Bush preparing for employers to drop

[SoulMatrix]

Feb. 20, 2006, 7:30PM

Guess who the big loser is under Bush health plan

By FROMA HARROP

Heads up, Americans. The Bush administration is now greasing the skids for employers to drop your health coverage. This is a biggie.

Radical change was not the headline when the president unfurled his latest proposals for health savings accounts. It was presented mainly as a sensible-sounding way for people without medical insurance to buy it with pre-tax dollars, the same way companies do.

Bush's new HSA is actually a rocket-powered tax shelter dressed up as a sweet little program to help the uninsured. It would also undermine the traditional health coverage now offered by employers. (More on that in a minute.) And in case anyone still cares about deficits, it would cost the Treasury $156 billion in lost tax revenues over 10 years — more than wiping out any savings Bush hopes to achieve with his cuts in projected Medicare spending.

An HSA lets people put pre-tax earnings into a tax-advantaged account to be tapped for medical expenses. They must also buy a high-deductible health insurance policy to pay for big-ticket medical needs.

Bush's HSA proposal is a wedding cake of tax credits piled on top of tax deductions. And unprecedented in the annals of tax breaks, this one would tax neither the earnings going into the accounts nor the withdrawals coming out. This is unlike 401(k) plans, where people contribute pretax dollars into accounts but pay taxes on the money they withdraw.

If you thought that the people most in need of help buying health coverage were the working poor, you haven't been hanging around administration circles. The Bush plan would raise the amount that could be contributed into an HSA to $10,000 a year, a sum even most middle-class families don't have lying around.

"This is not about health care anymore," notes Jason Furman, senior fellow at the Center on Budget and Policy Priorities. "It's an excuse for allowing people to put $10,000 away tax-free."

The center figures that for a family making $180,000, a $1,000 contribution into an HSA would reap a $433 tax subsidy. If that family makes $15,000, the subsidy would total only $153 — and that's assuming that a tax credit is made refundable. Otherwise, it would be zero.

Demonically, the Bush proposal gives employers new reasons not to offer traditional health coverage, or any medical benefits at all. Indeed, the new health savings accounts could do to the traditional health plan what the 401(k) plan did to the traditional pension: Kill it off.

Like 401(k)s, the proposed HSAs could save money for employers while transferring the cost and risk of providing what was once an expected benefit onto the workers. The move from traditional pensions to 401(k) plans has already amounted to a major hidden pay cut for millions of American workers.

Under the Bush plan, small businesses would have new reasons not to offer employees coverage. Big companies can still get good deals by buying insurance in bulk. But because the Bush plan would end the tax advantages of purchasing employer-based coverage over buying insurance in the individual market, small businesses might just opt out of the whole health-benefit thing. The boss and other top-earning people, meanwhile, could retreat to their own HSA tax shelters.

Health savings accounts would be most attractive to the healthy and wealthy, drawing this group out of traditional coverage. That would leave the sick and poor in the higher-cost insurance plans, which would then sink.

So the Bush proposal would actually cause more Americans to lose coverage than to gain it. In 2004, MIT economist Jonathan Gruber computed the numbers on the basis of a health savings account proposal that was far more modest than Bush's. He figured that adding a tax deduction for buying high-deductible health insurance to the tax-advantaged HSA would result in 1.1 million currently uninsured people obtaining coverage. These would be mostly the richer folks who are uninsured for some reason and who make enough money to fully enjoy the tax breaks. But the changes would lead to 1.4 million people losing their employer coverage. Guess who they would be.

http://www.chron.com/disp/story.mpl/editor...ok/3672813.html

[Glacies]

Times like these make me think of two words..."OH CANADA!!!" yup, what will bush do next...

[SoulMatrix]

Yep I have no idea what hell do next Glacies. Probably screw over the middle and poor class more like hes been doing.

Edited February 22, 2006 by SoulMatrix

[+joc]

Yep I have no idea what hell do next Glacies. Probably screw over the middle and poor class more like hes been doing.

And how is your being poor Bush's fault?

[Glacies]

ah, no where had he said it was bush's fault, nor had he stated he was in fact poor. he merely noted bush was messing over the poor and middle classes.

[billystevo]

Thank God im British , we have free health care , looks like Bush is screwing you again , you voted for him

[SoulMatrix]

ah, no where had he said it was bush's fault, nor had he stated he was in fact poor. he merely noted bush was messing over the poor and middle classes.

Exactly. Thx for paying attention Glacies . In case you havent noticed Joc hes been screwing over the middle class and poor ever since he came in to office. Now the fact that you said "Is it bush's fault your poor?", just shows me that I think you dont really give a dump about poor and the middle class. Your just another person who got brainwashed by Bush. Your all the same to me. Billystevo is right. Americans dont deserve this braindead moron in office. He has a right to say anything he wants. Go ahead all you non-americans critisize our Gov and Pres as I don't care about them. *****n bush lovers.

[+joc]

Thank God im British , we have free health care , looks like Bush is screwing you again , you voted for him

News alert: Your health care isn't free...think it is? Look at your grocery bill, gas bill, energy bill, etc, etc, etc. Your health care isn't free.

If all you are interested in is freebees...looks like your in the right place...Uh, how much do you pay for a litre of gas now? And, how far over seas does it have to be shipped to get to you...oh yeah, right, I forgot...they have to ship it over here where we think the price of $2.00 per gallon (approx 4 liters) is outrageous.

[billystevo]

Well i agree i suppose we have to pay for it with our taxes as you say, but everyone is treated so i think its worth it . Your petrol will be going up soon so don't expect your exempt. Having worry free health care in Britain is fantastic knowing you will be treated whatever your means was the best thing this Country introduced. You have to have insurance to meet your needs , so the poor don't get treated, thats defiantly bad .

[+joc]

Well i agree i suppose we have to pay for it with our taxes as you say, but everyone is treated so i think its worth it . Your petrol will be going up soon so don't expect your exempt. Having worry free health care in Britain is fantastic knowing you will be treated whatever your means was the best thing this Country introduced. You have to have insurance to meet your needs , so the poor don't get treated, thats defiantly bad .

Billy, the price of our gas is going to go up...and it's going to go down...that is how the market place works...

...You don't have to have insurance in this country. I can walk into any Emergency Room and get treated....it is against the law to refuse treatment. I can call an ambulance if I need and they have to come get me and take me to the ER where treatment cannot be refused. If I have to go into the hospital...there is at least one Charity Hospital in every major city. However, if I CHOOSE to pay for a health care premium...the cost is significantly lower than what your everyday life with high taxes costs you. Which is why I say your health care is not free. And our healthcare is the best in the world...why is that do you suppose? Because we as Americans are smarter? No. We aren't. So why? Why do we have the best healthcare on the planet? Because it isn't free. The first thing you lose when you mandate health coverage is quality. I'd rather pay insurance premiums and have top of the line healthcare than to have free health care and be told which doctor I can see and oh btw..you need an MRI...come back to see us in 9 months and we'll see if we can work you in.

Edited February 22, 2006 by joc