A rare public post. It must be election season.
Let's talk for a moment about John McCain's health care plan. Though first, can someone tell me what he's actually saying in the sentence below, because I rewound about 3 times last night and couldn't figure it out, and I'm still not sure. I couldn't even intelligently attack the claim, because I had no idea what he was actually claiming.
"And if you do the math, those people who have employer-based health benefits, if you put the tax on it and you have what's left over and you add $5,000 that you're going to get as a refundable tax credit, do the math, 95 percent of the American people will have increased funds to go out and buy the insurance of their choice and to shop around and to get -- all of those people will be covered except for those who have these gold-plated Cadillac kinds of policies."
But anyway. I have a really good health care plan, of which my company pays an astounding 90%. So I just did the math, and between my company and I, we pay $5,040 per year.
1) If the government is going to give me $5,000 for health care, why on earth would my employer continue to provide this benefit? So how is taxing that benefit going to even generate any tax revenue? And I somehow doubt that most employers (mine might, but most won't) pay me that extra $4,500 instead. So really the most that's happening is that they're getting the income tax off the $500 I'm not paying for my portion of the health care plan. Admittedly, that's probably more that $500 for most people, but still. In this scenario, my total "increased funds" for the year is $325. And this doesn't even get into the co-pays and out-of-network costs I currently pay.
1a) For argument's sake, let's do the comparison math from last old job, where I had a worse plan (from the same health care provider as my current plan, btw), and my employer paid 65% of it (I think, though now that I've done the math, that means my old crappy plan was more expensive than my current plan. how does that work? Maybe it was 55% that they paid?). In that scenario I get save $1,976 when the company decides to stop providing health insurance, about $1280 after taxes. Which I guess is more significant, but still. And if my math was correct, and that plan really did cost $5,650. Then I'd have to make up the difference, and my net gain would only $630.
2) In a scenario where everyone in the country gets $5,000 for health insurance (which gets sent directly to the health insurance company, not you, btw), you really think there's going to be an insurance company out there that that charges less than $5k for the cheapest plan? So basically, it's going to mean that for the cost of my tax credit, I can have the crappiest plan available, and if I actually want anything with decent benefits, then I'll have to pay more. Presumably out of pocket, since my employer will have stopped providing what I was getting before. Using income that I'm now being taxed on. (unless he decides to keep pre-tax FSAs and things like that, but I doubt it.) Or *maybe* cool employers like mine will start giving the extra insurance costs over the $5k as benefit. In which case, the only ones who win in this scenario is my employer who doesn't have to pay quite as much, and the insurance companies that now get to charge even more for the same service.
3) This plan doesn't in any way address the problem of people with pre-existing conditions who are being denied health insurance, even though they can pay for it.
4) Wait a minute, if he's taxing health care benefits, *does* that mean he's also taxing income used to pay for health care, outside of the $5k he's giving me? Because I actually spend another $1800 per year on my deductible, out-of-network "co-insurance" to see the shrink of my choosing, and prescription drugs. (And it would be more if I didn't have the aforementioned great plan that caps my spending at $1k + deductible.) At the moment, I pay that all pre-tax because of the FSA my company provides. So if he's doing away with that too, then my net insurance cost would actually be about $630 higher. So my $325 in "increased funds" just turned into $300 in increased spending. And that's assuming #2 doesn't happen.
5) He keeps talking about how Obama's plan will put government in charge of your health care decisions instead of you. As if the current situation isn't entirely run on corporate bureaucracy instead of government bureaucracy. And I know that when you're on NHS in other countries, there's often long waiting lists to get the procedures you need. But at least you can get them. We may not have waiting lists, but instead we have insurance companies that just decide that your surgery is unnecessary and you can't have it all. McCain's plan will do nothing to change any of that. I mean, Obama's might not either, but it's ridiculous to assert that the average American is currently in charge of making their own health care decisions, or that being able to switch to a different insurance company will give them that ability.
How EARTH does any of this make ANY sense? How does anyone look at this plan and think it's a viable solution to the health care situation? How? I'm not saying that Barack Obama's plan is the best idea in the world, but at least *I* won't end up spending any more money on health insurance, and a lot of people who currently can't get insured would be able to.
I know I'm preaching to the choir here, but this sort of lack of thinking all the way through a problem really pisses me off. Especially when it's not even all that hard to think all the way through the problem. I mean, I'm just sitting here ranting into my journal for a little while, about a problem that isn't even my primary concern for the campaign, and about an industry that I've never even worked in or studied. And yet I was able to rattle off 5 obvious flaws in the plan. That's completely pathetic.
ETA: I just realised my math is totally off for my actual situation, since my effective tax rate is pretty low, thanks to the mortgage interest I pay. But my point is still valid.
"And if you do the math, those people who have employer-based health benefits, if you put the tax on it and you have what's left over and you add $5,000 that you're going to get as a refundable tax credit, do the math, 95 percent of the American people will have increased funds to go out and buy the insurance of their choice and to shop around and to get -- all of those people will be covered except for those who have these gold-plated Cadillac kinds of policies."
But anyway. I have a really good health care plan, of which my company pays an astounding 90%. So I just did the math, and between my company and I, we pay $5,040 per year.
1) If the government is going to give me $5,000 for health care, why on earth would my employer continue to provide this benefit? So how is taxing that benefit going to even generate any tax revenue? And I somehow doubt that most employers (mine might, but most won't) pay me that extra $4,500 instead. So really the most that's happening is that they're getting the income tax off the $500 I'm not paying for my portion of the health care plan. Admittedly, that's probably more that $500 for most people, but still. In this scenario, my total "increased funds" for the year is $325. And this doesn't even get into the co-pays and out-of-network costs I currently pay.
1a) For argument's sake, let's do the comparison math from last old job, where I had a worse plan (from the same health care provider as my current plan, btw), and my employer paid 65% of it (I think, though now that I've done the math, that means my old crappy plan was more expensive than my current plan. how does that work? Maybe it was 55% that they paid?). In that scenario I get save $1,976 when the company decides to stop providing health insurance, about $1280 after taxes. Which I guess is more significant, but still. And if my math was correct, and that plan really did cost $5,650. Then I'd have to make up the difference, and my net gain would only $630.
2) In a scenario where everyone in the country gets $5,000 for health insurance (which gets sent directly to the health insurance company, not you, btw), you really think there's going to be an insurance company out there that that charges less than $5k for the cheapest plan? So basically, it's going to mean that for the cost of my tax credit, I can have the crappiest plan available, and if I actually want anything with decent benefits, then I'll have to pay more. Presumably out of pocket, since my employer will have stopped providing what I was getting before. Using income that I'm now being taxed on. (unless he decides to keep pre-tax FSAs and things like that, but I doubt it.) Or *maybe* cool employers like mine will start giving the extra insurance costs over the $5k as benefit. In which case, the only ones who win in this scenario is my employer who doesn't have to pay quite as much, and the insurance companies that now get to charge even more for the same service.
3) This plan doesn't in any way address the problem of people with pre-existing conditions who are being denied health insurance, even though they can pay for it.
4) Wait a minute, if he's taxing health care benefits, *does* that mean he's also taxing income used to pay for health care, outside of the $5k he's giving me? Because I actually spend another $1800 per year on my deductible, out-of-network "co-insurance" to see the shrink of my choosing, and prescription drugs. (And it would be more if I didn't have the aforementioned great plan that caps my spending at $1k + deductible.) At the moment, I pay that all pre-tax because of the FSA my company provides. So if he's doing away with that too, then my net insurance cost would actually be about $630 higher. So my $325 in "increased funds" just turned into $300 in increased spending. And that's assuming #2 doesn't happen.
5) He keeps talking about how Obama's plan will put government in charge of your health care decisions instead of you. As if the current situation isn't entirely run on corporate bureaucracy instead of government bureaucracy. And I know that when you're on NHS in other countries, there's often long waiting lists to get the procedures you need. But at least you can get them. We may not have waiting lists, but instead we have insurance companies that just decide that your surgery is unnecessary and you can't have it all. McCain's plan will do nothing to change any of that. I mean, Obama's might not either, but it's ridiculous to assert that the average American is currently in charge of making their own health care decisions, or that being able to switch to a different insurance company will give them that ability.
How EARTH does any of this make ANY sense? How does anyone look at this plan and think it's a viable solution to the health care situation? How? I'm not saying that Barack Obama's plan is the best idea in the world, but at least *I* won't end up spending any more money on health insurance, and a lot of people who currently can't get insured would be able to.
I know I'm preaching to the choir here, but this sort of lack of thinking all the way through a problem really pisses me off. Especially when it's not even all that hard to think all the way through the problem. I mean, I'm just sitting here ranting into my journal for a little while, about a problem that isn't even my primary concern for the campaign, and about an industry that I've never even worked in or studied. And yet I was able to rattle off 5 obvious flaws in the plan. That's completely pathetic.
ETA: I just realised my math is totally off for my actual situation, since my effective tax rate is pretty low, thanks to the mortgage interest I pay. But my point is still valid.