Efforts to change our health insurance system are politically charged. Proposals to change coverage plans are met with resistance by both political parties. The Republicans failed to utilize their position while in control of the House and Senate. Now that the Democrats are in control they are playing the election year waiting game. Without tax reform, health care reform is doomed. Republicans fight for tax reform and Democrats fight employer health care reform.
Employer paid plans allows the premiums to be paid with pretaxed dollars. The system is some sixty plus years old. It initially was designed during WWII. Companies could not afford pay raises, but could offer employee incentives. $1000 taxed income equals just $600. But pretaxed $1000 insurance premiums are worth just that, $1000. After the war, the IRS did not reverse this ruling. Thus today we have a system that covers many nonessential benefits with increases in co-pay and rising deductibles.
The current plan and tax code if continued will create greater health care inflation. Americans do not economize when it comes to health care. They expect treatments that are not medically necessary. They even choose unnecessary emergency care, life flight or ambulance transport, because it is more convenient or their insurance will pay for it. Their doctors fear lawsuits if they fail to order requested procedures.
How long will wealthy Americans benefit at the expense of the poor? A private purchased plan with fixed tax credit for single and joint filers and a company purchased plan that taxes regular income would add an estimated $200 billion to the treasury each year. It would equalize and make insurance affordable for many and increase taxes or insurance cost to higher income brackets.
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