Democrats & Liberals Archives

Bush's Health Tax

The president who vowed not to raise taxes as his father did, and who has championed tax cuts instead - even for heirs who never did a stitch of work in their lives - now favors a tax increase for those people who have excellent healthcare plans. He wants to use this extra tax money to offer tax cuts to encourage the currently uninsured to buy health insurance.

This is what Bush told the nation on Saturday - a "leak" about his State of the Union message tomorrow evening. Currently all employer-sponsored health insurance is deductible for income tax purposes. The president's idea is to cap the deductible amount to $7,500 for individuals and $15,000 for families. Employer-sponsored health insurance that is greater than the cap will be taxed for the difference. Thus, a family health plan that costs $17,000 would be taxed on $17,000 - $15,000 or $2000. The tax money gathered this way would pay for tax deductions when an individual buys his own health insurance.

Believe it or not, Bush said the current healthcare system

unwisely encourages workers to choose overly expensive, gold-plated plans.

So Bush thinks that an individual who wants good health coverage for his family is choosing a "gold-plated plan"? Would he call his health plan or the health plans of members of Congress gold-plated? I don't think so.

I guess he wants to discourage employers from spending a lot on healthcare. His eventual goal is to transfer the entire healthcare load from employer to employee. He wants to accelerate the crurrent trend of employers dropping healthcare plans.

Getting employers out of the healthcare business is a good idea. Why should an individual's health be in hock to an employer? However, Bush's approach is wrong. Here are just a few reasons:

  • Poor workers, who do not pay much in taxes, could not afford to buy insurance
  • High-priced consultants and the well-to-do self-employed, would get a welcomed tax cut
  • His approach would do nothing to improve the healthcare system as a whole
  • The tax code would be further complicated (by Republicans who want to simplify it)
A tax only on the middle class is not a way to fix our healthcare system. Americans spend more on healthcare than do any of the industrialized nations in Europe, yet our health outcomes are worse. Incremental changes, such as the president's plan would provide, are one reason for the dysfunctional system we now have. The whole system must be revamped.

Our healthcare system should cover everyone and provide superior - "gold-plated" - healthcare to everyone. We must have a universal healthcare system.

Posted by Paul Siegel at January 22, 2007 5:55 PM
Comment #204449

My understanding of this is that what now I contribute to my health ins. through the company I work for will be taxed which now is non taxable. then when filing at the end of the year I would get an extra $15,000 deduction. Seeing how I only contributed $1,500 towards health ins. the plan would help me.

Posted by: KAP at January 22, 2007 6:31 PM
Comment #204453


This “proposal” has left me, well, just clueless.

I thought the goal was to insure more Americans. If not it should be, 17% of the population being uninsured is a national disgrace.

I fail to see how this would help the working poor obtain insurance.

Posted by: KansasDem at January 22, 2007 6:45 PM
Comment #204460

KAP: Does your $1500 cover the cost of your health care coverage or does your employer contribute as well? If he does, he may want a cut of that $15,000. Remember this as well, If it sounds to good to be true, it probably is.

KansasDem: No, it won’t help low income workers at all. It’s no more than a bribe for those who have healthcare but think it is to expensive and may be leaning towards a national health care program. If the president’s plan were enacted the prices would go up rapidly.

Posted by: jlw at January 22, 2007 7:39 PM
Comment #204462

1500 is my contibution the company pays the rest. I don’t fully understand his plan. Media tends to distort things. So I’ll wait to see what it’s really about tomorrow.

Posted by: KAP at January 22, 2007 7:52 PM
Comment #204476

Paul Krugman shreds this little scam by the Moron-in-Chief:

This ‘plan’ is indicative of an entitled frat-boy who has never had a financial challenge in his life. This administration is in la-la land, without a clue to the very real challenges and desperation going on by the working class.

And the American people have noone but themselves to blame for having to deal with these right-wing ninnies.

Posted by: Tim Crow at January 22, 2007 8:51 PM
Comment #204477

Bush is out to lunch on this idea. I suspect it is his way of pushing high deductible/HSA plans. These are needed so that people will save for their own retiree health care when medicare doesn’t have the cash.

As for govt provided universal health care…..get real. Under such a plan the govt would decide your level of benefits and what they cost you. There would be no incentive to curb high utilization and we would end up with a massive army of govt workers (union of coarse) to handle the administration. Think medicare. what is the financial status of it????

Posted by: Carnak at January 22, 2007 8:54 PM
Comment #204491

Here’s a look at Massachusett’s vaunted new health coverage, and Califorinia’s attempt to fix the leaky boat of health care.

Posted by: Tim Crow at January 22, 2007 9:35 PM
Comment #204497

Lefties rejoice!
Bush is raising taxes and is going to provide health insurance for everyone!
Sounds like a little bit of Pay/Go going on here. It really doesnt affect me. Im self-employed and pay for my own insurance. It may bring my taxes down a bit, but I dont think I will shower my taxman with Gatorade for it.
Why complain? Sounds like youre getting what you want. Youre also getting the troop surge that you asked for…wait, you dont want that anymore.
Reality check…
Dems are trying to destroys Bush by any means necessary, so they will be against this, too.

Posted by: JoeRWC at January 22, 2007 9:56 PM
Comment #204499

“This administration is in la-la land, without a clue to the very real challenges and desperation going on by the working class.”

Tim Crow,

You must be right. My son has a small farm and ranch operation. He works full time on top of that. In the past three to four years most manufacturing jobs around here have gone to using “temps” to avoid paying unemployment and “bennies”. After finding himself and his family uninsured numerous times over the past few years (factor in waiting periods) he started insuring with Blue Cross/Blue Shield through his bank group. His family plan now costs him over $1,100.00 a month. That’s nearly 2/3 of what he earn’s through employment.

And, I’ll add, we’re lucky! I’m on Medicare. Because of the farm and ranch op we get by. How could that work for someone with no other form of income? Health care is breaking the backs of American workers.

Posted by: KansasDem at January 22, 2007 10:01 PM
Comment #204500

Absolutly! Not to worry. His plan will be DOA in congress.Fact is us workers are already paying a huge tax to cover the uninsured. That is why we pay 12$ for a cotton ball. Is Bush’s tax going to be on what we have now or is it going to be on what OUR healthcare really cost? The former ,most likely.
There was a lawsuit years ago. I never head the outcome. Seems that under ERISA employee benefits are supposed to go to the employee. The lawsuit claimed that the fact we pay more to cover those unable to pay means that our benefits are going to others. Seemed to me to have some merit. That would bring down the house of cards in a hurry and the system would have to be fixed. Or we could get used to corpses lying around like we got used to homeless mentally ill people.Ah,the Republican dream.

Posted by: BillS at January 22, 2007 10:03 PM
Comment #204505

I sincerely wish it would be enacted. The mobs with ropes would soon storm the White House, drag him and Cheney out and exact their justice.

Impeachment, smeachment. Get a rope. Supply and demand at capitalism’s finest.

Posted by: gergle at January 22, 2007 10:42 PM
Comment #204514


I’m personally more fond of the tar & feather approach !)

Posted by: KansasDem at January 22, 2007 11:23 PM
Comment #204525

“Fact is us workers are already paying a huge tax to cover the uninsured.”

Bill S,

This is true in many ways. I won’t bother with numbers but once you factor in Medicare recipients (like me), Medicaid recipients, government employees (federal, state, county and local), and all of our elected officials we’re left with two classes of people:

#1. Those who can afford healthcare and pay for everyone elses, and:

#2. Those who can’t afford to get sick because they’re paying for everyone elses healthcare.

Does that make sense?

Remember that everyone who can’t afford an Office Call at the Doc-in-a-box ends up at the ER. And our tax dollars help prop up the ER’s.

We’re all caught in a trap. Insurance companies add no value to the “end-product” and we’ve become a “no value added” nation. If not for our good looks and the military industrial complex we’d be screwed.

And, sheesh, DiCaprio isn’t even happy with his looks.

Posted by: KansasDem at January 22, 2007 11:56 PM
Comment #204569

2 trillion per year. 4x the defense budget.

Posted by: jlw at January 23, 2007 4:34 AM
Comment #204570

The one hand giveth while the other taketh. I have heard Bush reads the Bible. Must be one of his favorite passages.

Two ways to break this spiraling cycle of ever higher medical costs are:

1) increase the population of doctors and nurses dramatically. How?

For doctors, refund the costs of medical school for every graduate with a B+ average, and cap their salaries to $175,000 per year for 7 years requiring they work where demand is greatest for their first 2 years after internship. Then set them free.

For nurses (RN’s), a similar plan capping their salaries for 5 years at $75,000.

The competition by newer doctor’s and nurses offering quality, but far lower medical care costs, would force the veteran doctors rates to drop somewhat as well.

Supply and demand and competitive pricing would allow the government to recoup its medical school reimbursements and far more through lowered Medicare/Medicaid costs. Likely get better quality doctors too!

2) A single payer universal health care system for preventive and standard medical healing - nothing cutting edge, and nothing experimental and nothing cosmetic. Routine diagnosis and treatments only. For medical coverage beyond this, those who can afford it, buy additional coverage or self-insure.

Posted by: David R. Remer at January 23, 2007 4:48 AM
Comment #204582

As is the case with any of the problems facing our Country today, technology and free market mumbo jumbo is the answer. Allow doctors trained and practicing in India or China to set up virtual offices here in America where they can diagnose your ailments at a much lower cost. Allow them to fill your prescription with medications from their home countries at a much lower cost. Buy your insurance from Indian and Chinese companies at greatly reduced rates, of course you will need to use the virtual offices set up by the medical corporations. Deregulate training requirements for doctors,nurses and hospitals. Allow illegal immigrants to practice medicine to lower costs. Fmr. Sen. Frist has shown that people can be diagnosed long distance albeit not always correctly. Most importantly remember the free market can solve all our problems. Free market uber alles.

Posted by: j2t2 at January 23, 2007 9:27 AM
Comment #204604

So Bush, in his wisdom, has proposed a new health plan that would, in fact, cause states, who have attempted to address the problem on thier own, to have to abandon the plans they have implemented. What the hell?

States may have to roll back some or all of their laws that mandate health insurance cover under
President George W. Bush’s plan to reform health care

Posted by: womanmarine at January 23, 2007 1:21 PM
Comment #204619

Get rid of the middlemen.

What kind of moron would impose this kind of tax on the middle-class?

How about fixing the severely complex and dysfunctional tax system. Think how much that would save us in time and money?
But, I guess that would make too much sense, eh?

Gold Plated? Hard to see how any of us have a Gold Plated plan, when we are all vulnerable; when 106,000 Americans die annually due to Adverse Drug Reactions (ADRs), and 195,000 die annually due to preventable medical mistakes.

Of course, insurance companies are going to fight nationalized healthcare tooth-and-nail.

Nationalized healthcare isn’t a very good solution, but it might be slightly better by eliminating one of the unnecessary middlemen (insurance companies). And something needs to be done about the greedy ambulance chasing personal injury lawyers that are getting rich off of other peoples’ pain and misery (like John Edwards, who made $12 million or more doing just that).

The best solution is for Healthcare providers to start dealing directly with their customers again.

Otherwise, many healthcare providers will continue to get squeezed by the current middlemen (government, insurance companies, and greedy ambulance chasing personal injury lawyers), and consumers that simply can no longer afford their services or insurance. Already, many doctors find it increasingly difficult to afford the malpractice insurance (which can cost several hundred thou$and per year), and some states won’t allow doctors to practice without that insurance.

At any rate, looking to government to solve the problem is not the best solution. Especially since irresponsible incumbent politicians in Congress, for decades, appear unable to solve many of the nation’s pressing problems, and why should they when voters keep rewarding them by repeatedly re-electing them. For example, one of the obvious burdens on the healthcare system is illegal aliens. Many hospitals and ERs have closed after being overrun by illegal aliens. But, politicians in Congress still refuse to enforce existing laws, despicably, pitting American citizens and illegal aliens against each other.

Posted by: d.a.n at January 23, 2007 3:00 PM
Comment #204621

Is it possible that the higher cost and lower quality of medical care in the U.S. is because middlemen (i.e. insurance companies) are trying to make medical decisions ?

Posted by: d.a.n at January 23, 2007 3:02 PM
Comment #204908

This is an excellent proposal that should have been made 20 years ago. Most people (including most who have posted here) don’t understand what is fundamentally wrong with our health care “system”, and what needs to be done to correct it.

First of all, IF a tax deduction should be given for health insurance at all, it should be given to all americans, not just those who get insurance through an employer. Currently, there are many americans who have to buy insurance on their own who don’t get to deduct it the way employees do. It’s simply not fair.

Secondly, we need to look at the bigger picture. Congress has warped the current “system” over the years by giving preferential tax treatment to employer-provided insurance, which discourages individual coverage and effectively forces the vast majority of us to buy coverage through our employers. How many of you know how much your health insurance costs? You probably don’t know and you probably don’t care. You didn’t shop for it. That, in a nutshell, is what’s fundamentally wrong with America’s health care “system”.

The main reason costs have skyrocketed is because the market mechanisms that normally control costs—competetion and consumer awareness—have been completely eliminated. Consumers have no clue what their coverage costs (or even what their doctor visits cost), and so their demands are unlimited. Insurance companies have to raise the cost of their policies accordingly and are only so happy to do so.

The trend towards removing employers from the equation and putting health insurance back in the hands of individuals is a positive one, because it puts consumers back in the loop, and causes insurance companies to be more cost-conscious and more responsive to individual needs.

I laughed when I read the comments about the $15000 limit. I buy my own insurance and obviously, most of you don’t. A $15000 policy isn’t health insurance, it’s a country club! I’m sure CEO’s have such policies, but no average americans would pay that much if they knew they were and had a choice. The $15000 limit actually adds a tax to the rich (uncharacteristic of a Bush proposal) and is a very reasonable limit on a tax deduction of this nature.

The worst thing we could do is exacerbate this problem by further eliminating consumer involvement through state-run or federally-run programs. The real solution is to go the other way. Give consumers the power and the responsibility to control their own health care, and force the insurance industry to respond to their needs rather than negotiate with a clueless and politically-driven congress.

The only thing wrong with this proposal is it came 20 years too late!

Posted by: scott at January 25, 2007 12:10 AM
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