President Bush gets something right.... (Taxes/tax breaks shift health costs) [ed.]

Great Debates
41

[QUOTE=Diogenes the Cynic]
I have to disagree with this – at least that they can buy anything any good.
[/QUOTE]

The real issue is how much more could they afford to buy with a tax break. I’d expect not very much more. So, if one thinks lack of insurance for the working poor is a problem, this proposal won’t fix it.

Worse, if the Republicans actually think the root cause of the health care crisis is too much health care, with people getting cancer treatments just for the fun of it, makiing insurance affordable would just make this “problem” worse. So it is not even consistent with their message.

42

[QUOTE=Steve MB]
The problematic part is the proposed immediate tax increase if you have health benefits worth more than $7500/$15000 (including the part that is nominally paid by your employer) and the future tax increase when inflation brings normal middle-class benefits above those levels.
[/QUOTE]

So the 40 million or so people without insurance are supposed to take that tax savings and buy health insurance?

43

[QUOTE=Diogenes the Cynic]
I have to disagree with this – at least that they can buy anything any good.
[/QUOTE]

Well, now you guys are just quibbling about dollar amounts. Dio, the report that Renob linked shows that 33% of the people in Md. who do not have health insurance make more that $44K per year. Is that enough so that you can say “Oh, they should be able to pay for it”, or is the number higher? 23% make more than $59k, is that the threshold number? Hell, 11% make more than $88K, how about them?

44

[QUOTE=Voyager]

Worse, if the Republicans actually think the root cause of the health care crisis is too much health care, with people getting cancer treatments just for the fun of it, makiing insurance affordable would just make this “problem” worse. So it is not even consistent with their message.
[/QUOTE]

On the face of it what you are saying seems logical, but look at the costs of elective health care-things like LASIK, cosmetic surgery, etc..These procedures tend to be very expensive when they are introduced, but over time they drop in price dramatically as the market does it’s job. People have to pay for them out of pocket since insurance doesn’t cover them, and the competition between providers lowers the price. This doesn’t happen when the bill is being handled by a 3rd party, and the cost of services goes up, up, up. We’re not talking about cancer treatments, we’re talking about non-critical medical services and excessive treatments. If 2 tests for a medical complaint indicate that you don’t have an ailment, would you go for 7 more? If you’re not paying for it, why wouldn’t you? However, if having those extra tests would cost you money, you probably wouldn’t have them done. They should be reserved for people for whom the first two tests were inconclusive or for cases where they indicated that there was a problem. At which point they should be covered by insurance, of course.

45

[QUOTE=Weirddave]
On the face of it what you are saying seems logical, but look at the costs of elective health care-things like LASIK, cosmetic surgery, etc..These procedures tend to be very expensive when they are introduced, but over time they drop in price dramatically as the market does it’s job. People have to pay for them out of pocket since insurance doesn’t cover them, and the competition between providers lowers the price. This doesn’t happen when the bill is being handled by a 3rd party, and the cost of services goes up, up, up. We’re not talking about cancer treatments, we’re talking about non-critical medical services and excessive treatments. If 2 tests for a medical complaint indicate that you don’t have an ailment, would you go for 7 more? If you’re not paying for it, why wouldn’t you? However, if having those extra tests would cost you money, you probably wouldn’t have them done. They should be reserved for people for whom the first two tests were inconclusive or for cases where they indicated that there was a problem. At which point they should be covered by insurance, of course.
[/QUOTE]

And yet, while paying for things up front might be a nice deterrent for taking multiple tests, its also a great deterrent for getting routine preventative medical treatment. Not only that but none of what you’re talking about is part of this ‘gets something right’ tax break plan.

46

[QUOTE=Hentor the Barbarian]
This plan is pretty much a nonsensical non-starter. I think a much better starting point for a program to address health care costs on a national level would be the Republican plan in California or the Republican plan in Massachusetts.
[/quote]

Those plans won’t do anything to help the uninsured. A mandate of the sort they propose is unenforceable. All these plans will do is further government regulation of health insurance, which will drive up the price.

Yes, I’m sure businesses will love the increased taxes that would result from this.

47

[QUOTE=spazattak]
And yet, while paying for things up front might be a nice deterrent for taking multiple tests, its also a great deterrent for getting routine preventative medical treatment. Not only that but none of what you’re talking about is part of this ‘gets something right’ tax break plan.
[/QUOTE]

Oh, I think it is. Remember, the tax proposed is only going to be on those “Cadillac” plans that pay for things like unlimited testing and cost over 15K. If that gives gives someone incentive to switch to a plan that costs less than 15K but limits tests to those that are medically necessary, then that’s a good thing, and it should have some effect on costs. Likely not a huge effect, but every little bit helps, no?

48

My employer pays about $14,000 for health insurance for me. If I did not have insurance, I would not be able to afford to buy it with or without a tax break, and I’m not by any means in poverty. If this cost is typical, how many of you have about $1200 per month free in your personal budgets to buy your own health insurance?

This is typical Republican thinking- give someone a tax break and that solves everything.

49

BobLibDem, you are assuming that the only insurance you can buy costs $14,000. There is probably cheaper insurance available if you bought on your own (of course, you’d be losing the tax break your company gets by buying it for you).

For example, our insurance costs us and my wife’s employer around $10,000. We looked into getting an HSA and catastrophic insurance. That insurance would have cost us around $2000 a year. Her employer and we would be better off if they gave us $8000 and having us buy our own insurance and stick the rest in a HSA.

50

[QUOTE=Weirddave]
Oh, I think it is. Remember, the tax proposed is only going to be on those “Cadillac” plans that pay for things like unlimited testing and cost over 15K. If that gives gives someone incentive to switch to a plan that costs less than 15K but limits tests to those that are medically necessary, then that’s a good thing, and it should have some effect on costs. Likely not a huge effect, but every little bit helps, no?
[/QUOTE]

How will that affect costs at all? If someone wants the ‘cadillac’ plan, and is already willingly paying the extra (most companies cover xx% not $xxxx) and will only be taxed on whats over $15k do you really think that’ll act as deterrent. And even if it does, how does that affect costs on the low-end. Those people are already paying for their tests with the increased premiums. With insurance plans, the high end generally subsidizes the low-end, not the other way around.

51

[QUOTE=Weirddave]
On the face of it what you are saying seems logical, but look at the costs of elective health care-things like LASIK, cosmetic surgery, etc..These procedures tend to be very expensive when they are introduced, but over time they drop in price dramatically as the market does it’s job. People have to pay for them out of pocket since insurance doesn’t cover them, and the competition between providers lowers the price. This doesn’t happen when the bill is being handled by a 3rd party, and the cost of services goes up, up, up. We’re not talking about cancer treatments, we’re talking about non-critical medical services and excessive treatments. If 2 tests for a medical complaint indicate that you don’t have an ailment, would you go for 7 more? If you’re not paying for it, why wouldn’t you? However, if having those extra tests would cost you money, you probably wouldn’t have them done. They should be reserved for people for whom the first two tests were inconclusive or for cases where they indicated that there was a problem. At which point they should be covered by insurance, of course.
[/QUOTE]

I think there are other reasons for the decrease in costs, which apply to treatments covered by insurance also. 45 years ago my father had a heart attack, and was in the hospital for six weeks. Last year, at almost 90, he had another heart attack, and was in the hospital two days. He got a stent put in, a difficult one, but it was done without opening him up.

I don’t know what percent of the cost of Lazik surgery depends on the cost of the machines, but I suspect that has come down a lot in the past few years. I think that would have happened even if Lazik surgery was covered. Look at eyeglasses. My very good eye plan only covers a percentage of the cost of new glasses. Despite glasses now being a mass market item, the cost had not come down a lot in real terms in probably 40 years. Glasses are made about as cheaply as they can be - now there is the fashion angle.

As for tests - all mine are ordered by the doctor. I can’t walk into the lab of my medical center and ask for a test because I feel like it. More tests available means more tests ordered - but a test can save tons of money by catching a problem quickly. At my age every few years the doctor has to drive a camera through my colon. I suspect the number of people wanting this test for the fun of it is rather minimal. :eek: Yet catching colon cancer early can save lots of money, not to mention lots of lives. I’m sure it was cheaper in the old days before they could do this test, but is that really better?

And I’m sure some tests will turn out not to be efficacious, and really be a waste of money - but medicine, like anything else, isn’t perfect. Except for the small percentage of people who treat going to the doctor as a hobby, I don’t buy that there are tons of people out there in waiting rooms, getting stuck, for the fun of it - at least not on the insurance companies dime.

52

[QUOTE=Renob]
BobLibDem, you are assuming that the only insurance you can buy costs $14,000. There is probably cheaper insurance available if you bought on your own (of course, you’d be losing the tax break your company gets by buying it for you).

For example, our insurance costs us and my wife’s employer around $10,000. We looked into getting an HSA and catastrophic insurance. That insurance would have cost us around $2000 a year. Her employer and we would be better off if they gave us $8000 and having us buy our own insurance and stick the rest in a HSA.
[/QUOTE]

I have an HSA (great thing!) but I believe there are limits as to what can be put into it. I put in over $2K, and use it up, even with good insurance. Insurance didn’t pay much for braces for my daughter’s screwed up teeth, btw. I’m sure individual people can beat insurance - but that is what insurance is all about, isn’t it, building a large risk pool. You might be able to get by on this, but what about the 55 year old in your company? How about the person who had an expensive illness - would he be able to get the insurance you can get?

You are also assuming that you, as an individual, can out negotiate a large company. Unlikely. What is really happening is that you are defeating the purpose of insurance by taking yourself out of the pool. One of the issues with these “market driven” proposals is that those with actual health problems are either not going to be able to get insurance or will get very expensive insurance. This kind of thing is fine for auto insurance, since you have control over what kind of driver you are, but not for health insurance.

53

[QUOTE=Renob]

Yes, I’m sure businesses will love the increased taxes that would result from this.
[/QUOTE]

I bet the companies who are paying for decent insurance coverage will. I bet those who say tough luck to the general workers won’t. We’ve had enough threads in which evidence has been presented on how much more expensive and inefficient our system is as compared to “socialist” systems , and on the level of beauracracy in dealing with a zillion insurance companies with varying rules. So, while taxes might go up, it is not at all obvious that the total cost of healthcare will.

54

[QUOTE=Voyager]
You are also assuming that you, as an individual, can out negotiate a large company. Unlikely.
[/quote]

No, I got a quote from an insurance company that would have saved us a lot of money. I’m not assuming anything.

I’d still be in the catastrophic insurance pool.

Perhaps, although there is some evidence that both older people and people with health problems can benefit from HSAs. However, let’s say you are correct. That’s fine. Let’s expand market-based health insurance and then, if necessary, craft progams to deal with this small subset of the population that may have trouble getting insurance (the disabled, etc.).

Some health problems you have no control over, true, but many you do. If you smoke, you are likely to get lung cancer. If you eat a lot, you are likely to be unhealthy. People who choose to impose these costs on our health system should be forced to bear the burden they currently impose on all of us, just as bad drivers currently pay much, much higher insurance premiums than good drivers.

55

[QUOTE=Renob]
Those plans won’t do anything to help the uninsured. A mandate of the sort they propose is unenforceable.
[/quote]
Wow! Then the Governors of those states are complete liars, because they describe the plans as providing near universal health care.

Nonsense. Isn’t the cost of healthcare skyrocketing under our current system? Isn’t that why there is a crisis, forcing Republican governors (and others) to consider (cue scary '50’s sci-fi music) “socialist” health care programs? Let the markets work for us any better, and we’ll all be out on the street. In fact, some of the most efficient programs for covering health care costs are … those run by the government.

My sense, and hope, is that the days when the simplistic volley of loaded conservative buzzwords no longer have any effect are approaching rapidly. People are all for buying into the idea that “socialized”=bad and tax cuts=good when they aren’t seeing that they’re already bleeding money out the rectum. “Government will take away my health care choices? What choices do I have right now?”

56

[QUOTE=Hentor the Barbarian]
Wow! Then the Governors of those states are complete liars, because they describe the plans as providing near universal health care.
[/quote]

Maybe not liars, but there is no way there plans will live up to their hype.

You mean our heavily regulated system where government has been distorting the marketplace since WWII?

There really isn’t a “crisis” of uninsured. There is a small percentage of people who cannot afford insurance. The media has played up this issue and politicians, as is their usual habit, feel the need to “do something.”

The market is completely hobbled from working in health care today.

Yeah, Medicaid provides such a great service. :rolleyes:

57

[QUOTE=Weirddave]
Remember, the tax proposed is only going to be on those “Cadillac” plans
[/QUOTE]

I have a mental image of your great-grandfather back in the day assuring the voters that this new “income tax” would only be on those “robber barons”…

58

[QUOTE=Renob]
No, I got a quote from an insurance company that would have saved us a lot of money. I’m not assuming anything.
I’d still be in the catastrophic insurance pool.

[/quote]

A very different pool.

Okay, low risk people pay for themselves, and high risk people get paid for by the government. That would actually work - though the cost to the taxpayer would be much higher than if everyone were in the risk pool.

This I have no problem with. People engaging in low risk behavior should get a break on premiums. And I think we do for the most part - I’m pretty sure I attest to the fact that I don’t smoke somewhere during registration.

59

[QUOTE=Weirddave]
However it’s the other part of the plan that’s going to raise a lot of people’s ire. Taxing their benefits? Oh, they’ll be out in force against that! The thing is, it’s not going to apply to most people. I’ve seen the numbers (I do not have a link to them, this was in an industry publication), and less that 5% of those covered by employer’s health plans have plans that cost more than 15K/family and 7.5K individual. Even then the tax is only on the difference between 15K and the actual cost.
[/QUOTE]
That doesn’t match my understanding of it at all, but if you read it in an industry publication, it must be right (or not). As far as I know, the plan completely removes the pre-tax aspect of our health care costs. By completely, I mean from dollar zero on up, not starting at 15k. So, we pay taxes on all monies that are put towards health insurance. We then get a tax break on the cost. So, it sounds to me like they increase your taxes based on the amount it costs to insure you, then decrease your taxes based on the amount that it costs to insure you. WTF? If they want me to move money from my left pocket to my right pocket, they could just ask. I think it’s most telling when you hear:
[QUOTE=White House officials]
White House officials say the health tax plan would neither increase spending nor reduce tax revenues.
[/QUOTE]
Sure sounds like my understanding of it is accurate.

About that industry publication…

60

DMC,

First of all, the only industry publication I was referencing was an article I was reading on how much businesses pay for benefits. That’s where I got “less than 5% of policies cost more than $15K”. That’s all I was referring to with that comment.
As for the rest…What you are saying doesn’t agree with the information in the link I posted, or anywhere else for that matter. It’s not what the NYTimes article you linked says. Where are you getting your information? Do you have a source? And the quote provided just states that the new plan will be revenue neutral-that the increased taxes on benefits with a premium cost in excess of 15K will offset the tax breaks on the other end. I’m not sure I buy that, but that (IMO) is all that was being said.