I have a question about the fair tax. How would it affect physicians and insurance payments? Would doctors be expected to take a 30% cut in revenue, assuming that Medicare and private insurance would keep reimbursement rates the same?
How would it affect physicians and insurance payments? Would doctors be expected to take a 30% cut in revenue, assuming that Medicare and private insurance would keep reimbursement rates the same?
The tax is collected from the purchaser of an insurance for a final consumer in the premium charged and remitted by the insurer.
When payments are rendered by insurers to a physician, for example, since the tax has already been paid by the insured, the physician receives a tax credit to the amount of tax that he would otherwise have to collect and remit with regard to payment from a client. The credit cancels out the requirement for what would otherwise be collected in the gross payment to the physician.
See Section 206 of the bill for details on how insurance credits are actually applied, it works the same for payments paid out under health, casualty & loss, fire, flood, liability, accident, disability, etc. insurance as well.