When it comes to making the tax system more progressive, truth be told, no one does more in one fell swoop in that regard than John McCain.
At least that was the point I made at a debate I participated in at Columbia University Medical Center on which health care proposal was better for America: McCain's or Obama's?
According to a report by the Lewin Group, the Obama plan -- which seeks to preserve employer based insurance -- does so by shoving about 52 million Americans into publicly funded health plans. It pays for that transition by cutting the reimbursement of doctors by at least 25 percent compared to what they get from private insurers, raising about $300 billion in taxes and cutting insurance premiums through price controls. I ignore the estimated savings from health IT and disease management because it's all based on articles published by people like me.
In essence, the Obama plan is preserving the tax exclusion for employer based insurance, which favors the rich. As the Center for Health Transformation's Jim Frogue noted several years ago: "Under the current tax code, workers whose employers contribute to their health coverage have that amount excluded from income and payroll taxes. Most employees are not aware of this (which is why Obama is able to portray the McCain health plan as a tax increase). Yet it amounts to a significant and, incidentally, highly regressive tax break--the higher one's tax bracket, the bigger the subsidy. According to the Lewin Group, a leading econometrics consulting firm, families earning $100,000 per year average $2,638 in tax subsides, but those under $15,000 get an average subsidy of only $79."
http://www.heritage.org/research/healthcare/EM740.cfm
26 million Americans will get private coverage under the McCain plan and 12 million of those will be able to shop for health insurance that is cheaper than the $12000 a year policy Obama and Biden believes is the "right" amount of coverage. And that coverage will be available with guaranteed issue conditions but shorn of expensive mandates that many people who are indifferent to risk but price sensitive do not want.
Under the McCain plan, as I noted, the amount employers contribute will be counted as wages and will be taxed at the marginal tax rate as Obama notes. But it will also, as the Lewin study notes, lead to an increase in wages and overall greater tax subsidies overall at every tax bracket with most of the tax subsidies going to Americans in the lowest income brackets. Of course, those in the higher brackets will be able to bank increased wages in tax free HSAs, IRAs ,etc. to offset tax liability.
And under the Obama plan Dan the Doctor will get paid less, pay more taxes and get sued more often and more successfully. Under McCain, doctors will be able to compete and serve patients directly outside of government controls.
I think there is considerable openness to other approaches to making health care convenient and affordable in both camps. At least I hope so. Because the effort to herd people into a glorified version of SCHIP or Medicaid -- or simply giving everyone an HSA -- will fail.
At least that was the point I made at a debate I participated in at Columbia University Medical Center on which health care proposal was better for America: McCain's or Obama's?
According to a report by the Lewin Group, the Obama plan -- which seeks to preserve employer based insurance -- does so by shoving about 52 million Americans into publicly funded health plans. It pays for that transition by cutting the reimbursement of doctors by at least 25 percent compared to what they get from private insurers, raising about $300 billion in taxes and cutting insurance premiums through price controls. I ignore the estimated savings from health IT and disease management because it's all based on articles published by people like me.
In essence, the Obama plan is preserving the tax exclusion for employer based insurance, which favors the rich. As the Center for Health Transformation's Jim Frogue noted several years ago: "Under the current tax code, workers whose employers contribute to their health coverage have that amount excluded from income and payroll taxes. Most employees are not aware of this (which is why Obama is able to portray the McCain health plan as a tax increase). Yet it amounts to a significant and, incidentally, highly regressive tax break--the higher one's tax bracket, the bigger the subsidy. According to the Lewin Group, a leading econometrics consulting firm, families earning $100,000 per year average $2,638 in tax subsides, but those under $15,000 get an average subsidy of only $79."
http://www.heritage.org/research/healthcare/EM740.cfm
26 million Americans will get private coverage under the McCain plan and 12 million of those will be able to shop for health insurance that is cheaper than the $12000 a year policy Obama and Biden believes is the "right" amount of coverage. And that coverage will be available with guaranteed issue conditions but shorn of expensive mandates that many people who are indifferent to risk but price sensitive do not want.
Under the McCain plan, as I noted, the amount employers contribute will be counted as wages and will be taxed at the marginal tax rate as Obama notes. But it will also, as the Lewin study notes, lead to an increase in wages and overall greater tax subsidies overall at every tax bracket with most of the tax subsidies going to Americans in the lowest income brackets. Of course, those in the higher brackets will be able to bank increased wages in tax free HSAs, IRAs ,etc. to offset tax liability.
And under the Obama plan Dan the Doctor will get paid less, pay more taxes and get sued more often and more successfully. Under McCain, doctors will be able to compete and serve patients directly outside of government controls.
I think there is considerable openness to other approaches to making health care convenient and affordable in both camps. At least I hope so. Because the effort to herd people into a glorified version of SCHIP or Medicaid -- or simply giving everyone an HSA -- will fail.
