By using this site, you agree to the Privacy Policy and Terms of Use.
Accept
Health Works CollectiveHealth Works CollectiveHealth Works Collective
  • Health
    • Mental Health
    Health
    Healthcare organizations are operating on slimmer profit margins than ever. One report in August showed that they are even lower than the beginning of the…
    Show More
    Top News
    benefits of using protein powder to build muscles
    Protein Powder for Muscle Mass: Everything You Need to Know
    December 12, 2021
    changes brought on by blockchain in healthcare
    Technology In The Healthcare Industry
    March 28, 2022
    What Does Core Body Temperature Say About Health?
    August 17, 2022
    Latest News
    Grounded Healing: A Natural Ally for Sustainable Healthcare Systems
    May 16, 2025
    Learn how to Renew your Medical Card in West Virginia
    May 16, 2025
    Choosing the Right Supplement Manufacturer for Your Brand
    May 1, 2025
    Engineering Temporary Hospitals for Extreme Weather
    April 24, 2025
  • Policy and Law
    • Global Healthcare
    • Medical Ethics
    Policy and Law
    Get the latest updates about Insurance policies and Laws in the Healthcare industry for different geographical locations.
    Show More
    Top News
    FDA Approves Diabetes Pill
    May 2, 2011
    Patient Gets Drunk on Hand Sanitizer
    June 20, 2011
    Cultivating Health Improvement
    July 20, 2011
    Latest News
    Building Smarter Care Teams: Aligning Roles, Structure, and Clinical Expertise
    May 18, 2025
    The Critical Role of Healthcare in Personal Injury Recovery: A Comprehensive Guide for Victims
    May 14, 2025
    The Backbone of Successful Trials: Clinical Data Management
    April 28, 2025
    Advancing Your Healthcare Career through Education and Specialization
    April 16, 2025
  • Medical Innovations
  • News
  • Wellness
  • Tech
Search
© 2023 HealthWorks Collective. All Rights Reserved.
Reading: Oh No! The Republicans Are Going to Tax Your Health Benefits!
Share
Notification Show More
Font ResizerAa
Health Works CollectiveHealth Works Collective
Font ResizerAa
Search
Follow US
  • About
  • Contact
  • Privacy
© 2023 HealthWorks Collective. All Rights Reserved.
Health Works Collective > Policy & Law > Health Reform > Oh No! The Republicans Are Going to Tax Your Health Benefits!
Health ReformPolicy & LawPublic Health

Oh No! The Republicans Are Going to Tax Your Health Benefits!

John Graham
Last updated: December 28, 2013 10:30 am
John Graham
Share
5 Min Read
republicans and healthcare
SHARE

republicans and healthcareIf even The Wall Street Journal covers reforming the tax code to allow individuals to own their own health insurance in “Republicans Shy Away From Their Own Health Plan” (and it does), we have a big hill to climb before we can eliminate the discrimination agai

republicans and healthcareIf even The Wall Street Journal covers reforming the tax code to allow individuals to own their own health insurance in “Republicans Shy Away From Their Own Health Plan” (and it does), we have a big hill to climb before we can eliminate the discrimination against individually owned health insurance. According to the WSJ, Congressional Republicans are more gun-shy than ever of a reform that would give households tax credits to buy health insurance, instead of biasing the tax code in favor of employer-based benefits.

This risk-aversion is a consequence of the fact that ObamaCare is causing millions of people to lose their health benefits. Although many of these victims have individual policies, many are also insured through their employers. Because President Obama’s guarantee that “if you like your coverage, you can keep it” has been exposed as false, Republicans have been freshly reminded how fearful people are of change.

This has pushed them back into a corner, defending the tax discrimination favoring employer-based benefits and against individual tax credits, according to the WSJ.

More Read

pharmaphorum
What Healthcare Can Learn from the G20 Summit
Staying Competitive – Financing Medical Equipment and Technology in the Global Healthcare Market
8 Tips to Pass Nicotine Test When Getting a Life Insurance
A Guide to Medical Billing Services for Small Practices
Mobile Health Around the Globe: 3D Anatomy Guide From Ireland Helps Medical Students Learn

This is a real shame. Individual tax credits were a feature of Senator John McCain’s 2008 presidential bid, President Bush in 2007, and were proposed as long ago as 1995 by John C. Goodman and Mark V. Pauly.

They should not be that hard to sell. This article makes a couple of very straightforward points, which any reformist politician should be able to transform into good sound bites.

For the average family with employer-based benefits, reform would lead to an increase in taxable income of almost $12,000. (I calculated this from the Kaiser Family Foundation’s 2013 Employer Health Benefits Survey, which reported $16,351 as the average cost of family coverage, of which employees pay $4,565 directly.)

If the family is in the 30% tax bracket, that implies an additional tax liability of $3,600. But proposed family tax credits have been in the range of $5,000-$8,000. As a result, the average family with employer-based benefits would realize an increase in after-tax income.

According to the Congressional Budget Office’s May 2013 estimate, the exclusion of employer-based health benefits (including long-term care premiums) from households’ taxable income will reduce federal tax revenues by $248 billion in 2013. It is, by a huge margin, the largest tax expenditure in the Internal Revenue Code. However, because of our progressive income-tax code, the lion’s share of this will go to the highest earning quintile: The top 20 percent of earners get 34 percent (over $84 billion) of the total value of the tax exclusion. The lowest-earning 20 percent get only 8 percent (about $20 billion) of the benefit.

Let’s imagine there was no Medicare or Medicaid or other health insurance to complicate the analysis. If the government taxed employer-based benefits and distributed the revenue equally to the population, the lower three quintiles would get more money than they currently do, and the top two would get less.

Every quintile would receive $49.6 billion. For the lowest, this would be an increase of 150 percent (almost $30 billion). For the second lowest, the increase would be 43 percent (around $15 billion). For the middle quintile, the increase would be 5 percent (around $2.5 billion). This middle quintile consists of individuals who earn between $38,500 and $55,099; or families of four who earn between $77,000 and $110,200.

Reformist politicians should be able to explain a health-insurance tax reform that clearly benefits the middle class, and most Americans. Now that ObamaCare is on the ropes, the time is ripe to advance, rather than recoil from, such reform.

(image: shutterstock)

Share This Article
Facebook Copy Link Print
Share

Stay Connected

1.5kFollowersLike
4.5kFollowersFollow
2.8kFollowersPin
136kSubscribersSubscribe

Latest News

Do You Grind Your Teeth at Night? Here’s How Night Guards and TMJ Treatments Can Help
Do You Grind Your Teeth at Night? Here’s How Night Guards and TMJ Treatments Can Help
Dental health
May 21, 2025
The Secret To A Confident Smile: Top Tips For Better Teeth
The Secret To A Confident Smile: Top Tips For Better Teeth
Dental health
May 21, 2025
Clinical Expertise
Building Smarter Care Teams: Aligning Roles, Structure, and Clinical Expertise
Health care
May 18, 2025
Grounded Healing: A Natural Ally for Sustainable Healthcare Systems
Grounded Healing: A Natural Ally for Sustainable Healthcare Systems
Health
May 15, 2025

You Might also Like

Bladder Cancer Care in America Gets a Failing Grade

July 12, 2011
cuts-medicare
BusinessFinancePublic Health

Medicare Advantage Cuts Don’t Bite: Health Insurers’ Stocks Rally

February 28, 2014
healthcare costs
Medical Education

Teaching Medical Students About Costs

March 4, 2013

Video:ACO: Summary and Final Analysis of Final Rule

November 2, 2011
Subscribe
Subscribe to our newsletter to get our newest articles instantly!
Follow US
© 2008-2025 HealthWorks Collective. All Rights Reserved.
  • About
  • Contact
  • Privacy
Welcome Back!

Sign in to your account

Username or Email Address
Password

Lost your password?