Job-Based Health Care Threatened

[TampaYankee]

Job-Based Health Care Threatened

RICARDO ALONSO-ZALDIVAR | 11/28/10 01:21 PM | AP

WASHINGTON — Job-based health care benefits could wind up on the chopping block if President Barack Obama and congressional Republicans get serious about cutting the deficit.

Budget proposals from leaders in both parties have urged shrinking or eliminating tax breaks that help make employer health insurance the leading source of coverage in the nation and a middle-class mainstay.

The idea isn't to just raise revenue, economists say, but finally to turn Americans into frugal health care consumers by having them face the full costs of their medical decisions.

Such a re-engineering was rejected by Democrats only a few months ago, at the height of the health care overhaul debate. But Washington has changed, with Republicans back in power and widespread fears that the burden of government debt may drag down the economy.

"There is no short-term prospect of enactment," former Senate Majority Leader Tom Daschle, a leading Democratic adviser on health care. "However, in a tax reform (and) deficit reducing context in the long term, the prospects are much better," said Daschle. He opposes repealing the tax break by itself, but says he would be "willing to look" at it with other changes that improve access to quality health care while reducing costs.

Labor unions believed they had squelched any such talk. Now, they're preparing for another fight.

Tampering with health care tax breaks is "a terrible step in the wrong direction," said Mary Kay Henry, the new president of the Service Employees International Union, which represents many hospital workers. "We want the middle class stabilized, not destabilized."

Employer-provided health insurance is part of a worker's compensation. Unlike wages, it isn't subject to income and payroll taxes.

Repealing the tax break would raise several hundred billion dollars a year, depending on how it's done. Many economists believe employers would boost pay if they didn't provide health care. Proponents of repeal usually call for a tax credit to offset part of the cost of individually purchasing coverage.

The leaders of Obama's deficit commission – Democrat Erskine Bowles, a former Clinton White House chief of staff, and Alan Simpson, a former GOP senator from Wyoming – have proposed to limit the tax break or eliminate it along with other cherished deductions, such as the one for mortgage interest. That would allow for a big cut in tax rates.

The commission is supposed to report its plan on Wednesday. It's unclear if leaders have the votes to back their sweeping changes.

A separate group, the Bipartisan Policy Center, is proposing to cap the health care tax break in 2018 and eliminate it over the next 10 years. That's part of a deficit reduction strategy from Democrat Alice Rivlin, a former Federal Reserve vice chairman, and former Sen. Pete Domenici, R-N-M., who once led the Senate Budget Committee.

"The problem of rising debt is so serious that Republicans and Democrats are going to have go back and look at almost everything to see how we solve this," said Rivlin.

Simpson calls the health care tax break a "tax earmark." He said that "you cannot get anything done in this game unless you deal with every single aspect of the federal budget, and the biggest thing to wrap our arms around is health care."

Democrats struggled with proposals to curb the tax break during the health care debate, but strong opposition from organized labor won out. The compromise was a tax on high-cost health insurance plans, which won't go into effect until 2018.

In a twist, the health care law eventually may make it easier to pry people away from employer insurance, a system that dates to World War II and has sustained three generations.

Starting in 2014, new insurance markets will make it easier for people to buy coverage on their own. These state-based "exchanges" would work like the federal employee health plan. Taxpayer subsidies will help individuals and families with low to moderate incomes pay premiums.

"Before health reform, a declining role for employers would have raised concerns," Rivlin and Domenici said in their proposal. But well-run exchanges "will provide a viable – perhaps even superior – alternative."

One Democratic member of Obama's deficit commission is wrestling with the idea.

California Rep. Xavier Becerra says it's a very different situation from the health care debate. Back then, policymakers were looking for money to pay for covering the uninsured. Now, they're looking at rebalancing the role of government in the economy. He's not considering health care tax breaks in isolation.

"What we are saying is that we are going to examine every tax earmark," Becerra said. "They are all on the table. If you want to keep one, then show us how you are going to come up with the money. That's where you really have to put your money where your mouth is."

See original article at:http://www.huffingtonpost.com/2010/11/28/health-care-tax-break-deficit_n_788852.html

[TampaYankee]

What a novel idea.

[caeron]

I wish my healthcare wasn't tied to my employer.

[lookin]

Starting in 2014, new insurance markets will make it easier for people to buy coverage on their own. These state-based "exchanges" would work like the federal employee health plan. Taxpayer subsidies will help individuals and families with low to moderate incomes pay premiums.

"Before health reform, a declining role for employers would have raised concerns," Rivlin and Domenici said in their proposal. But well-run exchanges "will provide a viable – perhaps even superior – alternative."

See original article at: http://www.huffingto...t_n_788852.html

Call me crazy, but I think all paths lead to single-payer health care.

Even though some don't like abandoning the toll booths they've erected along the way, no reason they shouldn't do fine if they adapt their business models, as many have done before them.

I was disappointed that the Dems gave up on single-payer, but I think they left enough back roads in the legislation that we'll get there eventually. Who knows, it may be just over the next rise.

[Lucky]

[TampaYankee]

Call me crazy, but I think all paths lead to single-payer health care.

Hey there Crazy!

I think you are right. Sooner or later, but eventually. I see the potential for private insurance to play a role in supplemental care policies just as they do for Medicare, but eventually there will be a single payer basic policy if health care is to have broad access beyond the rich.

I know some don't want to hear that. Some didnt want to give up the horse and buggy. Some thought we didnt need phones. Times change as has medical technology. It is just too expensive for individuals to pay for and too expensive an overhead for business in today's competitive markets.

I was very comfortable with health care as practiced in my adolescence. Office visits were affordable. Insurance was affordable. Insurance companies didnt try to shirk their contractual obligations all the time or issue big increases on a yearly basis. The primary purpose was to see that doctors and hospitals could be compensated. Quarterly profits statements didnt exist. The goal was simple: serve the need for which they were created and stay in the black, year to year, in order to do it.

But then there were not a whole lot of expensive treatments like chemo or organ transplants and similar extraordinary treatments by the standards of those times' Drugs weren't priced in the hundreds of dollars and more for individual or monthly doses. Machines that cost tens and hundreds of thousands of dollars were not used for diagnosis and treatment. All of this is more or less commonplace today if you have access to the health system.

I saw the same GP who birthed me for my college phsysical. He was as old as Methusala by then. He was affordable. He didnt do any unnecessary tests to cover his ass. He just did the doctor thing. He died a few years later. Those times have died too.

There were not miracle machines. The miracle drugs were the polio vaccines. They were administered for a few dollars or given away free in school clinics to everyone.

Times were simpler. Technology was simpler. Most all the players were focused on delivering health care and medicine and paying for it, not on profit sheets.

To close the circle, modern medicine and health technology is just too expensive for individuals to pay for and too expensive an overhead for business in today's competitive markets.

[BiBottomBoy]

This is the next logical step toward the public option.

[RA1]

TY-

One thing you left out and that is, in those days, we didn't have enormous payouts for medical malpractice. If we have single payer "insurance", will the government provide malpractice insurance or legislate some "relief"?

Best regards,

RA1

[TampaYankee]

TY-

One thing you left out and that is, in those days, we didn't have enormous payouts for medical malpractice. If we have single payer "insurance", will the government provide malpractice insurance or legislate some "relief"?

Best regards,

RA1

You are right about that. Yes, I would think that part of the system would be a revision of malpratice recourse. It would have to be, because part of providing access to all while controlling costs would be protecting competent doctors from nuisance law suits and establishing a fair compensation program for legitimate claims that takes the profit motive out of the equation for both sides unlike the present system.

I would like to think that malpractice would drop and lawsuits would be replaced by mediation and arbitration boards. Part of the reason is that doctors and hospitals with questionable track records would be dropped from participation in a universal plan which would pretty much be the kiss of death. Removing attorneys from the mix would remove the profit motive from the mechanics of the process. Because there would be no insurance company on the doctor/hospital side there would be no profit motive there either.

It would make no sense to keep the present malpractice system in a universal system.

[TotallyOz]

I basically believe the medical insurance industry should be nonprofit, not profit-making. There is no way a health reform plan will work when it is implemented by an industry that seeks to return money to shareholders instead of using that money to provide health care.

Diane Feinstein

[BiBottomBoy]

Oz is a wise man.