Americans Are Making A Big Mistake About Healthcare

[summer]

Can't c/p

www.vox.com/2015/3/1/8125785/insurance-subsidy-poll

[MrsAxilla]

Americans are making a big mistake about health care

If you want to understand the politics of health care in the United States, you really need to understand this finding from a recent Economist/YouGov poll that shows why it's so difficult for wonky ideas — of either a left-wing or right-wing slant — to gain much toehold with the American people.



(Joss Fong/Vox)

The way people in the policy community see it, this is totally backwards. Almost everyone who has health insurance in the United States gets help from the government to afford it. For the elderly, that's Medicare. For the disabled and the poor, that's Medicaid. For full-time workers it's the tax subsidy for employer-provided health insurance.

Some of what you see in this poll is a simple misunderstanding — older Americans either don't know what Medicare is or mistakenly believe they have "paid for" their benefits with earlier taxes.

But Americans who get insurance from their jobs are also benefitting from a massive government program. A program whose existence is hidden from sight but is nonetheless quite real and substantial.

How job-based health insurance is subsidized

The way this works is that when your boss pays you money, you have to pay income taxes on it. When your boss pays you in health insurance, you do not have to pay income taxes on it. That makes it efficient for bosses to pay employees, in part, by buying health insurance for them.

But — importantly — this health insurance is regulated.

The boss can't buy insurance just for the younger and healthier employees, he can't charge women more for it than men, and he has to offer it to all new hires regardless of their health history. This is the foundation of the American health care system. The regulations mean that job-based insurance is available to workers who have substantial health care needs and would be uninsurable on a free market. And the tax subsidy is sufficiently generous that participating in the system makes sense even for workers with lesser health care needs.

The subsidy here is subtle — part of what Suzanne Mettler calls the Submerged State — but without it health insurance as we know it simply wouldn't exist.

A target for reform

This system works great for people who work for big companies because big companies provide large risk pools. It does not work well for the self-employed, for small businesses, for contractors, for part-time workers, for people who get laid off, or for entrepreneurs because an individual or a small group can't spread the cost of caring for an individual sick person across a large group of mostly healthy people.

One of the few things that policy experts of all kinds can agree on is that it's arbitrary and unfair to provide this subsidy to employees of large companies while other workers go unsubsidized and uncovered.

The Affordable Care Act seeks to address this unfairness by creating a parallel system of subsidies from people who don't get job-based care while paring back the tax subsidy for the most expensive job-based plans.

Most conservative plans — from the one John McCain ran on in 2008 to the one Richard Burr, Orrin Hatch, and Fred Upton are pushing in the current congress — level the playing field by eliminating (in McCain's case) or curtailing (in the current bill's case) the subsidy for job-based plans. Avik Roy, a leading conservative health wonk, calls this subsidy the "original sin" of American health care policy.

But as far as the public is concerned, liberals and conservatives might as well be arguing about what to do with the Loch Ness Monster. A huge share of the American health policy debate is a debate about what to do about a subsidy that the public doesn't realize exists.

[ttt]

LOFL that 93% of Americans 65+ don't think they're getting a government subsidy for their health insurance. L. O. F. L.

[MrsAxilla]

I can't get the graph in the article to copy. But I'm in shock that 93% of people over age 65 don't think the government subsidizes their health insurance. What?!?

[Deleted]

I'm trying to imagine the head explosions if people realize that even non-subsidized health plans (ala via health exchanges) are still in fact subsidized.

[IIOY]

Mar 1, 2015 16:47:58 GMT -5 asdfjkl said:

Mar 1, 2015 16:05:34 GMT -5 ttt said:

LOFL that 93% of Americans 65+ don't think they're getting a government subsidy for their health insurance. L. O. F. L.

IIOY

[emisi]

Mar 1, 2015 16:07:22 GMT -5 MrsAxilla said:

I can't get the graph in the article to copy. But I'm in shock that 93% of people over age 65 don't think the government subsidizes their health insurance. What?!?

My guess is that they believe "they paid for it" through their taxes while they were working.  So it's not a HANDOUT, it's OWED to them.

[miniroller]

Mar 1, 2015 19:35:39 GMT -5 emisi said:

Mar 1, 2015 16:07:22 GMT -5 MrsAxilla said:

I can't get the graph in the article to copy. But I'm in shock that 93% of people over age 65 don't think the government subsidizes their health insurance. What?!?

My guess is that they believe "they paid for it" through their taxes while they were working.  So it's not a HANDOUT, it's OWED to them.

Disgustingly TRUE

[sandsonik]

Mar 1, 2015 16:07:22 GMT -5 MrsAxilla said:

I can't get the graph in the article to copy. But I'm in shock that 93% of people over age 65 don't think the government subsidizes their health insurance. What?!?

I think it's the wording.  "Do you receive a government subsidy to help you pay for your healthcare?" makes it sound like "do you get a check from the government to make the payment"

[aurora]

Mar 1, 2015 20:05:55 GMT -5 sandsonik said:

Mar 1, 2015 16:07:22 GMT -5 MrsAxilla said:

I can't get the graph in the article to copy. But I'm in shock that 93% of people over age 65 don't think the government subsidizes their health insurance. What?!?

I think it's the wording.  "Do you receive a government subsidy to help you pay for your healthcare?" makes it sound like "do you get a check from the government to make the payment"

I actually agree that this wording is probably part of the confusion.

For younger people who get health insurance through their jobs, I can definitely see how it's not obvious that there is a tax subsidy on the premiums paid by employer.

[UMaineTeach]

Mar 1, 2015 20:18:02 GMT -5 aurora said:

Mar 1, 2015 20:05:55 GMT -5 sandsonik said:

I think it's the wording.  "Do you receive a government subsidy to help you pay for your healthcare?" makes it sound like "do you get a check from the government to make the payment"

I actually agree that this wording is probably part of the confusion.

For younger people who get health insurance through their jobs, I can definitely see how it's not obvious that there is a tax subsidy on the premiums paid by employer.

I need someone to break this down for me

How job-based health insurance is subsidized

The way this works is that when your boss pays you money, you have to pay income taxes on it. When your boss pays you in health insurance, you do not have to pay income taxes on it. That makes it efficient for bosses to pay employees, in part, by buying health insurance for them.

But — importantly — this health insurance is regulated.

The boss can't buy insurance just for the younger and healthier employees, he can't charge women more for it than men, and he has to offer it to all new hires regardless of their health history. This is the foundation of the American health care system. The regulations mean that job-based insurance is available to workers who have substantial health care needs and would be uninsurable on a free market. And the tax subsidy is sufficiently generous that participating in the system makes sense even for workers with lesser health care needs.

The subsidy here is subtle — part of what Suzanne Mettler calls the Submerged State — but without it health insurance as we know it simply wouldn't exist.

I don't understand where the direct government money comes in to the picture.
Not taxing something isn't the same as offering a subsidy
Regulating an industry is also not the same as a subsidy

If I was polled I would say yes, the government subsidizes my healthcare b/c I work for a public school, but I would say that H's insurance is subsidized by his employer, who is not the government (however his company did recently do some work for the state, so the money paid by the state for the report goes into the general fund that pays for healthcare, but that feels like splitting hairs)

[ttt]

Mar 1, 2015 20:40:25 GMT -5 UMaineTeach said:

Mar 1, 2015 20:18:02 GMT -5 aurora said:

I actually agree that this wording is probably part of the confusion.

For younger people who get health insurance through their jobs, I can definitely see how it's not obvious that there is a tax subsidy on the premiums paid by employer.

I need someone to break this down for me

How job-based health insurance is subsidized

The way this works is that when your boss pays you money, you have to pay income taxes on it. When your boss pays you in health insurance, you do not have to pay income taxes on it. That makes it efficient for bosses to pay employees, in part, by buying health insurance for them.

But — importantly — this health insurance is regulated.

The boss can't buy insurance just for the younger and healthier employees, he can't charge women more for it than men, and he has to offer it to all new hires regardless of their health history. This is the foundation of the American health care system. The regulations mean that job-based insurance is available to workers who have substantial health care needs and would be uninsurable on a free market. And the tax subsidy is sufficiently generous that participating in the system makes sense even for workers with lesser health care needs.

The subsidy here is subtle — part of what Suzanne Mettler calls the Submerged State — but without it health insurance as we know it simply wouldn't exist.

I don't understand where the direct government money comes in to the picture.
Not taxing something isn't the same as offering a subsidy
Regulating an industry is also not the same as a subsidy

If I was polled I would say yes, the government subsidizes my healthcare b/c I work for a public school, but I would say that H's insurance is subsidized by his employer, who is not the government (however his company did recently do some work for the state, so the money paid by the state for the report goes into the general fund that pays for healthcare, but that feels like splitting hairs)

Tax breaks or exemptions are indeed subsidies. Subsidies don't necessarily have to be direct cash transfers.

[flgirl]

Mar 1, 2015 22:39:08 GMT -5 asdfjkl said:

Mar 1, 2015 20:05:55 GMT -5 sandsonik said:

I think it's the wording.  "Do you receive a government subsidy to help you pay for your healthcare?" makes it sound like "do you get a check from the government to make the payment"

I find it hard to believe that the oldz don't understand what a government subsidy is in ANY form since, as a block, they manage to vote against subsidies of any kind supporting any program for anyone except themselves.

My mother doesn't get this at all. She really thinks all of her medicare is covered by the payments she made over the course of her life. I think she probably used that up in the first year or two of being on Medicare.

[flgirl]

Mar 1, 2015 21:41:10 GMT -5 ttt said:

Mar 1, 2015 20:40:25 GMT -5 UMaineTeach said:

I need someone to break this down for me

I don't understand where the direct government money comes in to the picture.
Not taxing something isn't the same as offering a subsidy
Regulating an industry is also not the same as a subsidy

If I was polled I would say yes, the government subsidizes my healthcare b/c I work for a public school, but I would say that H's insurance is subsidized by his employer, who is not the government (however his company did recently do some work for the state, so the money paid by the state for the report goes into the general fund that pays for healthcare, but that feels like splitting hairs)

Tax breaks or exemptions are indeed subsidies. Subsidies don't necessarily have to be direct cash transfers.

There is a different way to think about that though. Taxes shouldn't be a given. The fact that we think of tax breaks as a subsidy reveals how accepting we are of income based taxes. Should we really think that our income isn't our own?

[ttt]

Mar 1, 2015 23:16:12 GMT -5 flgirl said:

Mar 1, 2015 21:41:10 GMT -5 ttt said:

Tax breaks or exemptions are indeed subsidies. Subsidies don't necessarily have to be direct cash transfers.

There is a different way to think about that though. Taxes shouldn't be a given. The fact that we think of tax breaks as a subsidy reveals how accepting we are of income based taxes. Should we really think that our income isn't our own?

Should we accept that in a society with a government, we have to pay taxes? Yes, I do think that is a given. I don't know how you can run a society where nobody pays any taxes. 

At any rate, the definition of a government subsidy is a benefit given by the government to a particular group or individual, usually in the form of a cash payment or tax reduction. So whether you agree with the concept of taxes or not, a tax break does fit the definition of a subsidy. 

[ttt]

www.forbes.com/sites/markhendrickson/2013/03/07/did-you-really-pay-for-your-medicare-benefits/

Time after time during Election Year 2012, seniors and near-seniors reacted to the slightest mention of Medicare reform with indignation and the emphatic insistence, “Don’t you dare touch Medicare; I’ve paid for it!” There is only one problem with that statement: In a mathematical sense, it isn’t true.

The amount that American workers have paid and are paying into Medicare isn’t enough to fund all the benefits that are being paid out to seniors under Medicare. The trustees of Medicare have stated that the promises they have made exceed their projected revenues by tens of trillions of dollars. Senator Tom Coburn (a physician in private life) has estimated that the average American couple contributes approximately $110,000 to Medicare over their working careers and receives over $330,000 of Medicare benefits. On Feb. 20, USA Today cited Urban Institute data pegging those same figures at $88,000 and $387,000, respectively.




Freaking olds, man.

[rugbywife]

Mar 1, 2015 23:16:12 GMT -5 flgirl said:

Mar 1, 2015 21:41:10 GMT -5 ttt said:

Tax breaks or exemptions are indeed subsidies. Subsidies don't necessarily have to be direct cash transfers.

There is a different way to think about that though. Taxes shouldn't be a given. The fact that we think of tax breaks as a subsidy reveals how accepting we are of income based taxes. Should we really think that our income isn't our own?

Yes, I genuinely don't look at the taxes I pay as my money. I see it as my contribution to living within a society and benefitting from said society. I am fine that I contribute more than others, others more than me, and some none at all.

[illgetthere]

So this means that everyone in America with taxable income receives some type of government subsidy because everyone has a personal exemption when they file their taxes. That's really how we are supposed to look at it?

Edit: and I guess also those with income that is not taxable since they are not having to pay taxes.

[flgirl]

Mar 2, 2015 11:46:05 GMT -5 illgetthere said:

So this means that everyone in America with taxable income receives some type of government subsidy because everyone has a personal exemption when they file their taxes. That's really how we are supposed to look at it?

Edit: and I guess also those with income that is not taxable since they are not having to pay taxes.

The government would like you to think it is being generous by giving you these "subsidies." So, yes, we are supposed to look at it this way.

[illgetthere]

Mar 2, 2015 8:17:10 GMT -5 rugbywife said:

Mar 1, 2015 23:16:12 GMT -5 flgirl said:

There is a different way to think about that though. Taxes shouldn't be a given. The fact that we think of tax breaks as a subsidy reveals how accepting we are of income based taxes. Should we really think that our income isn't our own?

Yes, I genuinely don't look at the taxes I pay as my money. I see it as my contribution to living within a society and benefitting from said society. I am fine that I contribute more than others, others more than me, and some none at all.

Who's money are you contributing to live in said society if it is not yours?

[andrealynn]

Mar 1, 2015 23:16:12 GMT -5 flgirl said:

Mar 1, 2015 21:41:10 GMT -5 ttt said:

Tax breaks or exemptions are indeed subsidies. Subsidies don't necessarily have to be direct cash transfers.

There is a different way to think about that though. Taxes shouldn't be a given. The fact that we think of tax breaks as a subsidy reveals how accepting we are of income based taxes. Should we really think that our income isn't our own?

You sound more and more like someone that just read Atlas Shrugged.

[UMaineTeach]

Mar 1, 2015 21:41:10 GMT -5 ttt said:

Mar 1, 2015 20:40:25 GMT -5 UMaineTeach said:

I need someone to break this down for me

I don't understand where the direct government money comes in to the picture.
Not taxing something isn't the same as offering a subsidy
Regulating an industry is also not the same as a subsidy

If I was polled I would say yes, the government subsidizes my healthcare b/c I work for a public school, but I would say that H's insurance is subsidized by his employer, who is not the government (however his company did recently do some work for the state, so the money paid by the state for the report goes into the general fund that pays for healthcare, but that feels like splitting hairs)

Tax breaks or exemptions are indeed subsidies. Subsidies don't necessarily have to be direct cash transfers.

I feel like that just because the government hasn't successfully taxed health ins. premiums that that means they are giving us a break, it just means they aren't taxing it.

 I don't consider the no sales tax I pay on bread and milk to be a government subsidy.

[rugbywife]

Mar 2, 2015 12:22:34 GMT -5 illgetthere said:

Mar 2, 2015 8:17:10 GMT -5 rugbywife said:

Yes, I genuinely don't look at the taxes I pay as my money. I see it as my contribution to living within a society and benefitting from said society. I am fine that I contribute more than others, others more than me, and some none at all.

Who's money are you contributing to live in said society if it is not yours?

I don't know how to explain it any differently…yes, I earned the money, but I don't see it as all being due to me, I believe I have a duty to give some of it back to the larger community because communities/societies/civilizations don't exist without people putting back into them. 

[illgetthere]

Mar 2, 2015 21:22:13 GMT -5 rugbywife said:

Mar 2, 2015 12:22:34 GMT -5 illgetthere said:

Who's money are you contributing to live in said society if it is not yours?

I don't know how to explain it any differently…yes, I earned the money, but I don't see it as all being due to me, I believe I have a duty to give some of it back to the larger community because communities/societies/civilizations don't exist without people putting back into them. 

That doesn't mean it's not your money. The money you earn is your money. You then pay some of it in taxes (or contributions)