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Tax Credit Hides True Cost of Healthcare



In an industry that many claim is economically out of whack, overburdened by regulation, and extraordinarily expensive, government is going to exacerbate the problem by hiding the true cost of healthcare through income tax credits. I've got a better idea.

5 comments on "Tax Credit Hides True Cost of Healthcare"
Todd (10/19/2010 at 9:35 PM)

Chantico, more employer could self-fund if they would like. In fact, employers can self-fund all the way down to only 15 employees if they are willing to accept the risk and/or can obtain reinsurance. But as long as Medicare and Medicaid continue to underpay providers, employers and health plans will see large cost increases year over year.
Chantico Skky (10/18/2010 at 8:36 PM)

The article is spot-on, but we need to look at how people are "insured," as well. In addition to allowing the inter-state sale of health insurance, for employer-provided healthcare (assumed as a non-mandated benefit), all employers should be allowed to be self-funded (pooling the contributions to provide the security) and should use a TPA and rented MD network to pay its claims directly. Instead of paying monthly premiums to an insurer, the money is set up in an escrow-like account and claims are paid out as they occur. The insurance companies make untold millions by collecting premiums for those insured who rarely seek care. Being self-funded puts the private employer in the same boat with union trusts[INVALID] who are also self-insured, but at the cost of the employing corporation.
Corbett (10/15/2010 at 1:30 PM)

Let's take your idea one step further...if the goal is to stop the decades of double digit cost increases in the health care industry, let's increase the patient's share of financial responsibility for care. Start by augmenting Medicare's proportion of patient responsibility, scale it over the next ten years to gradually grow to 50 percent by the end of 2020. Other payors will follow suit. Then someday we could truly have an industry where people are encouraged to shop, forcing providers to be more cost conscious and quality focused.
Ken Peach (10/15/2010 at 1:28 PM)

Philip - You hit this one on the nose. Nothing will control costs like removing the third party payer (insurance or government) and letting consumers use their own cash for care. At a health costs town meeting last weekend in Orlando, I shared a 3-level pyramid diagram that illustrated from the bottom up how consumers can use self-care at next to no expense (education, FreeMD.com, MedLinePlus), preventive and primary care for little expense (retail health clinics, PCP offices, Any Lab Test Now, etc.), while only insuring for the greatest risks with high-deductible hospital and surgical insurance at the top. Allowing consumers to open their wallets and purses to self and preventive care will go far toward ending the use of expensive health care interventions.
Ploni Almoni (10/15/2010 at 1:25 PM)

Spot-on article, Phillip. However, your last sentence is not cynical ... it is the truth. The insurance industry is getting a blatant "kickback" from Uncle Sam [INVALID] and the US taxpayers get the double whammy of mandated purchase of a private consumer product while also having to foot the bill for the $110+ billion dollars for tax credits. It is simple extortion; it's immoral; and it's illegal. Track executive bonuses and you will see those continue to obscenely increase. Obamacare proves that Congress is merely the lacky of special interests [INVALID] they were bought off to pass this abomination. How else can you explain the transfer of my and your wealth from our pay-checks to Uncle Sam and then to insurance companies [INVALID] it is like asking for a donation and picking my pocket at the same time. A more fair, just, and equitable solution would be a single-payer system that is based on payroll or VAT taxes, eg. extending Medicare/Medicaid to all US citizens. Free market capitalism (which we don't have in this country) does not allow for consumer "mandates" or "tax credits" not directly apportioned to the tax-payer. But, that is right Obama and the Elites know best! Silly me!