Bush's Health Plan--merged threads

[FIRE'd@51]

Just to make things clear. The plan proposed by President Bush (whether you like it or not) is not a tax cut. It is, supposedly, revenue neutral. Taxes on those who are receiving employer-based plans (whether working or retired) whose cost exceeds $7500 (for single) or $15,000 (for families), i.e, the so-called "Cadillac" plans, will increase. Their increased taxes will pay for the tax cut received by those who either have employer-based plans which cost less than $7500/$15,000 or purchase such a plan in the individual insurance market. What this proposal does is make the purchase of insurance more equitable from a tax point-of-view, and I applaud that.

What the plan does not do, as has been pointed out by Martha and others, is address the insurance access problem in a direct way. Those with pre-existing conditions, etc. will still face the same obstacles to buying affordable insurance in the individual insurance market as they face now, unless they live in a state which addresses this problem in meaningful way.

At the margin, a few healthy people (mostly young) with good incomes who currently do not have health insurance may be induced to purchase it with the tax benefit. That is a good thing. However, this proposal is far from a solution to the healthcare problems in the US. Nevertheless, it is good to have this proposal on the table in that it should increase the dialogue on this issue.

 

[mykidslovedogs]

Just to make things clear. The plan proposed by President Bush (whether you like it or not) is not a tax cut. It is, supposedly, revenue neutral. Taxes on those who are receiving employer-based plans (whether working or retired) whose cost exceeds $7500 (for single) or $15,000 (for families), i.e, the so-called "Cadillac" plans, will increase. Their increased taxes will pay for the tax cut received by those who either have employer-based plans which cost less than $7500/$15,000 or purchase such a plan in the individual insurance market. What this proposal does is make the purchase of insurance more equitable from a tax point-of-view, and I applaud that.

I sell health insurance in Colorado. Very few plans, even in the group realm, cost more than $15000 for a family. Even a $500 deductible copay plan with a prescription drug card and unlimited office visits at the copay level costs less than that on average. One thing to think about is if a lot of people choose higher deductible plans because of the incentive of the tax deduction, (say a 2000 deductilbe HSA that costs 1/3 to 1/2 the price of the "cadillac" plan), employers will have less to expense from their revenues, so they will either hire more people, invest in capital, or they will pay taxes against their higher revenues. No matter how you look at it, it amounts to tax revenue for the government. Not sure if it will be enough to offset the deductions, but it certainly can't hurt.

To offer a competitive edge for attracting prospective employees, businesses that are able to save a lot in premiums as a result of this legislation might even be willing further encourage enrollment into HSAs by offering to fund a large portion of the HSA plan deductible into an HSA savings account for their employees. A 2000 deductible HSA plan with fully funded HSA account is an even better plan than a 500 deductible copay plan......Just a few items to think about.

What the plan does not do, as has been pointed out by Martha and others, is address the insurance access problem in a direct way. Those with pre-existing conditions, etc. will still face the same obstacles to buying affordable insurance in the individual insurance market as they face now, unless they live in a state which addresses this problem in meaningful way.

Another thing to think about: Don't forget that those with pre-existing conditions are also going to be able to take the same tax deduction based on this proposal which should greatly help out with the affordability of the higher premiums in the "guaranteed" health insurance market. There is already legislation out there proposing tax credits for the poor to help out in that realm. Take a look at these:

http://www.nahu.org/legislative/HRPs/index.cfm
and
http://www.nahu.org/legislative/uninsured/credits.cfm

 

[mh]

I think the general idea for this bill is to start de-linking our health insurance and our employment. They want to limit the tax exempt status of employer-provided healthcare, while at the same time creating a very large personal tax deduction for personal healthcare insurance.

Which seems fairer to me than the current situation even though many reader's
here may not like it (which i can understand). Personally , i think it's awesome
because when i FIRE i'm on my own health plan wise.

This is going to be the case more and more people in the future i suspect.

 

[Tadpole]

Another thing to think about: Don't forget that those with pre-existing conditions are also going to be able to take the same tax deduction based on this proposal which should greatly help out with the affordability of the higher premiums in the "guaranteed" health insurance market. There is already legislation out there proposing tax credits for the poor to help out in that realm.

I don't need to take too long to think about this. I am one of these people and I will lose my tax break in a high cost plan. Deserved? NOT. I am in this plan because someone else made bad choices and crippled me while doing so. So I am one of those who carries good insurance to cover the damage and keep me working. Through no fault of my own, I cannot purchase LTC since the insurance companies won't even consider my case. I don't think that I deserve to have my taxes increased because of a situation that is not a "CHOICE". By the way, the term "cadillac", is bull. People like me simply face an insurance world that charges us a lot of money for the same insurance another person gets at lower price or refuses to insure at all. I am lucky; I have the money. But this will reduce my savings rate for retirement. I have seen many people who think the myth justifies the reality. Since the older workforce doesn't have time to build up a fortune to cover their costs in a HSA, they should get first priority for a tax break on their insurance costs. The HSAs will drive up the costs for them as the pools get left with older/sicker people and they are stuck in the traditional plans.

 

[ladelfina]

The "Cadillac" moniker is mis-applied (willfully) since I doubt most higher-cost plans are for "the rich" or cover every hangnail and Botox treatment. A high-cost plan is likely to be for people OLDER and SICKER than normal. So tax them more.. woo hoo! Also, since the cut-offs are only to be indexed to inflation (not Health Care Inflation) those Cadillacs will turn into Pintos before long, anyway!!

That's problem one. Problem 2 that I came across and that hasn't been brought up yet here, I don't think, is that on the deduction side it would bring about a reduction in payroll taxes (i.e. SS). So, for a tax break now, you could end up halving your SS income in the future. Just what the middle-class worker needs.

Very crafty, this: Gut employer-based health care (which is fine by me as long as it is replaced with something comprehensively better, not just throwing everyone to the vagaries of the marketplace) AND disembowel Social Security! Two birds with one stone!

HSAs are not the answer since only a minority of people with coverage issues can establish them, plus they take a while to build up to the point of anything even resembling a decent cushion.

With this proposal, (which on its face, seems "fair") we are back to square one, if not worse! The insurance companies win, since they'll be writing less group insurance. The rich aren't affected. The poor are in the same boat as before. A portion of the middle class gets to pay extra taxes, which are passed on in the form of some deductions possibly of worth to the lower-middle class, and all at the expense of Social Security!

Do we actually PAY people to come up with these schemes?

 

[farmerEd]

The insurance companies win, since they'll be writing less group insurance. The rich aren't affected. The poor are in the same boat as before. A portion of the middle class gets to pay extra taxes, which are passed on in the form of some deductions possibly of worth to the lower-middle class, and all at the expense of Social Security!

Mission accomplished!

 

[lets-retire]

Unless there is comprehensive price controls of health care the insurance companies will be able take more profit. Providing insurance for everyone, will not lower the premiums. Did it lower auto insurance premiums? I don't think so.

Only after people starting complaining about the high cost of insurance did the companies stop increasing the prices. If I remember correctly their excuse for increasing the auto rates was, now we have to cover everybody so we have to charge more because there are some very poor driver's out there. The same will happen with health insurance. We have to charge more, because we are covering people who have some very expensive illnesses.

We are seeing private homeowner insurance going away in the coastal areas hit by hurricanes. The reasoning behind it is the companies won't take the risk. Instead of buying affordable insurance many people are forced to purchase insurance from a government pool. The end result is in Florida the state pool for insurance is very expensive. The DW's co-worker was stating she had to pay $8,000 per year on a 150,000 house. Where I'm at now is not so bad, I only pay $3000 per year on a 200,000 house. 2000 of it is the state pool for wind and hail. To put that into perspective I've lived in the southeast or tornado ally for a total of 21 years. If you include the time my family has lived in these areas it is well over 100 years. Our total losses from wind and hail is zero. I have gone through 12 named storms ranging from a tropical storm up to a category 5 hurricane.

The point is having private insurance bid for contract to take control of health insurance under the guise of cheaper health care is not supported by the actions of insurance companies in the past and I doubt this will work out any differently. Government taking over the health care industry is not much better, in my opinion.

 

[brewer12345]

We are seeing private homeowner insurance going away in the coastal areas hit by hurricanes. The reasoning behind it is the companies won't take the risk. Instead of buying affordable insurance many people are forced to purchase insurance from a government pool. The end result is in Florida the state pool for insurance is very expensive.

This is obviously OT for this thread, but you seem to have misunderstood what has happened in places like FL. Its not that the companies "won't take the risk." It is a simple matter of the insurers not being allowed to charge high enough premiums to adequately cover the risk they are being asked to take. Since the gummint won't let them price adequately, insurers have backed away from the market (or left it entirely). The "insurer of last resort" run by the gummint fills the void, but all that does is postpone the day of reckoning, since the costs will eventualy come back to the insureds (via policy surcharges after the next catastrophe) or to the taxpayers (via a state-funded bailout after the next catastrophe). Sorry, TANSTAAFL.

 

[lets-retire]

Since the gummint won't let them price adequately, insurers have backed away from the market (or left it entirely).

Sounds a lot like won't take the risk to me. They left the market because they can't earn enough from premiums to warrant the risk of the payout from damage. Either way, I think we will see the same trend if the government tries to provide health insurance for everyone through private insurers. Costs will go up because of the higher risk patients, the government will force price controls, then the insurance companies will quit bidding on government contracts citing no profit, resulting in the government taking over the program. The other side of it would be to control the costs of medical care, similar to Medicare. How many doctor's are making a living wage only from Medicare?

 

[brewer12345]

Sounds a lot like won't take the risk to me. They left the market because they can't earn enough from premiums to warrant the risk of the payout from damage.

They would be happy to take the risk if they were allowed to charge enough to cover it. That's what insurers do.

Health insurance is a very different ball of wax due to the extreme information assymetries all around.

 

[ladelfina]

Health insurance is a very different ball of wax due to the extreme information assymetries all around.

And also because, while you can choose to live in coastal FL or not, and you can choose how expensive a house you buy, and you can choose how much personal property you want to insure... with health care everyone starts out the same: with one life and one body, on which we place a value close to infinite.

By rights it should be ten times easier than property insurance. Instead we've made it 100x more complex.

 

[lets-retire]

ladelfina--But you can choose how high of a deductible/copay you have. You can choose if you want an HSA. You can choose to live a healthy lifestyle. The majority of people in this country are overweigt or obese. That means many of them, not all some do have medical issues, have chosen an unhealthy lifestyle.

 

[brewer12345]

ladelfina--But you can choose how high of a deductible/copay you have. You can choose if you want an HSA. You can choose to live a healthy lifestyle. The majority of people in this country are overweigt or obese. That means many of them, not all some do have medical issues, have chosen an unhealthy lifestyle.

Uhuh. So what?

In any case, even for those of us being good and in full posession of our faculties are at a big disadvantage. Do you have any way to comparison shop price and quality of medical services? I don't. Heck, I don't even know what the "real" price of even the most basic stuff costs.

 

[ladelfina]

But you can choose how high of a deductible/copay you have. You can choose if you want an HSA. You can choose to live a healthy lifestyle. The majority of people in this country are overweigt or obese. That means many of them, not all some do have medical issues, have chosen an unhealthy lifestyle.

That is just such a load of BS.. I'm sorry.

I just heard a few days ago that a friend of mine has been diagnosed with breat cancer. She's under 40, weighs about 110#, doesn't smoke and is a committed vegetarian (except for eating fish). She works, as do many, at a company where (fortunately) she has a health plan. But what makes you think employees get to CHOOSE their health plan... much less what level of deductible? THEY DON'T! Maybe some rare few do, but most don't..

What happens if she gets sick enough that she loses her job? After 6 months she'll get kicked off her insurance and then who will take on a woman w/ breast cancer even if she had the $ to pay high premiums.??

MKLD the insurance lady just showed us a list of what'll get you rejected...
HEARTBURN will get you rejected, my friend..
WAKE UP!!!

 

[lets-retire]

ladelfina--Your confusing many topics with your friend. While being over-weight normally does indicate unhealthy living, being within weight does not indicate being healthy. It simply means the person did not over eat, but did they take the necessary actions to be healthy? Did they exercise vigorously enough and often enough to receive the health benefits. I equate many health problems that are not linked to lifestyle to the freak snow storm, flood, earthquake in non prone areas.

I understand what you mean about the health insurance provided by your employer. My last job had one policy. The wife had the option of choosing between three types, none of which I liked. The price for mine was good, it was free to employees. The price for hers could have been lower for family, but it wasn't to bad. The big question is do you have to take the insurance if you are required to pay for it? I think most companies would say no. I that situation you are essentially on the open market and you can purchase the options you find appealing. If you are not paying for you insurance then the cost is irrelevant, no matter what the options. After six months she might get kicked off, then comes COBRA which is still better than going nekked.

Brewer--What are you buying, medical services or medical insurance? If you have an HSA then you can say you're purchasing both, otherwise you're just buying insurance. If your going without insurance then you are buying medical services. There is no incentive to price shop unless you either have an HSA or are without insurance. If I go to the doctor and as long as I stay in network I have to pay a $20, $30, $50 co-pay why should I waste time finding the cheapest doctor. My price is still the same. Once an HSA is well funded I think you will find many people will not shop around, as much.

Something I find interesting is in my current location, my homeowners insurance is about $3000 for maximum payout of about $275,000 worth of stuff. My medical is about $5000 for a maximum payout of 2 mil. I'd say I'm getting more coverage for my money with the health insurance.

 

[brewer12345]

But the type of programs our Supreme Leader is pushing will inevitably force consumers to be shoppers of both insurance and medical services. Problem is, it is virtualy impossible to be an educated, savvy buyer of either as things exist now.

I wouldn't compare the premium to the max payout on different types of insurance. There are too many other factors that affect the calculations of what to charge (state regulations, capital required to be held, rating agency requirements, cost and availability of reinsurance, overhead, etc.).

 

[ladelfina]

For an apparently serious (yet unwittingly deeply, deeply schizophrenic) right-wing take on health care / insurance... go here [or alternately, you could stick hot needles in your eyes, which might ultimately be more rewarding].

http://tinyurl.com/3xo6d2

Shorter version: National Review lady has cancer, • complains about her deductible • runs to the big, bad People's Republic of California to help her extract more dough from her ins. co. (!!!) • admits people are routinely rejected for little or no reason, even retroactively • points out how insurance and hospitals rip people off • says "health insurance isn't a luxury"... and then...

.. somehow she snaps the neck and twists the head around on this sucker so that it's all an argument AGAINST universal health care!


And yes, she had to end it with a comment about hamburgers.

Everyone who has ever eaten a hamburger, apparently, has no right to health care, ever.

 

[mykidslovedogs]

But the type of programs our Supreme Leader is pushing will inevitably force consumers to be shoppers of both insurance and medical services. Problem is, it is virtualy impossible to be an educated, savvy buyer of either as things exist now.

Price shopping is not that hard. All you have to do is make a phone call and ask. When my daughter needed an ultrasound, I called the recommended hospital to find out the cost - I was quoted $1000.00. Then I called her Dr. office. They happened to have an utrasound machine in their Denver Facility. I had to drive a little ways to get there, but the price was only $200.00 and the service was better because it was a pediatric doctor that analyzed the results. People don't want to do the work, but it's worth it. I saved $700.00 of my HSA money by making two phone calls.

 

[brewer12345]

Price shopping is not that hard. All you have to do is make a phone call and ask. When my daughter needed an ultrasound, I called the recommended hospital to find out the cost - I was quoted $1000.00. Then I called her Dr. office. They happened to have an utrasound machine in their Denver Facility. I had to drive a little ways to get there, but the price was only $200.00 and the service was better because it was a pediatric doctor that analyzed the results. People don't want to do the work, but it's worth it. I saved $700.00 of my HSA money by making two phone calls.

Heh, that's right, nobody deserves healthcare because we are all lazy. Thank you for clearing that up.

When DW had our first child 2 1/2 years ago, you should have seen the plethora of co-pays and bills I received. I had no idea what the vast number of them were even for. Don't tell me its easy to comparison shop.

 

[lets-retire]

Heh, that's right, nobody deserves healthcare because we are all lazy. Thank you for clearing that up.

When DW had our first child 2 1/2 years ago, you should have seen the plethora of co-pays and bills I received. I had no idea what the vast number of them were even for. Don't tell me its easy to comparison shop.

So you basically just paid bills and you had no idea what you were paying for? How can you give such good investment advice, yet handle money so foolishly. My wife has had extensive medical care, but I can still tell you exactly what each bill I received was for.

To get back closer to topic the difference is you were paying AFTER the care was provided. MKLD asked for the price beforehand. Recently when my wife changed jobs and we were unsure if we were going to use COBRA I did the same thing. It's amazing what kind of information you can receive if you just ask. Things like basic price will flow freely.

 

[figner]

While being over-weight normally does indicate unhealthy living, being within weight does not indicate being healthy. It simply means the person did not over eat, but did they take the necessary actions to be healthy? Did they exercise vigorously enough and often enough to receive the health benefits. I equate many health problems that are not linked to lifestyle to the freak snow storm, flood, earthquake in non prone areas.

Are you saying that unless someone follows perfectly all the (ever-changing) guidelines for healthy living, their health problems are their own doing?

In the last year this has become quite a personal issue - I'm one of the "freak snow storm" cases who was diagnosed with a brain tumor at a relatively young age. I eat healthy and exercise and am close to what the charts say is my ideal weight. Now post-op, I worry that in case of recurrence I may lose my job and health insurance (after COBRA). If I can get private insurance at all, it's likely to be expensive.

I suspect cases like this aren't as uncommon as many people think. As we all age, we're bound to run into storms now and then - do we really want to preserve the current situation where despite being insured, medical problems have such drastic impact on someone's finances? To me that's exactly what insurance (granted, in my ideal world) should be designed to avoid.

 

[brewer12345]

So you basically just paid bills and you had no idea what you were paying for? How can you give such good investment advice, yet handle money so foolishly. My wife has had extensive medical care, but I can still tell you exactly what each bill I received was for.

Nothing like personal insults to keep a debate going, eh?

Imagine, you are in a stressful situation with people doing stuff behind the scenes that you have no way of even knowing about, let alone price shopping. Someone might die if this isn't done right. You really, honestly think I was about to ask the price of each procedure? Please. If you are going to be an absurdist ******* at least take it easy with the personal insults.

 

[lets-retire]

figner--Absolutely not. What I am doing is replying to ladelfina that there are many choices people make that are not conducive to a healthy lifestyle. As a short search on the net will reveal many illnesses later in life are a direct result of unhealthy living. As far as your tumor goes, I can sympathize. My wife went through brain surgery in 2005 to have a large tumor removed. We are in the same boat as you, and I will not be able to retire until I can receive Social Security because of the cost of her insurance. I'd rather work and have her here than be able to retire and lose even a few years. Studies have shown the median life expectancy after the removal of the type of tumor she had is 6-10 years.

Brewer--Someone as financially savvy as you should be able to recognize that spending money for some unknown treatment isn't exactly the smartest thing to do. At least review the bills to see what was charged and if there are errors. Only you or your wife can say if a treatment was provided, your insurer does not know. Something that might not be unusual for your wife's treatment might not have been needed in her case, but was accidentally put on the bill.

 

[mykidslovedogs]

In an emergency situation, I can see that someone would not be able to do research, but in a non-emergency, I think shopping around for the best price on prescriptions, taking advantage of mail order Rx, looking for generic alternatives, shopping for the best price for diagnostic tests, making more than one consultation with different doctors, getting second opinions, etc...is important. Just taking one doctors word and recommendations without doing some personal investigation, IMO, is foolish. I'm not trying to insult anyone here. I'm just saying that you can save thousands of dollars by doing research. It's not always easy, but well worth the time.

 

[brewer12345]

Brewer--Someone as financially savvy as you should be able to recognize that spending money for some unknown treatment isn't exactly the smartest thing to do. At least review the bills to see what was charged and if there are errors. Only you or your wife can say if a treatment was provided, your insurer does not know. Something that might not be unusual for your wife's treatment might not have been needed in her case, but was accidentally put on the bill.

You seem to be missing the basic impediments to shopping around. Do you really think that the average consumer has any clue even what all of the necessary procedures might be during a hospital stay? Its not exactly a help to get bills that have a person or firm's name on them you have never heard of and the description is a code. How on earth could anyone but the provider or maybe the insurer sort that out?

But hey, I give up. You want to live in a Milton Friedman fantasy world, be my guest. But I strongly suspect that universal care of some sort will be happening in the next 10 to 20 years.