Should We Tax Health Benefits?
All wage income is subject to federal taxation for both employers and employees. Health care benefits provided by employers, however, go untaxed. The U.S. is the only wealthy nation with such a system deliberately linking insurance to employment and it was government policy, not market forces, that created it.
In the mid-1930s, just 2 million or so people enjoyed employer-provided health benefits. During WWII, the National War Labor Board limited wage increases (to restrict inflation), but allowed companies to offer other perks to attract employees, including tax-free health benefits. With unemployment so low, businesses competed for workers by expanding benefits, entrenching a system that has endured 60+ years (see How the U.S. Health Care System Got So Sick by Jeremy Brecher more of this history).
If the drawbacks of linking health insurance to employment weren’t obvious a year ago, our rising unemployment rate surely has made them so. Yet reversing long-standing government subsidies to businesses and workers for employer-based insurance is a hotly debated topic.
Many workers and unions who enjoy good insurance coverage are united with their employers against taxing these benefits. Others argue we should eliminate or limit the tax breaks and use the revenue to help uninsured and under-insured people get adequate coverage.
The issue is complex — even for those of us immersed in health care reform — and the arguments and advocates don’t align with typical ideological or party splits. An article published today by The New Republic illuminated the debate well. Check out "Tax My Health Benefits. Please." by Jonathan Cohn to learn more.
Who Speaks for Small Business?
The National Federation of Independent Business claims to be "the Voice of Small Business," yet it works against the clear preference and interests of most small business owners when it comes to health insurance reform. NFIB brought this discrepancy to the forefront yesterday when its president held a joint press conference with the leading insurance industry lobby group, declaring their unified positions.
Unmentioned at the event was NFIB’s serious conflict of interest. Our full press release on the topic follows. Read the rest of this entry »
Obama’s Summit Puts Health Reform on Center Stage
March 5, 2009
While the deepening recession cast a large shadow, health care reform was given top billing today as President Obama hosted a health care summit with some 150 invited participants to discuss solutions for our national health care/insurance crisis (Reuters’ analysis of the event here). The event included representatives of a wide range of interest groups, including health insurance industries, medical care, labor and single-issue groups like Health Care for America Now. Even some single payer advocates were invited at the last minute after a threatened protest against their exclusion apparently changed Obama’s mind, according to the Wall St Journal.
The proceedings began with predictable speeches, but participants then broke into smaller group discussions to attempt dialogue on issues of contention, leading to some lively exchanges.
Sen.Ron Wyden (D-OR) triggered one when he proposed taxing health benefits. “In the first year, if you take away some of the tax breaks for affluent folks who have health plans where they can get designer smiles, you could use that money immediately to start expanding coverage,” said Wyden.
Teamsters leader James Hoffa did not approve, responding, “This idea of taxing benefits. That was the McCain idea. That was shot down during the election. … That’s insane. That discourages what’s working.” Read the rest of this entry »
Survey Shows Business Owners Defy Stereotype
MONTANA BUSINESS OWNERS FED UP WITH HEALTH CARE CRISIS
Survey Reveals Overwhelming Support for Public Insurance Option
BOZEMAN, MT.—Businesses for a Healthy Montana today announced the release of "Taking the Pulse of Main Street: Small Businesses, Health Insurance, and Priorities for Reform." The report compiles results from a survey of 1200 business owners nationwide, along with many of their individual stories. Individual breakdowns of results from Montana and nine other states are included.
The nationwide survey on which the report is based shows that small business owners are fed up with being at the mercy of health insurance corporations, strongly support the creation of a quality public insurance alternative, and are willing to contribute to it.
Featuring 1,200 businesses nationwide and 72 in Montana, the report includes surprising results that challenge the conventional wisdom. The business owners were not previously members of the coalition, but contact through door-to-door canvassing. A sampling of the findings: