Tuesday, September 8, 2009

(A little) more detail

on the Senate Finance committee proposal.....doesn't sound like a straight cap of the tax exclusion of employer paid premiums....which would be removing a benefit (tax free income) from people like me who get large amounts of premiums paid by my employer. Sounds like an attempt to say the tax/fee is on the insurance company....but the bottom line effect should be the same....getting rid of people with very expansive insurance coverage, with definition of very expansive not yet clear (and least to me). I think capping this tax free nature of how private insurance now works is best approach, since it should have some cost control effect over time...basically people who are over-insured (and therefore overuse) will be less so. I would prefer to keep it explicit and describe it as such....but still need to read it all.

Mean family premiums are around $12,5000 and individual around $5,000 and a joint committee on taxation late last year said capping tax exclusion at mean value (meaning employer could pay premium for more expansive policy, but contributions by employer over the mean value of a policy would be taxable as income) would save $450 Billion over 10, and this article says entire plan is $800 Billion over 10, totally offset, meaning cuts identified to balance new spending. So, probably something along these lines. Most likely the fuller details will be emerging later today. The fees on insurance companies based on market share I think are mostly symbolic....raising $6 Billion over 10 years is like whizzing off the end of the pier into the ocean....Sorry so cryptic....off to teach my class....

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