The only sure way to fund universal healthcare

With revenue scarce, Obama is going to have to borrow an idea from John McCain to pay for universal healthcare.

By Robert Reich

May 26, 2009 | During the presidential campaign, I thought Obama made only one big policy mistake. He criticized John McCain for proposing to tax all employer-provided health benefits. McCain's overall health plan was regressive -- he would have turned the savings into tax credits for purchasing healthcare -- but he was right about where the revenues should come from. I worried that Obama would come to regret the position he took.

Half a year later, it appears that the President will need to tax employer provided health benefits in order to finance universal healthcare. Or at least the tax-free benefits now enjoyed by higher-income employees. Many in Congress and in the White House are convinced it's the only good option. Max Baucus, chair of Senate Finance, explicitly put it on the table last week. Peter Orszag, the President's budget director, has told Congress the option should remain on the table.

The White House is in a revenue bind. The President had intended to raise money for healthcare by limiting the income tax deductions that wealthy taxpayers can claim. This would have generated some $318 billion over ten years, about half of Obama's proposed "healthcare reserve fund." But the proposal ran into a buzz saw of opposition from congressional Democrats. Not only did Baucus balk but so did Charles Rangel, chairman of the House Ways and Means Committee.

With deficit vultures already circling, Obama has to come up with a far more reliable way to fund healthcare. That's where employee health benefits come in. According to the Congressional Budget Office, taxing all employee health benefits would yield a whopping $246 billion every year. Even limiting the tax to higher-income employees would go a long way to funding universal healthcare. Employer-provided health insurance is the biggest tax break in the whole federal income tax system.

Tax-free employer-provided health care is also, in effect, the government-backed health insurance system we now have. It now covers three-fifths of the American population under 65. Seventy percent of the 253 million Americans with health insurance receive at least some of it through their employers.

Which is exactly the problem. Most middle-class American families rely on it and won't want to give it up even if a new universal system becomes available. Organized labor rightly considers these benefits among the union movement's proudest achievements.

But, face it, it's become a crazy system. You're not eligible for these benefits when you and your family are likely to need them most -- when you lose your job and your income plummets. And these days, as we're witnessing, no job is safe. The system also distorts the labor market. It prevents lots of people from changing jobs for fear they'll lose their health insurance, or won't get the benefits they do now. And it invites employers to game the system by seeking young, healthy employees who pose low risks of ill health and will therefore keep insurance costs low, while rejecting older ones who are likely to have more costly health needs. The system also encourages employers to try to push married employees onto their spouse's health insurance plan so that the spouse's employer bears the cost.

It's also an upside-down system. The biggest share of the $246 billion goes to upper-income people. The lower your pay, the less coverage you're likely to have. Workers in lowest paying jobs don't generally get any health insurance from their employers. Few people collecting $12 an hour at fast-food restaurants or big-box retailers see any part of the $246 billion. The higher your pay, the more health coverage you receive, and the bigger chunk of the $246 billion you get. Top executives and their families get gold-plated plans guaranteeing top-notch medical attention for just about every risk imaginable, along with extra coverage in retirement.

The good news is that a program providing universal healthcare doesn't need the full $246 billion a year generated if every employee now receiving tax-free health benefits had to start paying taxes on them. Obama's healthcare reserve fund needs around $650 billion over ten years. So a sensible and politically feasible alternative is to limit tax-free employer-provided health benefits to workers whose incomes are under, say, $100,000 a year, and subject those with higher incomes to progressively higher taxes on them.

http://www.salon.com/opinion/feature/2009/05/26/healthcare/

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All I can continue to say is:

Obama supporters - "Still in Denial"

They have been Had Over and Over Again:

Earmarks

Lobbyist Appointments

Continuation of Bush Bailouts

Continuation of Military Tribunals

Keeping Bush's Secretary of Defense Gates and 65% of Bush employees
in Defense Department

Violated established rules of bankruptcy in government intervention
of Chrysler

Trillion Dollar Deficits

Soda tax, tax all employee health care benefits - stay tuned

obama has yet to have an original good idea that i can think of

Tax employee benefits? Once again, increase taxes on businesses and see what happens. employee healthcare will disappear as will jobs at those that do not rid of the plans.

All hurts the bottom line. When will the government realize that taxing the top hurts the bottom, not the top.

never ntil the """people""" realize business does not pay taxes

they just pass them on to the consumer as a cost of doing business

I just love it. These senseless mind-farts of illiterate idiots from some political party are actually called "ideas".

Are you kidding me?

Where is the "idea" in helping me with my health care by taxing my health care plan?

Can I similarly help you to save some money by spending a buck of your money for every buck you spend by yourself?

Really, folks, this does feel like an alternate universe already. If this BS about health care makes sense, then I must be a complete idiot, because to me it doesn't.

If I had health insurance I probably wouldn't give a rats ass if you had healthcare or not either. But, if me having it could help someone else get help...I wouldn't mind so much.
I don't have any. I am so sick right now. FIFTEEN DAYS sick. I cannot even see a Dr.. Emergency room is out. Ever deal with them when you are broke? Ever had to see the bill for it?

Prescriptions are a no no. Can't afford them either. I work, I have a job. I can't even get simple healthcare.

Times use to be where people helped others.

A good healthcare would assure us "without" at least some kind of Dr appointed evaluation. They are so expensive...me and others like me have to stay sick and hope for the best.

I am waiting anxiously for some help from someone! I don't give a crap if it Obama or Macain! Just find a way to get us some help.

Kat

maybe you should make it look like you commited a crime

then they put you in custody give ya medical care and you provide the proof you did not commit the crime

just hope it does not back fire on ya

criminals get better health care than the mjority of honest working citizens

but hey

what do i know

(do they have a free clinic in your area)

What a bs. What prevents you from:

a) getting a job that comes with insurance?

b) make more money so that you can just buy your own insurance?

Why is it perfectly possible for me, but yet impossible for you? As for people helping each other, what exactly do you offer as your help for me? Or, is it only supposed to be in your favor, but we will call it "helping each-other", right?

Robert Reich is relatively credible

but him saying (he thinks) Obama will need to do something doesn't equate to Obama having done it

There are more jobs out there that don't offer health insurance then there are jobs that do!!

Make more money? Easier said then done. Let's be real here.

Count yourself as a lucky one.

How dare you attack her for having a job and calling her story b.s.
She works hard and she is taking care of herself the best that she can.

Where is her help to me? How dare you to suggest that only I need to help others, but other do not need to help me?

how dare you...

to dare...

to suggest...

to dare...


oh never mind

They have free clinics, but...you can't make more than a certain amount to qualify. I think it is like 350.00 a month.

I have been incocerated. I got nothing but...they wanted to drug me up with ametrptoline like all the other women were. It was shameful They drug the women to keep them in line it seems. There is no dentistry, I know inmates. They may get a tooth pulled but that's it. Unless you stay in there for years. You may get them pulled and false ones.
As for showing proof you didn't do a crime? Good luck with that. It cost a fortune to prove anything. When the money runs out...the DA takes over and you do what they say. That is if you want to walk free. There are so many jailed innocent people it is sickening to think about.
Eveyone hears that they didn't do it...but know what?? A lot of a times they didn't.
I was spouting off cause I feel like hell and can't see a Dr.
I apologize for being an ass.

Kat

Prisons don't have the health care that we might think. One of my neighbors has an ex in prison. He can't get health care for his bad kidneys and Hepatitis. He's not doing well.

Where did I suggest that you need to help others and nobody needs to help you?

It isn't bs. Jobs with health insurance is hard to find, period. I have never had a job that offered it, even before I had a felony. Any felon, dui, dwi, drugs,false pawn,theft, any of those keeps you out of a good job market. There is no restituion for these kinds of people. They pay out the nose to their lawyers, the courts, pay the restitutions, and do the probations, then get off with flying colors without even a ticket...then let go into an unforgiving world where we are told you did your time and are forgiven. Go and live. HA!!!!

Felons good man do not get those jobs. Felons are lucky to get any job.

Women have a hard time period finding a good job that pays anything, unless they have college education, if then. Or connections. I have tried to check into insurance payments....that was joke in itself. I have never made enough money to pay those prices much less the deductable.

Now in my sisters case. She just went through chemo. She had insurance, they cut her off and she had to get cobra. That is about to expire now. Then she will be stuck. She has a port in her chest. It has to be removed surgically. We have tried to find her insurance to cover her after it is gone. No one will take her. Well, they will, through Oklahoma insurance fund. It takes 7,500 dollars up front then deductable. She is high risk. What is she supposed to do? They will not remove her port til she has a clean slate for two years.

It will be ten years before an insurance company even gives her a chance.

As I said earlier...I am a bit cranky...I apologize. 15 days of this is a bit hard to do.

Kat

All I can say is "you don't know me. And that isn't any fault. I have been a better person than you or anyone knows to those without. I haven't always been poor. I haven't always been a felon. It was a minor incident. But, I have to pay from now on. I have done so much in my life, and NEVER EVER asked for anything in return.
Shame on those that have to ask for payment in return.

Kat

I have not even touched your personality. It's beside the point.

You want my money for your own use. I haven't been to prison. I can tell that jobs are easy to find, and most do pay insurance.

I just can not see the "other" part of "people used to help each other". All I see is those people wanting something from me. I don't want anything from anyone.

Everyone who say this, is simply scamming for benefits. Never ever they offer anything to help me. But they always say "each other".

Nogames, while i understand your point its not really fair to compare yourself to anyone else. I dont know either of you but i am assuming that a 39 year old man in California might have completely different opportunities to a 55 year old woman in Oklahoma. Some people need help more than others, its not always about people wanting things for nothing.