Tuesday, May 19, 2009

Wrong On So Many Levels

[Welcome Insurance Forums readers!]

PresBO want's to change health care (but what he really wants is to change the way health care is funded) and Congress is eager to play fetch. But the way they are going about it is wrong in so many ways.

We have touched on a few issues already, but the WSJ Health Blog summarizes some we have touched on an more in a concise manner.

In addition to taxing employer provided health insurance, tobacco and soda pop, Congress in Medusa like fashion is considering everything fair game to satisfy their gluttony for revenue.

HSA's and FSA's give employees and individuals a CHOICE in the way they spend their health care dollars. When you give your money to the insurance carrier for plans that are loaded up with copay's, the carrier decides how you should spend your money.

Now Congress wants to limit how much you can put in your HSA or FSA because they feel you are sheltering too much income from taxation. They want to limit your choices and penalize you for being an informed consumer. In other words, you are not smart enough to make wise choices and they want to tax as much of your earned income as possible to pay for revamping health care funding.

If you are among the 30% of taxpayers who itemize their deductions, watch out.
People currently can take itemized deductions for qualified expenses exceeding 7.5% of their adjusted gross income. Options include raising the 7.5% floor or eliminating the deduction altogether.
Most who itemize are able to do so because of home ownership and the interest credit against income. But some are able to itemize, at least in part, due to high medical bills relative to their income.

If Congress get's their way, those who have the misfortune of a serious illness or accident and actually pay their bills (rather than stiffing the providers) will be further penalized with excessive taxation.

Talk about kicking someone when they are down . . .

Here is something most folks probably don't know. Many students and government workers don't pay FICA taxes to fund Medicare, Medicaid and Social Security. That free ride may be over.
Current law exempts students employed by a college or university from contributing money for Medicare and Social Security through payroll taxes. Teaching hospitals have applied this exception to medical residents receiving stipends. The proposal would be to narrow the definition of “school” and more clearly describe student employment.

Certain state and local governments do not currently pay payroll taxes for Medicare.
Students are people who are trying to become more productive members of society, earn more and as a result of their effort, pay more taxes than they would without an education. Penalizing a desire to improve your lot in life seems very short sighted.

Not for profit hospitals get tax breaks. The trade off is, they are required to provide a specified level of free care to those who cannot pay.
Hospitals that don’t maintain a minimum level of charitable activity, limit charges to the uninsured, indigent patients and limit aggressive collection actions would be subject to an excise tax.
Many hospitals, particularly those who cater to the poor and uninsured, are in danger of closing their doors. Uncompensated care is a major problem that needs to be addressed from a business perspective . . . something few in Congress understand.

Many of the uninsured are that way by choice, not because they lack the funds to pay for health insurance. When they are sick or injured they go to the charity hospital because they feel they will not be asked to pay for services.

In other words, they feel they are entitled to steal medical services and do so with impunity.

This kind of behavior does not need to be condoned or rewarded. If they have assets to pay for their care those assets should be subject to being seized by the medical providers. Some would have you believe that hospitals are taking a shotgun approach, using Tony Soprano tactics to collect from anyone and everyone.

Nothing could be further from the truth.

They spend a great deal of time and money to locate people with the ability to pay and pretty much ignore those who don't.

Congress has become Jabba the Hut with an insatiable appetite for revenue. This mentality of robbing those who are productive members of society to pay for health care reform is just wrong.
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