Healthcare question?

Question

Yesterday I asked a question about why democrats are not for tax credits for healthcare. I got very few educated answers and a lot of feel good answers.

According to the US Health and Human Services Medicaid is available only to people with limited income. You must meet certain requirements in order to be eligible for Medicaid. Medicaid does not pay money to you; instead, it sends payments directly to your health care providers.

Medicare is a health insurance program administered by the United States government, covering people who are either age 65 and over, or who meet other special criteria.

So right now we have government two programs in place to help 1) the lower income and 2) help the retired or elderly.

Can someone give me a rational reason why we should or the owner of a business should not be able to deduct health insurance cost off their taxes?

Also can someone please give me a rational reason why we need universal healthcare? If we our our employer can deduct the cost of this from our taxes, don't we basically get health coverage for all without the added expense of a government run univeral healthcare.

Tort reform is needed in this country big time. Doctors make mistakes because they are human. Doctor friends of mine are getting out of certain areas (such as delivering babies) because insurance costs are so high due to malpractice lawsuits brought on by lawyers like presidental hopeful John Edwards.

If a business can deduct the expense of healthcare, don't you think that this would become a standard benefit in a company?

The cost of a GM car and the healthcare associated for each car sold is a result of poor negotiation with management who in the 50's, 60's, and 70's thought that GM would be on top of the world for years to come. The japanese automakers kicked the US auto industry in the butt during the late 70's and early 80's and GM, Ford, and Chrysler have been playing catch up ever since.

The deduction I am talking about is if the insurance company charged a 15 employee business $15,000 for healthcare, the business company could deduct a straight $15,000 off their annual income taxes.

Co-Pays would still be part of the equation. Why, because nothing is free in life and you need to pay for it.

Answer 1

Actually if you spend enough on health care during the year it can be deducted if you itemize your deductions. I do like the idea of a deduction for any expenses during the year without for one to itemize.

Answer 2

A very small percentage qualifies for Medicaid therefore it basically covers the elderly and the extremely poor. What is forgotten in that mix, and the largest percentage of people who need healthcare, is the middle class and/or the working poor. The rich can afford the outrageous premiums of a top level healthcare program, the average middle class person can not. What a national healthcare program would do would be to cover everyone. That would free up money for individuals and would be a huge boost to employers who would not have to pay into employee health care plans. If the rich still wanted to pay for their own healthcare plans they could. The US is the ONLY large industrialized country in the owrld without a national healthcare plan. Why? Because the US has the best healthcre system in the world? Or is it because the insurance and pharmaceutical companies have bought the right to run our healthcare system with the millions of dollars handed out by lobbyists to the policy and lawmakers in our country? I think it is obvious the later choice.

Answer 3

The cost of providing health insurance is part of the cost of doing business.
As long as your competitors are forced to do the same thing in competing for employees, the cost is represented in the price of goods and services so...you and I pay for it when making a purchase. (This is where the inequity is if a company is using illegal aliens, they don't pay for their insurance and gain an unfair advantage over the competition while we pay for it with the government programs you mentioned even though those employees might be making enough money that disqualifies them.)

Calculating what health care 'costs' must include that expense. It's not just a matter of what comes out of your check. Also, the cost of that administration cuts into a company's profits and is deducted from the bottom line so actually it IS NOT taxed.

Most premiums paid out of your paycheck comes from pre taxed money. To get another deduction would be double dipping the government. You can't get a tax deduction on money you weren't taxed on in the first place.

Edit: You already are entitled to a tax deduction for all medical costs you pay beyond what your insurance covers.
Trust me, you don't want to be one of those people. They are so sick, they are on the verge of death and taxes are the least of their worries.

Answer 4

Tax credits for healthcare are fine, but they only put a dent in the problem. They might encourage some employers to expand coverage, but not all. And it wouldn't help the unemployed or the self-employed. And plenty of employers who already provide coverage would get a free tax break for something they provide anyway - that's alot of cost for not much gain.

Sure, we have Medicare and Medicaid - but we still have 40 million Americans without health insurance. Obviously they aren't fixing the problem.

Answer 5

I'm not sure if you are aware of this, but companies CAN deduct health care expenses from their federal income taxes. And of course, those plans are often very lavish and we the consumers subsidize them. Of course, even with the deductions small businesses typically cannot afford them.

Cost savings in health care is best achieved by a) eliminating overhead which is a unique product of our private system (universal countries pay virtually nothing in overhead, we pay about 30%) and b) having fewer insurance providers who can negotiate prices in bulk (similar to Medicare). This is why we need a universal system.

The average yearly premium for health care is around $11000. Some Republicans are proposing a $15000 deduction for health care costs (not a credit). Of course, the deduction for a typical family with $15K would come out to around $4500, not nearly enough to actually be able to afford the $11000 premium. It would do nothing to give additional health care to people who don't already have it.

Answer 6

Well, deducting it off your taxes is only a percentage of the cost. If your in the 24% tax braket, it does little to save you money, but you are insured. As far as medicaid, it is fraught with fraud. There are a lot of people collecting medicaid, that have been diagnosed with disorders, that shall we say are suspect. Bi-polar and Manic Depression are two of the biggest, and these people are physcally fit to do work, yet sit home and collect government handouts. I get depressed every year on April 15th, but I don't go to a doctor to get syraquil on the taxpayers dime! Nationalized Health care is a bad idea, and bad ideas don't get better with time.

Answer 7

Well, two points--first, deducting health insurance off taxes means that the government isn't going to get that tax revenue--and will have to raise taxes somewhere else to make up the difference. In short, such "tax credits" amount to transferring the cost of health care to the taxpayers--only done so in a way that dresses it up in political smoke and mirrors.

For example--suppose employers can deduct up to $1500 per covered employee--and that covers 100 million workers (about 2/3 of the US workforce. That's far from universal coverage--but the annual total cuts tax revenues $150 billion. That money is going to have to be made up somewhere--and ultimately that means from taxpaye. And it does not address the needs of millions who are not employed or work seasonally or part time,etc.

Second--we (everyone) needs to start defining what we mean by "universal health care." The right-wing equates it with socialized medicine, other people are really talking about simply making the existing a little less of a mess, other s are talking about wholesale reform, etc.. To me, the term means that medical care is accessible to all-or at least to as many as we can manage. Whether that means it's done through the private sector or via federal or state programsis should not be confused with WHAT health care for everyone is.
We do need universal health care (In the sense I jsut stated). Quite aside from humanitarian motives, economically it is crucial. Healthy people produce more, and ultimately, a well administered system reduces health care costs through health education and preventative medicine. But to restore (near) universal health care to the US s going to take drastic reforms--not the kind of papering over the problems a "tax credit" would do. I DO NOT whant to see socialized medicine in this country--the best system is almost certainly a mix of publice and private (with emphasis on the private). But--as things stand, we're headed for what will amount to socialized medicine--but with delivery of services in the hand of special interests--the worst of both worlds.

Answer 8

1. Because not everyone is eligible for Medicaid or Medicare.

2. Not everyone has health insurance available through their job.

This is what you call the "working poor" that fall in between the cracks.

As for the deduction, well, there are a lot of issues with that. You give good perks to keep good people. Should you get a deduction for paying people well too?

Answer 9

Federal Goverment already run a lot of the Healthcare. I do not see healthcare as an entitlement. I would have to check but I think healthcare is deductable on your income tax. Goverment should permit withdrawals from 401K plans for healthcare (without penalty).

Answer 10

We were doing our budget yesterday. Out of 100 million dollar budget we were spending over 35 million on benefits. The most expensive part of a GM car is the benefits spent on employees. An interesting benefit of national health care could easily be a reduction in the costs of goods.

The money is all ready taken from our pockets in terms of copays and so on. The money would simply move brackets.

We are also third world in terms of our infant mortality rates. We are equal with Mongolia. Shouldn't we not have the lowest infant mortality rates in the world if we truly did have the best medicine/access.