No Gold for You

This week in his State of the Union speech, the president is set to outline a new plan which would be aimed at helping to provide health insurance coverage for people who have none. According to an article reprinted in the Seattle Times, “The basic concept of the president's health-care plan is that employer-provided insurance, now treated as a fringe benefit exempt from taxation, no longer would be entirely tax-free. Workers could be taxed if their coverage exceeded limits set by the government.” In the president’s plan, “The administration would cap the amount of benefits that can remain tax-free at $15,000 for a family and $7,500 for an individual; anyone whose health insurance cost more than the cap would pay tax on the difference. The cap also would be used to establish the amount of the new deduction for people who lack coverage. In this example, a family buying insurance could take a $15,000 deduction — even if the insurance cost less.”

OK. So the federal government wants to tax the difference between the $15,000 cap and whatever the excess cost is. I guess this is like allowing a certain amount of income to be untaxed, but when you earn more than that amount, you have to pay tax on the difference. I get that. I don’t like that if my insurance cost goes up, which it has every year, I’ll soon be paying tax on the difference. But I get it. Apparently, the tax revenue generated is supposed to offset the cost of the next part of the plan, the tax deduction for people who have to purchase their own insurance. The way I understand it, if I bought my own health insurance instead of getting it through work, no matter how little it cost, I could claim a $15,000 deduction on my income taxes. However, I’d venture to guess that most people who don’t get insurance through work either can’t afford what their employer offers or they aren’t offered insurance at all. If the former is the case, these people can’t afford an outside plan either. If the latter is the case, they probably are not paid enough to even consider buying insurance on their own. In either situation, a tax deduction won’t do them any good because they likely already have enough deductions to make their adjusted gross income below the taxable limit. Another deduction is not going to put more money in their pockets to be able to buy health insurance.

What this plan sounds like to me is just another way of collecting more tax to fund the unpopular war effort.

In his Saturday radio address, the president said that the way people normally purchase health care, through their employers, “unwisely encourages workers to choose overly expensive, gold-plated plans.” Now that’s an elitist statement if I’ve ever heard one. A worker who is willing to spend a little more for the better of the plans that his or her employer offers should not be criticized for wanting the best that is offered. I want the president to show America his health insurance plan. I’d be willing to bet it’s more than “gold-plated”—it’s solid gold, I’m sure. I’d like for him to live like an average American for just one year, with an average salary and an average health insurance policy, and see what it’s like to wonder whether insurance will cover a hospitalization from a major illness or accident.

This plan won't do anything to help people who already can't afford insurance. And it certainly won't help those who because of pre-existing conditions must either pay outrageous insurance premiums or do without.