Cadillac plans...

[Larry Gude (Premo)]

washingtonpost.com

MONDAY'S White House meeting between President Obama and labor leaders focused on one of the most contentious -- and most sensible -- aspects of health reform: the proposed tax on employer-provided, high-value health insurance plans. The Senate version of the health-care bill would impose a 40 percent excise tax on insurance at or above $23,000 annually in 2013; the House contains no comparable measure. This so-called Cadillac tax would be paid by insurers but presumably its costs would be passed on to those who purchase such policies, both corporations and workers.

Amongst all the noise about socializing medicine or leaving the government sponsored state by state monopolies, no one much talks specifics. Well, can you even begin to imagine a health care plan that costs $23,000?

PER YEAR?

Government IS the problem and more government is NOT the solution. Anyone wanna guess what will happen to plans that cost $23,000 if there is going to be a 40% tax on them? The next day, plans will be trimmed to $22,900

Simply ban third party payer, your company of the government, get government out of the monopoly and provider business and let people spend their money as they see fit and, pretty soon, you will see very cheap, decent quality healthcare for day to day stuff and cheap plans to cover catastrophic risk.

$23,000 a year. For insurance.

[Larry Gude (Premo)]

Originally Posted by This_person

I feel the same way about $100,000 cars.

Damn. What company(s) gives their people $100,000 cars?

[Larry Gude (Premo)]

Originally Posted by This_person

The same companies that "give" $23,000 insurance policies: None that I know of. Insurance plans come as a part of a total compensation package, none are "given" to employees.

Then what is the point of this;

I feel the same way about $100,000 cars.

There are $23,000 health care plans. Taxes are not, currently, paid on them. To my knowledge, a company, no company, can give employees $100 or $100,000 cars a part of compensation or for the hell of it without it triggering income tax to the recipient.

[czygvtwkr]

Many union jobs have very expensive plans. My fathers insurance paid for glasses and dental care for the entire family, no deductible on anything including prescription medications.

I have a suspicion that a lot of union jobs are like this. Even the high options for government employees probably fall into this category, I have a coworker that has the most expensive plan the government has because his wife has had two kidney transplants so far.

[Tilted (Premo)]

Originally Posted by Larry Gude

washingtonpost.com - nation, world, technology and Washington area news and headlines



Amongst all the noise about socializing medicine or leaving the government sponsored state by state monopolies, no one much talks specifics. Well, can you even begin to imagine a health care plan that costs $23,000?

PER YEAR?

Government IS the problem and more government is NOT the solution. Anyone wanna guess what will happen to plans that cost $23,000 if there is going to be a 40% tax on them? The next day, plans will be trimmed to $22,900

Simply ban third party payer, your company of the government, get government out of the monopoly and provider business and let people spend their money as they see fit and, pretty soon, you will see very cheap, decent quality healthcare for day to day stuff and cheap plans to cover catastrophic risk.

$23,000 a year. For insurance.

That's the point - to reduce the use of this method of paying tax-free benefits. This is essentially a cap on the amount of the tax deduction for paying employees in the form of health care benefits instead of cash. Since I think that cap should be zero, I think a $23,000 cap is just fine. This is one of the few parts of the reform plans that might actually have the supposed desired effect - curbing health care costs generally.

Third party payer (and fourth party payer/third party payer extended) is a big part of the problem (to the extent that we have a problem), and we should stop encouraging it. If people want to buy complete health coverage - great, that's their prerogative. If they only want to buy insurance against catastrophe or large expenses, and otherwise pay out of pocket - great, that's their prerogative. But, even if they are buying insurance (or even complete coverage), we'd still be better off if they were paying for that coverage themselves - if they were making decisions about it and had more direct reason to be concerned with how, and how well, it worked. The government should stop encouraging employers to pay people part of their compensation in the form of health coverage. It should stop punishing the practice of paying in cash instead of in the form of health coverage.

As it is now, employer's have an incentive to pay you $60,000 in cash and another $20,000 in 'health care benefits' (instead of $80,000 or $90,000 in cash), because the portion paid in the latter form is tax free (or at least, enjoys significant tax benefits). It encourages the dynamic which is at the heart of the issues - health care shoppers become further disconnected from the health care payers, and the normal market forces which tend to improve quality and suppress cost are stifled.

[Larry Gude (Premo)]

Originally Posted by Tilted

That's the point - to reduce the use of this method of paying tax-free benefits.

It will. We will then have $22,999 plans. The mere suggestion that there are significant numbers of $23,000 and more plans that would generate significant tax revenues is, to me, mind numbing.

If insurers still have state by state monopolies, then this is a goal without a difference.

[Tilted (Premo)]

Originally Posted by This_person

I feel the same way about $100,000 cars. However, I don't think people should be punished with a tax intended to punish the person who buys a $100,000 car because someone else needs the money to buy a $20,000 car. My thought is, let the person who wants the product pay what the market will bear for the product.

Regardless of who the market is.

And without punishing people for being able to afford a $23,000 plan.

It isn't punishing people for buying high value plans - it is removing the tax benefit of paying people in the form of high value plans. It is saying, you can't get around income tax rules by paying your employees a huge portion of their compensation in the form of health care benefits. If we want to allow employers to pay people a certain portion of their compensation tax-free, then we should allow them to pay a certain portion tax-free, whether it is in the form of a car, cash, or health care. As it is, it's kinda like a tax-free shelter, or one of those tax loopholes some people like to complain about. As it is, some employers can pay their employees with high value health care plans and, in doing so, shift a portion of the tax burden to others.

Pay people the money and let them make their own decisions about whether or not to buy insurance, and how much to spend on it. As it is, we punish people for doing that.

[Larry Gude (Premo)]

Originally Posted by Tilted

It isn't punishing people for buying high value plans - it is removing the tax benefit of paying people in the form of high value plans. It is saying, you can't get around income tax rules by paying your employees a huge portion of their compensation in the form of health care benefits. If we want to allow employers to pay people a certain portion of their compensation tax-free, then we should allow them to pay a certain portion tax-free, whether it is in the form of a car, cash, or health care. As it is, it's kinda like a tax-free shelter, or one of those tax loopholes some people like to complain about. As it is, some employers can pay their employees with high value health care plans and, in doing so, shift a portion of the tax burden to others.

Pay people the money and let them make their own decisions about whether or not to buy insurance, and how much to spend on it. As it is, we punish people for doing that.

Oh, you were so close!!!

Pay people. PERIOD.

Then, let them PAY their state and federal and local taxes.

PROBLEM SOLVED

[Tilted (Premo)]

Originally Posted by Larry Gude

It will. We will then have $22,999 plans. The mere suggestion that there are significant numbers of $23,000 and more plans that would generate significant tax revenues is, to me, mind numbing.

If insurers still have state by state monopolies, then this is a goal without a difference.

Two more points of note that sometimes get glossed over:

(1) the tax is only on the plan value over $23,000 (for family plans - I believe the line is $8,500 for individual plans).

(2) the line is indexed for inflation +1%, so the line will move up at a rate greater than the CPI (though perhaps not greater than the rate at which health care costs increase).

[Tilted (Premo)]

Originally Posted by Larry Gude

Oh, you were so close!!!

Pay people. PERIOD.

Then, let them PAY their state and federal and local taxes.

PROBLEM SOLVED

I started that sentence with 'If we want to ...' - it wasn't meant to express the way I would have it be. It was to preemptively address the 'but then we have to pay more in taxes' complaint, without having to go through the 'but the tax base will be larger overall so we could reduce the rates' explanation.