I disagree with the Wall Street Journal's analysis for two main reasons:
1. The article includes this statement: "It is true that many may no longer get their insurance through their employer, but they will be given the resources to purchase insurance on their own." But take a closer look at the math. Let's assume that insurance for my family costs about $14K a year (the same figure the WSJ article uses). If my employer chooses to drop its health insurance benefit, then I end up $9K poorer (I get a $5K credit to buy a $14K policy). The fact that my $5K credit is more than the $4K tax deduction my employer used to get is little consolation to me.
2. The article ignores the fact that buying individual/family insurance in a "nongroup" market is a lot different from employer-provided, "group-based" insurance. In a group policy (the employer pays a somewhat flat rate to insure a group of people), the risk of any individual having unexpected health problems is spread across the entire group. In effect, the healthy people in the group help reduce everyone's costs. In an individual market, you're on your own. If an insurer deems you to be higher risk, then you'll have to pay a lot more for coverage. There's no group to help apportion the risk and related cost.
Companies MAY cancel their health coverage for their employees. Generally this does not go over well with the employees (Even Michael Scott knew this and dished the job to Dwight).
Younger workers will find it in their best interest to enter into private personal insurance at a much lower cost, recieving the tax rebate to their boon. This would leave older employees stuck with company insurance, further raising their costs, which may entice companies to drop insurance all together, especially as we are going through economic turbulence.
However, I believe companies for the most part will not abandon their employees, and will continue to provide insurance, although this MAY come at a higher price for unhealthier individuals if healthy young individuals leave.
The target of the tax rebate, however, are the millions of uninsured indiduals. This provides benefit for the lower income individuals to seek out insurance.
Insured individuals are paying for uninsured whether they realize it or not. SLU Hospital currently treats 40 to 50 percent of uninsured individuals. The hospital looses money, yet Tenet Care reclaims the loss at St. Johns, a hospital in a much wealthier area of STL.
The tax rebate would allow the government to help those that are willing to help themselves. And perhaps by doing this, lower the cost of our own insurance.
Unfortunately medical care costs money. For young and healthy, it costs less. For the old and sick, it costs more. Unless we agree to government mandated redistribution of wealth this will always be so.
Brrr. Russia tried that. It is pretty cold there right now.
More food for thought: http://www.forbes.com/opinions/2008/10/28/obama-health-care-oped-cx_sg_1028gottlieb.html
I asked the HR Director of my own company what he thought the impact of McCain's plan would be. He thought it would mean that our company would give up health benefits. For me, losing health benefits because of McCain's plan isn't just a theoretical possibility; it's a probable outcome.
I disagree that the target of McCain's plan is to cover the millions of uninsured. His primary goal is to reduce the cost of health care. That was even the WSJ article.
I think that is a worthy goal, but McCain's plan comes with too much risk and disruption. And I don't think it's very effective. The two plans cost about the same ($1.3 billion for McCain, $1.6 billion for Obama) yet Obama's would cover 3 to 5 times more uninsured Americans than McCain's would.
The Forbes article argues that Obama's plan is expensive and he won't be able to afford it in this economy. But that goes both ways. The same should be said of McCain's plan, too.
Right, I didn't say to 'cover.' I said that they could seek out insurance with the benefit. It would make health care affordable to them.
And I guess I could argue the 'too much disruption' point that you made about McCain's plan. Because in my opinion Obama's plan carries way more of a disruption factor.
4 comments:
I disagree with the Wall Street Journal's analysis for two main reasons:
1. The article includes this statement: "It is true that many may no longer get their insurance through their employer, but they will be given the resources to purchase insurance on their own." But take a closer look at the math. Let's assume that insurance for my family costs about $14K a year (the same figure the WSJ article uses). If my employer chooses to drop its health insurance benefit, then I end up $9K poorer (I get a $5K credit to buy a $14K policy). The fact that my $5K credit is more than the $4K tax deduction my employer used to get is little consolation to me.
2. The article ignores the fact that buying individual/family insurance in a "nongroup" market is a lot different from employer-provided, "group-based" insurance. In a group policy (the employer pays a somewhat flat rate to insure a group of people), the risk of any individual having unexpected health problems is spread across the entire group. In effect, the healthy people in the group help reduce everyone's costs. In an individual market, you're on your own. If an insurer deems you to be higher risk, then you'll have to pay a lot more for coverage. There's no group to help apportion the risk and related cost.
Follow-up:
Both are valid points.
Companies MAY cancel their health coverage for their employees. Generally this does not go over well with the employees (Even Michael Scott knew this and dished the job to Dwight).
Younger workers will find it in their best interest to enter into private personal insurance at a much lower cost, recieving the tax rebate to their boon. This would leave older employees stuck with company insurance, further raising their costs, which may entice companies to drop insurance all together, especially as we are going through economic turbulence.
However, I believe companies for the most part will not abandon their employees, and will continue to provide insurance, although this MAY come at a higher price for unhealthier individuals if healthy young individuals leave.
The target of the tax rebate, however, are the millions of uninsured indiduals. This provides benefit for the lower income individuals to seek out insurance.
Insured individuals are paying for uninsured whether they realize it or not. SLU Hospital currently treats 40 to 50 percent of uninsured individuals. The hospital looses money, yet Tenet Care reclaims the loss at St. Johns, a hospital in a much wealthier area of STL.
The tax rebate would allow the government to help those that are willing to help themselves. And perhaps by doing this, lower the cost of our own insurance.
Unfortunately medical care costs money. For young and healthy, it costs less. For the old and sick, it costs more. Unless we agree to government mandated redistribution of wealth this will always be so.
Brrr. Russia tried that. It is pretty cold there right now.
More food for thought:
http://www.forbes.com/opinions/2008/10/28/obama-health-care-oped-cx_sg_1028gottlieb.html
I asked the HR Director of my own company what he thought the impact of McCain's plan would be. He thought it would mean that our company would give up health benefits. For me, losing health benefits because of McCain's plan isn't just a theoretical possibility; it's a probable outcome.
I disagree that the target of McCain's plan is to cover the millions of uninsured. His primary goal is to reduce the cost of health care. That was even the WSJ article.
I think that is a worthy goal, but McCain's plan comes with too much risk and disruption. And I don't think it's very effective. The two plans cost about the same ($1.3 billion for McCain, $1.6 billion for Obama) yet Obama's would cover 3 to 5 times more uninsured Americans than McCain's would.
The Forbes article argues that Obama's plan is expensive and he won't be able to afford it in this economy. But that goes both ways. The same should be said of McCain's plan, too.
Right, I didn't say to 'cover.' I said that they could seek out insurance with the benefit. It would make health care affordable to them.
And I guess I could argue the 'too much disruption' point that you made about McCain's plan. Because in my opinion Obama's plan carries way more of a disruption factor.
Post a Comment