose.
In short, Obama hates Americans getting a tax credit for health insurance when the tax credit is MORE than the amount of the tax. We take $10 from you over here, but we give you back $50 dollars over here, and you get that no matter what. And it’s $5000. not $50. For $5000 a family can buy catastropic health insurance. Catastrophic health coverage doesn’t have all the bells and whistles of the type of plan that covers every sniffle your kids might get, but it handles those huge bills that come with serious illnesses. That is far better than nothing. And it’s up to you who to buy it from, and it’s up to you which doctors you go to.
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