Posted on 06/19/2019 9:59:23 AM PDT by bitt
Few have ever heard of “Health Reimbursement Accounts,” but they could fundamentally change the nation’s health care system — for the better — and destroy the Democrats’ case for socialized health care.
Late last week, the Trump administration finalized rules that will let companies put money into tax-exempt HRAs that their employees could then used to buy an individual insurance plan on their own. Seems like no big deal, right? Except it will start to unravel a 77-year-old policy mistake that is largely responsible for many of the problems the health care system suffers today.
Back in 1942, the Roosevelt administration imposed wage and price controls on the economy. But it exempted employer-provided benefits like health insurance, and the IRS later decreed that these benefits wouldn’t be taxed as income.
The result was to massively tilt the health insurance playing field toward employer-provided insurance. Today 88% of those with private insurance get it at work.
The massive tax subsidy — now valued at more than $300 billion — also encouraged overly generous health plans, because any health care paid by insurers was tax exempt, while out of pocket spending had to come from after-tax dollars.
So not only did this Roosevelt-era mistake create an employer-dominated health insurance market, it made consumers largely indifferent to the cost of care, since the vast bulk of it was picked up by a third party.
But while health care experts across the political spectrum recognize this mistake, Democrats’ response has been to get the government even more involved in health care, with the latest proposal a total government takeover under the guise of “Medicare for All.”
(Excerpt) Read more at issuesinsights.com ...
The menace is that if such an organization attempts in any way to exert influence over election of government officials or their policies when elected, the organization's contributions will no longer be non-taxable.
What I say is to decertify the whole scheme of exemptions for charitable contributions. Tax and be damned, and let the do-gooders be not hushed up. Let them say whatever they want from pulpits or charity boards to expose the subterfuges of candidates and the bruising and evil enactments they would inflict on the citizenry. Let their support be derived from willing contributors who see a clear voice crying for and getting decency and transparency.
Tax exemptions are the tool that government uses to stifle and silence public morality.
In theory yes because the employee is just going to the individual market to buy a policy that isn't linked to an employer.
One caveat is in order to keep the same plan you'll have to stay in the same state.
How would that be different from this approach?
"Under the plan, employers will be able to fund tax-free Health Reimbursement Accounts for their workers, who can then use the money to buy an individual insurance plan..."
“Socialism is Slavery”
I would like this to become an ubiquitous saying. Not only is it true, but it is almost self-evident. Look at Venezuela. To say that the fruits of my/your labor do not belong to the one who did the labor is ludicrous. But that is exactly what socialism does.
And that is the central lie of progressivism: the government can give you whatever you want. Because if someone else has it, then the government taking it away to re-distribute is obviously “the right thing to do”.
Socialism is Slavery
It isn't a perfect analogy but it's very much like the transition from defined benefit to defined contribution plans.
It's a way for the company to lay risk off onto the employee and the market while still claiming to offer the benefit.
I could see it becoming pretty widespread.
One major change in healthcare MUST be bringing the manufacture of our medications back into the USA where we know the FDA inspects them and we know what’s in them.
“...In truth, generic drugs are far from identical to their brand name counterparts. For one thing, brand name manufacturers do not hand over the recipe for making their medications. Generic drug companies have to reverse engineer products they want to copy. They often use different “excipients.” Those are the fillers, binders and coloring agents that hold the active pharmaceutical ingredient (API) together in the pills or capsules...”
‘I could see it becoming pretty widespread.’
Respectfully, I don’t. I see it as something self employed/small businesses will offer, to try to control costs, but won’t get much traction beyond that.
Potential employees aren’t stupid, Company A offers full traditional benefits, Company B offers some semi subsidized thing that adds more hassle and work for me.... Won’t be viewed the same by most potential employees... Its impact on moving the needle will be virtually non existent.
I am not against this option, as a program, but claims it will shift the market in any meaningful way, can only be made by people who don’t truly understand HC and Insurance at all.
“Four More Years. “
Repeal the 22nd Amendment.
In Brazil, they have two health care systems; a government-run one, and a private one.
When we were there, we were told not to use the government health care system. It’s free, yes, but, as my dad told me so many years ago about “free” stuff, “You get what you pay for.”
You may well be right but I can imagine the same dialog about 401(k) plans vs. company pensions back in the day.
I can see it being very attractive to employers but I think you're right, it will depend on labor market dynamics,
Shoot! I wish it was 8 more years LOL
It’s not something you get, it’s something you do...
Call a credit union or bank near where you live and ask them if they open HSA accounts...
Then look up the maximum you can contribute to it and then call insurance companies that sell high deductible health insurance policies
The problem now is it takes some effort to get into unlike getting insurance thru you employer which requires virtually no thinking or effort...
Could not be further from the truth.
If you do your homework, my policy covers anything an employer policy would do...
In all honestly it’s not that much more money but you have control over the insurance, especially if you lose your job for some reason...
what would really help is allowing organizations to offer policies, for example if the NRA were able to negotiate with insurance companies on behalf of all their members it would be fantastic....
Getting away from an employer based system would be huge
If we had a Thumbs Up button, I would have pushed it for your post.
Let’s say you have great insurance benefits at your job, suppose you lose your job, what happens to the insurance ??
Sure you can continue to pay the premium using something called COBRA, I’ve done this and it’s expensive.
Having your own insurance independent of your job would fantastic because it would allow you to move from job to job and continue your insurance or keep the insurance if you lose your job.
Health Reimbursement Accounts
Thanks bitt.
YES!!! When you think you're not paying, you don't care what it costs. Econ 101.
BFL
No, I think it's pretty fundamental. The more you can get third parties like insurers and goobermint (both for paying and regulating) out of the equation, the cleaner the results. People see and are actually interested in what stuff costs, which does good things for the costs, but also educates people. Plus, whatever money is left over end up in the hands of a real person, not some drone down at the goobermint or insurer. PLUS, different people have different wants, needs and priorities. Third party involvement almost "insures" too much one-size-fits-all-ness. This is a power shift and mind-shift from all the wrong people to all the right people, even if the impact on actual funding is finite.
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