Let's make health care more affordable for citizens by making it more expensive.

[MrFun]

Can someone seriously explain to me how McCain's idea of taxing our health care benefits as income would make it more affordable for people?

[MrFun]

[Pekka]

Yes, you didn't get the point an old man came up with, what does that say about you? MrFun, let it go. This question of yours is not interesting and not worthy of an answer. You will probably use it to spin this thread into a heated hate discussion about religion, values and racism. Stop. Please, we ask you to stop before it gets out of hand.

I for one will contribute to the world by playing some Call of Duty 4 more, and go work 3 hours late because of that.

Ta-ta.

ps. leave McCain alone.

[MrFun]

Well I don't understand how you make health care more affordable by taxing people's health benefits as income.

I want to know how that works.

[LotC]

Why do you hate America MrFun?

[Pekka]

I don't get it either. They say the world hates America, yet here we are, two foreigners, wondering why MrFun hates America so much.

I just want to know how that works.

[Kidlicious]

It doesn't Mr Fun. I don't know if you realize that or not.

A tax credit does not make something more affordable. It gives people money who already have insurance.

[Pekka]

Kid, Credit is good. The word itself feels good, sounds good and means good. Credit means you can afford it even if you don't. Now what is better than affording something you can't afford? Nothing! It's like having sex with a chick who won't put out. Do you hate sex Kid?

[Barnabas]

Credit = Debt

And debt does not sound good

[Ell_man]

Here's the argument:

http://www.aei.org/publications/filter.all,pubID.23673/pub_detail.asp

"The current tax exemption has helped create a health-care system dominated by low-co-payment, employer-sponsored health plans. The tax exemption is the principle reason that five out of every six health-care dollars are spent by someone other than the person receiving the care. Quite naturally, this system has evolved into one that is excessively costly and wasteful."

The conclusion from this interpretation is that the insured buy wasteful medical care because they don't pay the full price. This extra demand for medical care pushes up the price but doesn't improve health outcomes much.

It does sound contradictory though. Pay more in taxes and you'll be better off... not a usual conservative statement. I find it hard to believe that if the tax system can be so distortionary in the medical market, why hasn't it distorted other markets? However, I think the diagnosis of the medical market being distorted by 3rd party payment makes sense though. Something like 80 or 90% of medical payments are made by 3rd parties(priv insurance or government). Health insurance covers activities that are predictable and not so costly like medical checkups and new eye glasses, as well as rare and financially catastrophic events.


Here's an academic working paper about it: http://papers.nber.org/papers/w9567

[Aeson]

I was wondering about this myself...

See just a few weeks ago I finally gave in and went to see a doctor about some nagging health issues. I went into the clinic and sat there for about 3 hours, then the doctor saw me for about 5 minutes and told me it was probably nothing, prescribing anti-biotics and allergy medicine just in case it was something that would eat off my face or make me sneeze. High quality health care

On my way out I paid by credit card (I don't have insurance), and verified that that was all that was to be paid. A couple weeks later I get a bill. There's my original billing listed... and the payment (received) too... and it's crossed out and a new bill listed instead, more than double what I originally paid.

I guess they were just trying to make it more affordable for me?

[asleepathewheel]

medical bill accounting is a peculiar business.

[MrFun]

Originally posted by Ell_man
Here's the argument:

http://www.aei.org/publications/filter.all,pubID.23673/pub_detail.asp

"The current tax exemption has helped create a health-care system dominated by low-co-payment, employer-sponsored health plans. The tax exemption is the principle reason that five out of every six health-care dollars are spent by someone other than the person receiving the care. Quite naturally, this system has evolved into one that is excessively costly and wasteful."

The conclusion from this interpretation is that the insured buy wasteful medical care because they don't pay the full price. This extra demand for medical care pushes up the price but doesn't improve health outcomes much.

It does sound contradictory though. Pay more in taxes and you'll be better off... not a usual conservative statement. I find it hard to believe that if the tax system can be so distortionary in the medical market, why hasn't it distorted other markets? However, I think the diagnosis of the medical market being distorted by 3rd party payment makes sense though. Something like 80 or 90% of medical payments are made by 3rd parties(priv insurance or government). Health insurance covers activities that are predictable and not so costly like medical checkups and new eye glasses, as well as rare and financially catastrophic events.


Here's an academic working paper about it: http://papers.nber.org/papers/w9567

Thanks for the post.

[Kirnwaffen]

"The current tax exemption has helped create a health-care system dominated by low-co-payment, employer-sponsored health plans. The tax exemption is the principle reason that five out of every six health-care dollars are spent by someone other than the person receiving the care. Quite naturally, this system has evolved into one that is excessively costly and wasteful."

So, let me see if I understand this: People go get unneccesary healthcare because they're not paying for it, which drives up the cost? That's actually ridiciulous.

[Ramo]

There is some merit to this argument. The employer tax deduction for health care means that health care users are divorced to some extent from the actual costs. So if you sever the link, the argument goes, individuals make more "rational" health care choices.

But the argument relies on the assumption that people are generally getting too much health care, and instead they should have low deductible, high co-pay health care. Which actually deters people from getting stuff like preventative care, which drastically lowers costs long-term. In other words, McCain believes what an individual considers rational (I'm not going to get sick, so I'll get crappy insurance + a 42" tv) is necessarily beneficial to society.

Needless to say, enacting this idea would be a pretty bad. Probably worse than the already awful status quo. It's worth pointing out that it looks like McCain was frightened by the electoral implications of pushing this ****ty idea, and dropped it a couple days ago. The new plan pays for the tax credit with huge cuts in Medicare and Medicaid instead. Good luck in Florida.

http://online.wsj.com/article/SB122315505846605217.html?mod=googlenews_wsj