Clinton Health Plan May Tap Pay

PadawanLearner · Feb 13, 2008

I just love it when politicians start talking about SS and health care, considering they don't pay into either (how is that right?).

I'm very much in favor of health care savings accounts and for the ability to take what I'm paying into SS and put it into my IRA. I'm working on the notion that I'll never see a dime of SS which, by the way no one is guarenteed they'll actually ever recieve.

With Clinton's plan, I don't worry about it tapping my gross pay; the more people who have insurance, the more people will seek out health care, which means that more hospitals and more health care professionals will be needed. What I do worry about is the impact on my net pay (tax increases).

Does anyone actually read the Constitution anymore?

JaneyW · Feb 13, 2008

I am also saying thank you for this thread which has remained civil and thoughtful. I live in California where our state mandates that insurers cover everything from accupuncture to chiropractic to rehab to maternity for every policy sold. If you are a young, healthy individual who does not want coverage for these things (does a 25 year-old single male need maternity coverage?) you still have to buy it. This keeps prices up and competition low. We also cannot look outside of our state for lower premiums or different plans.

My husband is self-employed so we pay payroll taxes (already extremely high without adding a proposed 7% for healthcare) and health care full price for ourselves and his employees. So, we pay about $750 a month for a family of 5 for a PPO plan with a $2400 yearly deductible per person. Basically, we are paying cash for our medical care unless we have a catastrophic year. I stick with the PPO option because I have had spinal problems and surgery and understand the necessity of choice in my health care options.

For example, I would love to pay less by opting out of chiropractic and accupuncture and maternity. I don't plan on having any more kids at my age and if I by chance got pregnant mistakenly I would then need to pay cash. I am willing to take that risk and can afford it if I am wrong. Why am I not allowed to make that personal decision because others have made bad decisions or are not capable? Just because some cannot or will not be responsible I have to be forced to have coverage I don't want?

I am not trying to be inflammatory, I am just introducing another side to the debate. There are more options than keeping the status quo or going to universal health care. My household already pays almost 40% of our income to taxes--more if you include SS and sales tax. What about a flat rate income tax? That would free up thousands of dollars in my household that could be spent stimulating the economy and providing income to others. As is stands, my money will be stimulating others (not me).

Am I "wealthy"? No, my husband and I both work and have older, lower end cars. My husband has a high income, but works hard for it--most times 60+ hours a week with only a week of vacation a year because he doesn't have an employer to pay him to take one. To be taxed at almost 40% means that he works until May to pay taxes. How can I possibly believe this will get better with more government involvement?

jjjoy, LPN · Feb 13, 2008

SS isn't a retirement plan and it shouldn't be considered as something to compare with personal investment choices. It's a safety net program. The fact that it pays out to all who have paid into was to appease those complain that they get nothing out of it if they are financially successful. So as long as the system is reworked a bit, those who paid into it will get something back, though maybe not as much or as soon as they had expected. Without a reworking, they may get nothing, so by my figuring, something is better than nothing.

But why pay into it all if you may never use it? For the same reason that we pay for other kinds of insurance. What if your retirement plans fall through for one reason or another? What if you live longer than expected and use up your retirement savings? And do you really want to see elderly people who don't have a good retirement plan simply get no money at all?

I know, I know. Why should you HAVE to participate? Why not let you take your chances? Because then we let everyone else also take their chances. When insurance is optional, many choose to forego it. That's fine when we're talking about extra insurance on a fancy new car to cover potential replacement costs. Only the car owner will have to deal with consequences of their choice. But those who end up without sufficient retirement resources, for whatever reason, end up becoming a burden on society. There might be better ways to fund SS than from payroll taxes, but as an overall concept, I support it.

Certainly, more can be done to encourage personal savings (incentives, opt-out investment programs, etc) and I strongly support such efforts in addition to maintaining some type of social insurance for the elderly.

jjjoy, LPN · Feb 13, 2008

My husband has a high income, but works hard for it--most times 60+ hours a week with only a week of vacation a year because he doesn't have an employer to pay him to take one.

Does he not take vacation because no one can manage things while he is away? Otherwise, he could take the loss and take time off. I've worked jobs that didn't have paid vacation and took unpaid time off for vacations. Is it unfair that an employee gets paid time off? Yes. But being a business owner has it's own benefits, such as the potential to build the business and profit and not just have to hope for a small raise here and there.

To be taxed at almost 40% means that he works until May to pay taxes. How can I possibly believe this will get better with more government involvement?

A lower income worker could complain that they are working til December in order to save just a few hundred dollars for a rainy day. I know the argument, they should work harder, get more education, etc, whatever it takes to increase their earning potential. To do that, they need affordable and accessible education, child care, etc... and our taxes can support that.

I can see the frustration of so much of one's income going to taxes. And some taxes do need changing. Drastically cutting taxes does improve financial bottom lines, but it can have indirect negative impacts. If employees can't afford child care or there isn't good public transportation for the or they avoid health care, it impacts employers. And I personally want to live in a society that at least attempts to keep health care, education, child care, and the like affordable.

Jolie, BSN · Feb 13, 2008

SS isn't a retirement plan and it shouldn't be considered as something to compare with personal investment choices. It's a safety net program. The fact that it pays out to all who have paid into was to appease those complain that they get nothing out of it if they are financially successful. So as long as the system is reworked a bit, those who paid into it will get something back, though maybe not as much or as soon as they had expected. Without a reworking, they may get nothing, so by my figuring, something is better than nothing.
I'll bet my bottom dollar you wouldn't accept that kind of performance from a private investment plan, or your private health insurer. The attitude that one will accept less than promised seems to be pervasive where government programs are concerned though. We've learned that the government can't be trusted to deliver on promises, so we accept what we "get", regardless of what we've paid, or were promised.
Please don't mistake my comment as an absolution of the private insurance industry. There are times when subscribers clearly don't get what they've paid for (Legitimate claims denied, having to appeal for services that are covered under one's policy, etc.) There ARE problems with private insurers, but the difference is that they can be addressed thru legal channels, frustrating and time consuming as that may be. Who will you go to when your SS benefits fall short? No-one. Who will you go to when your government mandated insurance fall short? Again, there will be no recourse.

HM2VikingRN, RN · Feb 13, 2008

I can fix SS with one act of congress.

Repeal the Bush tax cuts on the upper 1% of the income distribution. (People who make more than 400,000/year)

That along with raising the income cap to cover 90% of payroll again would stabilize the system forever. (The alleged superiority of private accounts completely disappears after you factor in the administrative costs of private accounts. Fee erosion of accumulation results in upwards of 40% of accumulated values being taken for administrative purposes.)

One of the reasons we have consistent benefit packages for health care is to achieve a social redistribuion of risk associated with health care.

The biggest difference between the two accounts, though, has to do with how each views the function of insurance. Gina, Steve, and Loretta are ill, and need insurance to cover the costs of getting better. In their eyes, insurance is meant to help equalize financial risk between the healthy and the sick. In the insurance business, this model of coverage is known as "social insurance," and historically it was the way health coverage was conceived. If you were sixty and had heart disease and diabetes, you didn't pay substantially more for coverage than a perfectly healthy twenty-five-year-old. Under social insurance, the twenty-five-year-old agrees to pay thousands of dollars in premiums even though he didn't go to the doctor at all in the previous year, because he wants to make sure that someone else will subsidize his health care if he ever comes down with heart disease or diabetes. Canada and Germany and Japan and all the other industrialized nations with universal health care follow the social-insurance model. Medicare, too, is based on the social-insurance model, and, when Americans with Medicare report themselves to be happier with virtually every aspect of their insurance coverage than people with private insurance (as they do, repeatedly and overwhelmingly), they are referring to the social aspect of their insurance. They aren't getting better care. But they are getting something just as valuable: the security of being insulated against the financial shock of serious illness.

http://www.gladwell.com/2005/2005_08_29_a_hazard.html

Jolie, BSN · Feb 13, 2008

Viking,

That same tired old argument won't fly. The upper 1% of earners have already paid their fair share into SS for negative returns, in most instances.

The answer is not to confiscate more money from the wealthy (or anybody else). It is to insist on proper management of the money that is already in the hands of the federal government.

Unfortunately, that will never happen. (Lock box anyone?)

jjjoy, LPN · Feb 13, 2008

I'll bet my bottom dollar you wouldn't accept that kind of performance from a private investment plan.

SS isn't supposed to compete with a personal investment plan. It's more like insurance.

or your private health insurer.

Some insurance companies do go belly up. As I noted before, I don't think it's a sign of an overall failed social policy that SS needs revamping. Even private insurance companies often change the terms of agreement from year to year.

I don't think SS or UHC should be the only options out there. I prefer the idea of a combination of providing society-wide safety nets along with incentives for individual contributions & responsibility.

PadawanLearner · Feb 13, 2008

I can fix SS with one act of congress.
Repeal the Bush tax cuts on the upper 1% of the income distribution. (People who make more than 400,000/year)
That along with raising the income cap to cover 90% of payroll again would stabilize the system forever. (The alleged superiority of private accounts completely disappears after you factor in the administrative costs of private accounts. Fee erosion of accumulation results in upwards of 40% of accumulated values being taken for administrative purposes.)
One of the reasons we have consistent benefit packages for health care is to achieve a social redistribuion of risk associated with health care.
http://www.gladwell.com/2005/2005_08_29_a_hazard.html

Oh how I love it when people talk about how much a tax cut "cost the government". 1st clue: It was never the government's money to begin with. My IRA consistently makes between 5% and 7% return. That's 300% more (at least) than the return the public gets on SS. Since I pay income tax before I put money into my IRA, I won't pay income taxes when I take money out after I retire. I don't know how they do math, but there's no way fees make up that kind of difference.

The top 1% of earners pay around 1/3 of all income taxes, the top 10% of earners pay 2/3 of all income taxes. Giving them a tax cut only makes sense. Raising more taxes to cover a broken system is no way to fix it.

One way to encourage health insurance companies to lower their rates and/or take on higher risk individuals is to give the companies an incentive. For example, for every 1000 low income people they insure, the company gets a 1% federal income tax credit.

just a thought, ymmv

HM2VikingRN, RN · Feb 14, 2008

I wasn't completely serious in my post. I was speaking to a matter of priorities. SS was never meant to be the sole source of retirement income. it was meant to provide a base part of the retirement system. "The three legged stool." I am in favor of personal savings but there needs to be serious tweaking of that system before we look at SS.

In the recent debate over privatizing Social Security, proponents of
privatization would often ridicule the existing Social Security system as being an
old-fashioned one-size-fits-all program. They were largely right in their
description, but they were wrong about its implications. The Social Security
system might be 70-years-old and simple in design, but it is also cheap to
operate. The administrative costs of the Social Security system are less than 0.5
percent of the tax revenue that it takes in each year.1 By comparison, the
administrative costs of the privatized Social Security systems that were held up
as models for the United States, like the ones in Chile and Britain, are between
15 - 20 percent of annual payments into the system.2
...
Private insurers
charge fees that range between 10-20 percent of the accumulated funds for
issuing annuities.3 This means that the share of workers’ payments into private
accounts that get eaten up by fees from the financial industry can run as high as
30-40 percent.

http://www.conservativenannystate.org/cnswebbook.pdf

Tax policy ultimately is a matter of priorities. We cannot live in a tax free society and in fact the US is one of the lowest taxed industrial societies in the world. Taxes are the dues we pay to assure a civilized society. I question tax cuts that are focused at benefiting the most fortunate members of society from a social justice perspective as well as from a fairness perspective.

http://www.cbpp.org/2-4-08tax.htm

The tax cuts proposed by President Bush carry a greater price tag to society than the VA system, NIH and Federal education spending. Benefiting a few thousand people with tax cuts at the expense of millions is poor policy. Frankly, I think 25 billion in cuts for the upper 1% at the cost of decreased NIH funding which benefits everyone is poor policy.

To bring this back to the original thread topic. Building a better health care system doesn't necessarily require a public only or a private only system. It does require that EVERYONE is paying into the health care system either through private insurance or by being allowed to buy into Medicare.

HM2VikingRN, RN · Feb 14, 2008

one other thought that i had at work last night. we are currently paying for national health care but not getting it. see:

administrative costs consume 31 percent of us health spending, most of it unnecessary.
(woolhandler, et al “costs of health administration in the u.s. and canada,” nejm 349(8) sept. 21, 2003)

half of all bankruptcies are caused by medical bills. three-fourths of those bankrupted had health insurance at the time they got sick or injured.
(“illness and injury as contributors to bankruptcy,” himmelstein et al, health affairs web exclusive, february 2, 2005.)

taxes already pay for more than 60 percent of us health spending

americans pay the highest health care taxes in the world. we pay for national health insurance, but don’t get it.
(woolhandler, et al. “paying for national health insurance — and not getting it,” health affairs 21(4); july / aug. 2002)
http://pnhp.org/single_payer_resources/pnhp_research_the_case_for_a_national_health_program.php

http://www.cbpp.org/9-27-06tax.htm

PadawanLearner · Feb 14, 2008

I really don't know why you're harping about how much the tax cuts have "cost". We really should be focused on reducing government, not expanding it. Reducing the overall cost of government would give everyone a tax cut. Sure other countries pay more in taxes, but those are more than likely socialist countries. When you talk about "social justice" and "fairness", socialism is where you're headed.

If you really want to know where a big chunk of money goes, take a look at bills that get passed and look at all the pork in it. We all once paid for a Dr. Suess memorial, how is that an appropriate use of our money? No one holds Congress accountable to stay within the bounds of the Constitution, which is why we're now talking about a federal budget in the Trillions of dollars.

We can't trust the government to manage Amtrack to make a profit (or break even), and people want to turn over heath care to Hillary? I think not.