Latest Post | Last 10 Posts | Archives
Previous Post: Congress wants unfunded state mandate for universities
Next Post: Question of the day
Posted in:
* Sauerberg unveiled a plan to revise the health insurance system…
Republican U.S. Senate candidate Steve Sauerberg says the nation’s health care system must undergo a free-market, capitalist overhaul to better serve the American public. […]
Along with fighting insurance fraud and simplifying the application process, Sauerberg’s health care plan would credit subscribers who buy their own insurance. Sauerberg proposes that taxpayers receive a $2,000 rebate for individuals, or a $5,000 rebate for families, to purchase their own insurance, as opposed to giving employers a tax benefit for providing their employees with insurance.
“Giving families control over the insurance they purchase will also ensure that individuals get the coverage most appropriate for their age, and need,” Sauerberg said.
The article doesn’t explain it, but it looks like Sauerberg wants to take away the employer tax benefit. That may not go over too well in a campaign. It’s not like he’s gonna win anyway, but go ahead and discuss.
posted by Rich Miller
Tuesday, Mar 11, 08 @ 9:25 am
Sorry, comments are closed at this time.
Previous Post: Congress wants unfunded state mandate for universities
Next Post: Question of the day
WordPress Mobile Edition available at alexking.org.
powered by WordPress.
to take away the employer tax benefit.
Going to a single payer takes away the tax benefit. It looks like what he is proposing is making that benefit a PERSONAL benefit. If you do that AND make it possible to sell a policy nationwide, THEN you do get some real cost savings.
Then we will see what people in IL buy when given a chance.
Comment by Pat Collins Tuesday, Mar 11, 08 @ 9:30 am
Forgive me, but didn’t he try and release a healthcare proposal in the primary? Is this different?
Comment by downstateindivoter Tuesday, Mar 11, 08 @ 9:32 am
I believe that is the McCain plan too. The challenge is not who pays the insurance - individual vs employer, it is about getting a large enough pool of subscribers so that the cost for individuals is reasonable. (As far as I know, McCain has no solution.)
As it stands now, the expectation is that too many “healthy” people would not subscribe, leaving the overall pool of people to those who need medical care.
Comment by RBD Tuesday, Mar 11, 08 @ 9:39 am
this is the same plan obie ran on. it’s a loser. driving up peoples health care costs by removing the risk pool is not a winner.
Comment by jerry 101 Tuesday, Mar 11, 08 @ 9:52 am
Rates for individual plans tend to be much higher than rates provided by employers (or other large groups).
Looks like he is in favor of substituting expensive health insurance for cheap health insurance.
That sounds like a winning campaign for me: “Vote Sauerberg, and Pay More for Health Insurance”
Comment by Skeeter Tuesday, Mar 11, 08 @ 9:54 am
Americans who believe in choice and freedom need to lead the reform regarding health care or they will see the situation demogogued into a governmental solution where everyone loses.
I applaud Sauerberg for standing up to the demogogues who pretend that universal health care is a reality.
Comment by VanillaMan Tuesday, Mar 11, 08 @ 9:59 am
Right, because someone is going to buy health insurance because they are going to get a tax credit a year and a half later.
A) Look, rebates are great. They help people pay for the high cost of insurance. But if they aren’t paired with efforts to control costs and make insurance more affordable in general (through pools, or reinsurance), then they are nothing more than the insurance industry’s best friend.
B) If you just do rebates/credits alone, there is nothing to stop the insurance industry from just raising the cost of premiums accordingly.
C) Given that the average family premium costs $15,000 / year, it means a family will still have to come up with $10,000 / year to pay for that insurance. The 47 million uninsured are uninsured because they can’t afford even $10,000 / year.
D) Why not just provide reinsurance for groups so you can lower premiums by 33-50%? That will be a bigger savings for families, and it isn’t just giving money to insurance companies.
So, it is a good start, but unless it is paired with other efforts, it is nothing but a huge payoff to insurance companies.
Comment by GoBearsss Tuesday, Mar 11, 08 @ 9:59 am
I have to go with Skeeter on this. From my experience employers are able to get insurance a lot cheaper based on the size of the risk pool. Further, it is much easier for most to handle insurance thorugh their employer, who takes the cost out of payrol. Why not reward employers who proivde insurance with a tax incentive? (I would also support providing this for individuals as well)
Problem with individul policies is people do not do well with keeping their payments up. Unfortunetly even with mandatory car insurance, when times are tight, people let their insurance lapse and skip those payments. At least with an employer based system they do not have the option ot let insruance lapse.
I would rather see them provide incentives to employers and insurance companies to carry/offer a variety of plans.
Comment by Ghost Tuesday, Mar 11, 08 @ 10:02 am
Eaualize treatment of health benefits. Give the deduction to the employer or the employee instead of discriminating in favor of employer based coverage. It would transform things overnight.
And uh…group insurance is more expensive than individual coverage. I run a business. I’ve done the comparisons. With regard to individuals not paying… it’s a free country if people don’t want to pay for health insurance they shouldn’t have to. It isn’t up to govt. to make us responsible. These are adults, not children.
Comment by Greg Tuesday, Mar 11, 08 @ 10:25 am
Greg,
You need to find a new insurance agent.
Generally, the bigger the risk pool the lower the premiums. It is a universal law of insurance.
Comment by Skeeter Tuesday, Mar 11, 08 @ 10:44 am
Don’t forget that individual policies don’t have the regulatory coverage requirements that group plans have. A C-section is a pre-existing condition under individual plans. If the mother switches plans, her second C-section will be uncovered. Work that cost into Sauerberg’s plan costs, too.
Comment by Lefty Lefty Tuesday, Mar 11, 08 @ 10:52 am
===group insurance is more expensive than individual coverage===
Until you get sick.
Comment by Rich Miller Tuesday, Mar 11, 08 @ 10:53 am
I haven’t read Sauerberg’s proposal, so I don’t know what’s in it.
However, I will agree that one of the economic consequences of taxing income without taxing benefits is that benefits increase over time in comparison to wages.
This is why many employers have fabulous medical plans that pay for countless things people wouldn’t purchase on their own.
It is also the reason that wages are generally flat in terms of real income growth.
Until both items are taxable events, you will continue see the supply curve for health care move and move and move. Wages will lag by comparison.
You can tax benefits without the sky falling. It happened when Congress removed the deduction for credit card interest. Today, the credit card, for better or worse, is a major tool in personal finance.
Changing the tax status will put wages back on the same level with benefits-—there will be no tax benefit for the firm to choose benefits increase over a wage increase.
If you want to see real wages increase, tax health plans.
Comment by Brian McDaniel Tuesday, Mar 11, 08 @ 11:01 am
another problem with this “plan” - insurance companies will create multiple tiers of coverage - one tier that costs exactly what the tax credit brings you. This may cover emergency room visits (with a massive copay), it will have a massive deductible, and it will cover a small number of primary care visits, and will heavily penalize people for any specialist visits. You’ll have to jump through hoops to find a doctor, too. The upfront cost is low (tax credit amount), but anything further is going to gouge the heck out of you, and people won’t be able to afford to get the care they need. Result would be a massive increase in the number of underinsured people.
Then, for people who can afford more than the tax credit. There will be various levels of coverage, depending on what you can afford, but all of them will be better than the baseline coverage.
The insurance companies will find a way to get that $5k per family into their bottom lines, and that’s how it will happen. So, you might eliminate much of the 40 million uninsured, but you’ll replace them with 60 million massively underinsured.
Comment by jerry 101 Tuesday, Mar 11, 08 @ 12:48 pm
If Sauerberg is truly interested in a free market overhaul of the health insurance industry, he can make a simple start that would revolutionize the entire system: eliminate the Antitrust exemption for the insurance industry and greatly improve the regulation of the industry. Rates would go down, big time.
Comment by chiatty Tuesday, Mar 11, 08 @ 1:02 pm
The problme with most health insurance refomr is it seeks soundbite size answers to a complex problem.
What we need is some system that offers choice in plans to everyone, requires employers and employees to kick in and creates larger risk pools for pricing purposes. We should also have the employer pull the payment out of salaries.
I am not sure the best thing to do, But I know that letting the Govt run it is a bad idea. We need a hybrid of Govt oversight and privatization.
Comment by Ghost Tuesday, Mar 11, 08 @ 1:31 pm
=== We need a hybrid of Govt oversight and privatization.===
Isn’t that the system we have now?
Comment by Rich Miller Tuesday, Mar 11, 08 @ 1:33 pm
“The insurance companies will find a way to get that $5k per family into their bottom lines, and that’s how it will happen. So, you might eliminate much of the 40 million uninsured, but you’ll replace them with 60 million massively underinsured.”
In other words, insurance in name only.
I wish when they propose things like this that they point to countries where it’s already operating and a success.
Comment by Leo Robert Klein Tuesday, Mar 11, 08 @ 2:27 pm
Heh, your remark about he’s not going to win anyway might have increased his chances. LOL!
Comment by Levois Tuesday, Mar 11, 08 @ 3:27 pm
My bad. I run a small business. Individual HSA’s were a cheaper way to go than group insurance. Had I worked at a large company, yes by all means. More than 80% of the work force are covered by group insurance — of course its cheaper. Thanks for catching my errors.
And yes, Rich, insurance premiums do rise when you get sick — ie. you become riskier. I also found out that when you turn 40 they go up to… Whaddya’ going to do???
Comment by Greg Tuesday, Mar 11, 08 @ 3:58 pm
There are many things wrong with the state of health care insurance. Since the majority of people work for small employers we need to address how the price for this is developed.
Two things need to be done.
1.) Develop a plan(s) with competitive rates
2.) Figure out how the ‘needy’ have to be helped
Any discussion of health insurance needs to address the practice of medical underwriting.
Currently each small group is expected to be profitable in and of itself. One element of a potential solution could be to create a super-sized group. e.g. everyone not covered by an employer plan. The costs would then be allocated to hundreds of thousands of subscribers. This would allow for the most competitive price to be developed.
Once the best price is achieved, then tax incentives etc. can be developed so that everyone can be covered.
One bonus would be that if nearly everyone was insured, we could dismantle the incredibly expensive public hospital systems. Some or all that money could be used to pay the premiums for the needy. Subscribers could seek treatment anywhere.
We need to find success stories and work to improve them. So far most proposals start with losing models. That will never succeed.
The insurance experiments in Mass. and Denmark need to be watched in order to see which works better.
Comment by plutocrat03 Tuesday, Mar 11, 08 @ 4:02 pm
plutocrat03 - you nearly described Rod’s health care plan…
Comment by GoBearsss Tuesday, Mar 11, 08 @ 4:40 pm
uhhh…plutocrat…you do realize that you are about one step away from advocating single payor there, right? Correct me if I’m wrong, but I thought you were a republican…
Comment by jerry 101 Wednesday, Mar 12, 08 @ 9:01 am