Sunday, March 29, 2009

The Health Care Come-On

American taxpayers, right now, are a little bit like a young woman who regrets going a bit “too far” with the wrong guy. As we smooth our collective hair and tuck in our collective blouse, backing gently away from the grabby, greedy federal government, we are probably still hoping for a gesture of caring and genuine affection. Perhaps we think it might come in the form of more affordable health care, making up for the mauling we’ve suffered from bailing out the financial industry.

At this moment, I can only tell taxpayers what I’ve told many young female friends: Girls, be sharp and keep your clothes on.

Here are a few tips to at least de-coding the health-care come-ons that are likely to come out of Washington, DC in the coming months:

1. Don’t fall for the phrase “reform the American health-care system.” We don’t have a health-care system in the U.S. We have a health-care marketplace where insurance, medical services, and pharmaceuticals are bought and sold. Government spending, taxation and regulation impact this marketplace profoundly. A politician that boldly promises to reform “the system” needs to explain him or herself a little more fully. Don’t let them get away with this kind of smooth talk. You’re too smart for that. Ask questions, seek specifics on taxation, regulation and spending.

2. Don’t fall for the big spender; he’s going to stick you with the tab, and his plan isn’t necessarily going to work. Much like efforts to improve education, spending more taxpayer dollars has failed to solve our various health-care problems. So listen to four-star-restaurant-level spending proposals as you would listen to a salesman – after all, you’re paying for this date.

3. “I want what’s good for you, baby,” the “consumer.” Addressing you as a consumer is some sweet, caring, empowering talk. But do you really feel like a consumer? Honestly? Have you ever comparative-price-shopped for a doctor, a diagnostic test, or a prescription? Maybe you’d like to become a consumer. Maybe you’d like to buy your own health insurance or your own medical goods and services. And that’s fine. That would be empowering. But don’t believe that they respect your rights as a consumer before they actually let you become one.

One final piece of advice that applies to girlfriends and taxpayers alike: take a second look at the nerds. They can be better for us.

If a geeky politician, for example, starts talking about the “tax treatment of employer-provided health insurance,” your eyes may start to glaze over. But fight it! The tax treatment of health insurance is actually at the root of most of our health-care problems.

Ever wondered why we rely on our employers for insurance? It’s a tax answer. Here’s a short primer so that the nerd talk might more sense:

Employers can buy health insurance with pre-tax dollars, while individuals have to buy it with money that has already had a bite taken out of it by taxes. The difference in price paid is staggering – and flatly unfair.

Okay, so WHY do employers get this break that individuals don’t? Well, it’s an accident of history. During World War II, there were caps on wages and employers had to find different ways to reward and attract employees. They started offering health insurance as part of compensation packages. Congress later thought that practice was quite nice and should be rewarded – and they used their favorite reward-and-punishment tool, the tax code, to show their approval. The rest, as they say, is history.

So if the geek-y politician or pundit on TV talks about the “tax treatment” of employer-sponsored health insurance, listen up. A nerd can be insightful, and that can be very attractive. He is also likely to be a very respectful date. He’ll let you keep your shirt.


Anonymous said...

Individuals need to get a direct rebate for health care premiums, deductibles, and co-pays just like companies do via the tax code & employees do via flexible benefits menu options. People with disability income are truly in need financially & they have to pay all the deductibles, premiums & co-pays themselves without any tax benefit. What's fair about that? Good topic for discussion.

Anonymous said...

The distortions in the health care market created by the tax code and other government interventions are really stunning when you stop to think about it.

I recently heard someone comparing auto insurance and health insurance. The comment, if I recall, was that if auto insurance were like health insurance, we would expect to have a $10 co-pay for every oil change, repair, car wash, etc.

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