The recent boom in health savings account style health plans has lead to some concern that many employees are not utilizing the plans as they are designed to be used. United Healthcare recently made public a study of 212,000 of their HSA customers that shows a few prominent trends in employee usage of health savings accounts.
While there are many tax advantages to contributing money to health savings accounts, many employees are reluctant to do so because they either don’t understand the benefits or they are not willing to put their hard-earned income towards their health expenses before they occur. This can be a problem for many individuals. Health savings accounts are generally paired with high deductible health plans which can mean high out-of-pocket expenses for employees if they have not planned ahead and utilized their HSA.
One easy way to encourage your employees to actually use their health savings accounts is to offer some type of employer contribution, like seed money for the account. The United Healthcare survey showed that 86% of employees opened an HSA when their employer offered a contribution compared to just 27% when their employer did not. United Healthcare’s survey also reported that nearly two-thirds of all employers offering HSA-type accounts to their employees did offer a contribution.
Source
http://blogs.wsj.com/health/2008/09/19/employees-open-hsas-if-their-bosses-kick-in/
Wednesday, September 24, 2008
Monday, September 22, 2008
Tax Deduction Tips
They say there are two things in life that are inevitable: death and taxes. While this is certainly true in our society, there are a few ways that you can avoid giving all of your hard earned cash to the government.
If you currently have a Health Savings Account and you are self-employed, you can use an “above-the-line” deduction to reduce your taxable income by the amount of your total contribution, up to the limits set in place for those contributions. If you have a Health Savings Account through your employer, any contributions made by your employer are taken out before your taxable income. If you make any contributions of your own, they can be taken out with an “above-the-line” deduction up to the total contribution limit.
In addition, any medical expenses you incur more than 7.5% of your adjusted gross income can be deducted from your taxes in a similar manner. The Internal Revenue Service defines medical expenses as any expense used to treat or prevent any mental or physical defect. This is a broad definition, for more details refer to the publication listed in the source of this article. While health, dental, and long-term care insurance premiums are deductible, any expense paid out of a health savings account or Archer medical savings account is not deductible.
While there are many expenses associated with your healthcare that are deductible from your taxes, consult a tax professional before filing your return.
Source
http://www.ustreas.gov/offices/public-affairs/hsa/faq_contributing.shtml
http://www.irs.gov/publications/p502/ar02.html
If you currently have a Health Savings Account and you are self-employed, you can use an “above-the-line” deduction to reduce your taxable income by the amount of your total contribution, up to the limits set in place for those contributions. If you have a Health Savings Account through your employer, any contributions made by your employer are taken out before your taxable income. If you make any contributions of your own, they can be taken out with an “above-the-line” deduction up to the total contribution limit.
In addition, any medical expenses you incur more than 7.5% of your adjusted gross income can be deducted from your taxes in a similar manner. The Internal Revenue Service defines medical expenses as any expense used to treat or prevent any mental or physical defect. This is a broad definition, for more details refer to the publication listed in the source of this article. While health, dental, and long-term care insurance premiums are deductible, any expense paid out of a health savings account or Archer medical savings account is not deductible.
While there are many expenses associated with your healthcare that are deductible from your taxes, consult a tax professional before filing your return.
Source
http://www.ustreas.gov/offices/public-affairs/hsa/faq_contributing.shtml
http://www.irs.gov/publications/p502/ar02.html
Friday, September 19, 2008
State Continuation Tips
Employees and their dependents have the option to continue group coverage for 18 months from the date that they cease to be eligible for coverage under the health benefit plan. Employees are not eligible for continuation under the state law if:
• The employee’s insurance terminated because they failed to pay the appropriate contribution.
• The employee or their dependents requesting continuation are eligible for another group health benefit plan.
• The employee was covered less that three consecutive months prior to termination.
The member must notify the group of the intention to continue coverage and pay the applicable fees within 60 days following the end of eligibility. Upon the receipt of the notice of continuation and applicable fees, Blue Cross Blue Shield of North Carolina will reinstate coverage back to the date eligibility ended. The state law continuation benefits run concurrently and not in addition to any applicable federal continuation rights.
Group continuation under state law will end after 18 months or earlier if:
• The employer ceases to provide health benefit plans to employees
• The continuing person fails to pay the monthly fee
• The continuing person obtains similar coverage under another group plan
If an employee elects North Carolina State Continuation, an Enrollment and Change Form stating this fact must be submitted to the carrier.
• The employee’s insurance terminated because they failed to pay the appropriate contribution.
• The employee or their dependents requesting continuation are eligible for another group health benefit plan.
• The employee was covered less that three consecutive months prior to termination.
The member must notify the group of the intention to continue coverage and pay the applicable fees within 60 days following the end of eligibility. Upon the receipt of the notice of continuation and applicable fees, Blue Cross Blue Shield of North Carolina will reinstate coverage back to the date eligibility ended. The state law continuation benefits run concurrently and not in addition to any applicable federal continuation rights.
Group continuation under state law will end after 18 months or earlier if:
• The employer ceases to provide health benefit plans to employees
• The continuing person fails to pay the monthly fee
• The continuing person obtains similar coverage under another group plan
If an employee elects North Carolina State Continuation, an Enrollment and Change Form stating this fact must be submitted to the carrier.
The Number of Uninsured Americans Is On the Decline
You may have read recently that the United States Census Bureau has reported a decrease in the number of uninsured Americans from 2006 to 2007. Here are a few quick facts to put that statement into perspective.
The number of uninsured children declined from 8.7 million (11.7 percent in 2006 to 8.1 million (11.0 percent) in 2007.
The number of uninsured non-hispanic whites declined from 21.2 million (10.8 percent) in 2006 to 20.5 million (10.4 percent) in 2007.
The number of uninsured blacks remained statistically unchanged at 7.4 million while the percentage declined from 20.5 percent in 2006 to 19.5 percent in 2007.
The number of uninsured hispanics declined from 15.3 million (34.1 percent) in 2006 to 14.8 million (32.1 percent) in 2007.
The number of uninsured children declined from 8.7 million (11.7 percent in 2006 to 8.1 million (11.0 percent) in 2007.
The number of uninsured non-hispanic whites declined from 21.2 million (10.8 percent) in 2006 to 20.5 million (10.4 percent) in 2007.
The number of uninsured blacks remained statistically unchanged at 7.4 million while the percentage declined from 20.5 percent in 2006 to 19.5 percent in 2007.
The number of uninsured hispanics declined from 15.3 million (34.1 percent) in 2006 to 14.8 million (32.1 percent) in 2007.
Growing Your Business
Regardless of industry, everyone has felt the economic slowdown of late, whether they are captains of industry or your everyday small business. Do not get discouraged, there are plenty of things you can do to help keep your business viable during the downturn and prepare your business for success during the upturn that is sure to follow.
Discipline as a Foundation
In a recent article from Entrepreneur Magazine, Carol Tice reports that “discipline developed in a downturn can lay the groundwork for long-term success.” Basically, a slowdown in business will often force you to reexamine your business tactics and develop new ways to generate revenue. If these tactics are retained when the market returns your business will often flourish.
Reexamine Your Business Model
Is your business model still viable? Maybe it is, but often as time goes on your business outgrows your original model. Getting a business of the ground can be a challenging task, and once you have successfully launched your business it is easy to allow your plans to become static, especially once you have a steady cash flow. While you are considering new ways to generate revenue, look in to revamping your business model to target unexplored opportunities.
Diversify Your Marketing
When cash flow is an issue, it may be hard to justify spending money on new marketing projects, but when the economy turns down it is imperative that your company’s name remains in front of both your current and potential customers. Remember, a slow economy has everyone looking for ways to cut their spending, so you need to remind your current customers of the value of your product and let potential customers know that their money will be well spent.
In an article titled “Do the Two-Step” written by John Jantsch we can see an innovative marketing technique that may be useful for small businesses trying to diversify their marketing. “…every business needs leads; they’re the lifeblood of your marketing machine.” Jantsch claims that his “two-step” marketing plan can produce new leads without any cold-calling. His plan is fairly simple. Create a free information product, such as a workshop or newsletter, and make it available to your target market. If you direct all of your marketing efforts at signing up customers for your information product, you will be left with a list of prospects who are interested in your company and your product. “…they’re effectively raising their hand and identifying themselves as being interested,” and “the hardest part of [the] sales job is done.”
Stay Positive
Just because the market is down, it does not mean that your business has to be down as well. In fact, Andy Birol of Birol Growth Consulting says that many niches often pull through a downturn completely unscathed. The secret is to find those niches and use them to your advantage. “Don’t assume demand has vaporized,” he says. “It hasn’t, but the way demand is getting met has changed.”
Source
http://www.entrepreneur.com/magazine/entrepreneur/2008/august/195590.html
http://www.entrepreneur.com/magazine/entrepreneur/2008/august/195720.html
Discipline as a Foundation
In a recent article from Entrepreneur Magazine, Carol Tice reports that “discipline developed in a downturn can lay the groundwork for long-term success.” Basically, a slowdown in business will often force you to reexamine your business tactics and develop new ways to generate revenue. If these tactics are retained when the market returns your business will often flourish.
Reexamine Your Business Model
Is your business model still viable? Maybe it is, but often as time goes on your business outgrows your original model. Getting a business of the ground can be a challenging task, and once you have successfully launched your business it is easy to allow your plans to become static, especially once you have a steady cash flow. While you are considering new ways to generate revenue, look in to revamping your business model to target unexplored opportunities.
Diversify Your Marketing
When cash flow is an issue, it may be hard to justify spending money on new marketing projects, but when the economy turns down it is imperative that your company’s name remains in front of both your current and potential customers. Remember, a slow economy has everyone looking for ways to cut their spending, so you need to remind your current customers of the value of your product and let potential customers know that their money will be well spent.
In an article titled “Do the Two-Step” written by John Jantsch we can see an innovative marketing technique that may be useful for small businesses trying to diversify their marketing. “…every business needs leads; they’re the lifeblood of your marketing machine.” Jantsch claims that his “two-step” marketing plan can produce new leads without any cold-calling. His plan is fairly simple. Create a free information product, such as a workshop or newsletter, and make it available to your target market. If you direct all of your marketing efforts at signing up customers for your information product, you will be left with a list of prospects who are interested in your company and your product. “…they’re effectively raising their hand and identifying themselves as being interested,” and “the hardest part of [the] sales job is done.”
Stay Positive
Just because the market is down, it does not mean that your business has to be down as well. In fact, Andy Birol of Birol Growth Consulting says that many niches often pull through a downturn completely unscathed. The secret is to find those niches and use them to your advantage. “Don’t assume demand has vaporized,” he says. “It hasn’t, but the way demand is getting met has changed.”
Source
http://www.entrepreneur.com/magazine/entrepreneur/2008/august/195590.html
http://www.entrepreneur.com/magazine/entrepreneur/2008/august/195720.html
Health Savings Accounts and You
Health plans including Health Savings Accounts (HSA’s) are among the hottest trends in the group health insurance today. There are many reasons for the explosion of popularity HSA’s have seen since they’re creation in 2003 which we will examine, but first let’s look at the numbers.
The Numbers
In November of 2004 the American Health Insurance Providers (AHIP) reported 438,000 individuals enrolled in HSA-type plans. In January of 2008 AHIP reported 6.1 million individuals covered under HSA-type health plans. That’s nearly a 1400% increase in just three years. In the last year HSA-type plans have made up 27% of the new purchases of health insurance products in the individual market and 31% of the new purchases in the small group market. In fact, small group coverage is the fastest growing market segment for HSA-type plans. This rapid growth shows no signs of diminishing either. The US Treasury Department projects 14 million individuals will be enrolled in HSA-type health plans by the year 2010. So what has caused all of this growth? Let’s take a look at what an HSA-type health plan is and its origins.
What is a HSA?
HSA-Type health plans were created by the Medicare bill signed into law by President Bush on December 8, 2003. They were modeled after Archer Medical Savings Accounts, which were discontinued as of December 31, 2003. An HSA is a special account much like your IRA that is used to pay for qualified medical expenses. By law, HSA’s are paired with High Deductible Health Plans (HDHP’s) that do not cover first dollar medical expenses except in the case of preventative care. This simply means these health plans have no co-pay’s and all benefits offered under the plan are subject to the plan’s deductible. To qualify as a HDHP a health plan must have an individual deductible of at least $1100 and a family deductible of at least $2200. Those values are adjusted each year for inflation. Usually the HDHP that carriers pair with HSA’s are 100% coverage after the deductible, so the maximum out of pocket for the plan is the deductible. Many first dollar coverage plans (i.e. co-pay plans) do not cover 100% of the costs after the deductible is met. Many cover anywhere from 80% all the way down to just 50% of total expenses. When this occurs the insured’s costs are subject to the plan’s maximum out of pocket, which can often be two or three times the deductible.
Am I eligible?
Eligibility for an HSA-type health plan has several requirements. The first is the individual must not be enrolled in Medicare. The individual must also not be able to be claimed as a dependent on someone else’s tax returns. There is no income limit for individuals enrolling in an HSA-type plan. Individuals are also not permitted to have any other health insurance except for specific disease or illness coverage, disability coverage, dental care, vision care, and qualifying long-term care insurance. If an individual meets these requirements then he or she is eligible for HSA-type health insurance.
How do I use my HSA?
As stated above, an HSA is like an IRA for your future medical expenses. The contributions that an individual makes to his or her HSA are tax deductible and the medical expenses paid for from an HSA are tax exempt. Any expense paid from an HSA must meet the criteria for “qualified medical expenses.” These medical expenses include most any expense an individual would incur in the treatment of an ailment, including over-the-counter medicine. For a complete list of qualified expenses, check http://www.irs.gov . If funds from an HSA are used for something other than qualified medical expenses they are then added to an individual’s taxable income and a 10% penalty fee must be paid to the Internal Revenue Service. There are also contribution limits for a HSA, much like an IRA. For 2008, the individual plan limit is $2900 which will increase to $3000 next year and the family plan limit is $5800 which will increase to $5950 next year. Individuals who are between the ages of 55 and 65 are allowed to make additional “catch-up” contributions that amount to $900 for this year and $1000 for 2009.
A few things too keep in mind
Once an individual sets up an HSA its contents are fully vested. There are no “use it or lose it” penalties and changing health plans will not forfeit the funds already in an HSA. The same investment options and limitations used for IRA’s apply to HSA’s. Also, rollovers from other HSA’s or older MSA’s are permitted much like an IRA and they are limited to one per year. Tax-free distributions for qualified medical expenses can be taken for the HSA owner as well as their spouse or dependant even if the spouse or dependant is not covered under the HSA owner’s health plan. And one last thing to keep in mind is that qualified medical expenses do not include other health insurance premiums except for COBRA plans, any health plan an individual uses while receiving unemployment payments, and individuals enrolled in Medicare (however Medicare supplement premiums are not covered).
Interested?
So, if you think an HSA-type plan is something you or your company may be interested in, give us a call and we will go over some options with you and let you know what types of plans have worked well for our other clients.
Resources:
http://www.hsabank.com
This site contains an investment calculator and a comparison tool where you can see if an HSA-type plan will save you money in the long-term.
Source:
http://www.ustreas.gov/offices/public-affairs/hsa/pdf/all-about-HSAs-072208.pdf
http://www.ustreas.gov/offices/public-affairs/hsa/pdf/fact-sheet-dramatic-growth.pdf
http://www.ahipresearch.org/pdfs/2008_HSA_Census.pdf
http://www.irs.gov/pub/irs-pdf/p969.pdf
The Numbers
In November of 2004 the American Health Insurance Providers (AHIP) reported 438,000 individuals enrolled in HSA-type plans. In January of 2008 AHIP reported 6.1 million individuals covered under HSA-type health plans. That’s nearly a 1400% increase in just three years. In the last year HSA-type plans have made up 27% of the new purchases of health insurance products in the individual market and 31% of the new purchases in the small group market. In fact, small group coverage is the fastest growing market segment for HSA-type plans. This rapid growth shows no signs of diminishing either. The US Treasury Department projects 14 million individuals will be enrolled in HSA-type health plans by the year 2010. So what has caused all of this growth? Let’s take a look at what an HSA-type health plan is and its origins.
What is a HSA?
HSA-Type health plans were created by the Medicare bill signed into law by President Bush on December 8, 2003. They were modeled after Archer Medical Savings Accounts, which were discontinued as of December 31, 2003. An HSA is a special account much like your IRA that is used to pay for qualified medical expenses. By law, HSA’s are paired with High Deductible Health Plans (HDHP’s) that do not cover first dollar medical expenses except in the case of preventative care. This simply means these health plans have no co-pay’s and all benefits offered under the plan are subject to the plan’s deductible. To qualify as a HDHP a health plan must have an individual deductible of at least $1100 and a family deductible of at least $2200. Those values are adjusted each year for inflation. Usually the HDHP that carriers pair with HSA’s are 100% coverage after the deductible, so the maximum out of pocket for the plan is the deductible. Many first dollar coverage plans (i.e. co-pay plans) do not cover 100% of the costs after the deductible is met. Many cover anywhere from 80% all the way down to just 50% of total expenses. When this occurs the insured’s costs are subject to the plan’s maximum out of pocket, which can often be two or three times the deductible.
Am I eligible?
Eligibility for an HSA-type health plan has several requirements. The first is the individual must not be enrolled in Medicare. The individual must also not be able to be claimed as a dependent on someone else’s tax returns. There is no income limit for individuals enrolling in an HSA-type plan. Individuals are also not permitted to have any other health insurance except for specific disease or illness coverage, disability coverage, dental care, vision care, and qualifying long-term care insurance. If an individual meets these requirements then he or she is eligible for HSA-type health insurance.
How do I use my HSA?
As stated above, an HSA is like an IRA for your future medical expenses. The contributions that an individual makes to his or her HSA are tax deductible and the medical expenses paid for from an HSA are tax exempt. Any expense paid from an HSA must meet the criteria for “qualified medical expenses.” These medical expenses include most any expense an individual would incur in the treatment of an ailment, including over-the-counter medicine. For a complete list of qualified expenses, check http://www.irs.gov . If funds from an HSA are used for something other than qualified medical expenses they are then added to an individual’s taxable income and a 10% penalty fee must be paid to the Internal Revenue Service. There are also contribution limits for a HSA, much like an IRA. For 2008, the individual plan limit is $2900 which will increase to $3000 next year and the family plan limit is $5800 which will increase to $5950 next year. Individuals who are between the ages of 55 and 65 are allowed to make additional “catch-up” contributions that amount to $900 for this year and $1000 for 2009.
A few things too keep in mind
Once an individual sets up an HSA its contents are fully vested. There are no “use it or lose it” penalties and changing health plans will not forfeit the funds already in an HSA. The same investment options and limitations used for IRA’s apply to HSA’s. Also, rollovers from other HSA’s or older MSA’s are permitted much like an IRA and they are limited to one per year. Tax-free distributions for qualified medical expenses can be taken for the HSA owner as well as their spouse or dependant even if the spouse or dependant is not covered under the HSA owner’s health plan. And one last thing to keep in mind is that qualified medical expenses do not include other health insurance premiums except for COBRA plans, any health plan an individual uses while receiving unemployment payments, and individuals enrolled in Medicare (however Medicare supplement premiums are not covered).
Interested?
So, if you think an HSA-type plan is something you or your company may be interested in, give us a call and we will go over some options with you and let you know what types of plans have worked well for our other clients.
Resources:
http://www.hsabank.com
This site contains an investment calculator and a comparison tool where you can see if an HSA-type plan will save you money in the long-term.
Source:
http://www.ustreas.gov/offices/public-affairs/hsa/pdf/all-about-HSAs-072208.pdf
http://www.ustreas.gov/offices/public-affairs/hsa/pdf/fact-sheet-dramatic-growth.pdf
http://www.ahipresearch.org/pdfs/2008_HSA_Census.pdf
http://www.irs.gov/pub/irs-pdf/p969.pdf
Healthcare and Politics: Where the Candidates Stand
Healthcare is becoming a larger issue with each passing year. As our population ages, more Americans are finding the need for proper health insurance and the costs of that insurance are rising each year as well. In the year 2000, a little over 12% of our population was over the age of 65 and the Administration on Aging (AOA) estimates that by 2030 that number will jump to nearly 20%. Although healthcare has been an issue in every major election for the last twenty years, this next election will likely have a significant impact on the healthcare system here in our country. The next four to eight years will almost certainly see considerable changes, and whoever we elect will be the one initiating those changes. Here at Pinnacle Benefits Group we believe in the merit of an informed electorate, so we have done our best to compile a brief comparison of where the nominated presidential candidates stand on the healthcare issue.
A Quick Comparison
Before we delve into the verbiage of each of the candidates’ stances on healthcare reform, let’s take a quick look at where they stand in layman’s terms.
Barack Obama
Senator Barack Obama (D-IL) has proposed a plan that removes the burden of health insurance from the individual and places it on the federal government. Obama believes that we must have a national healthcare plan with guaranteed eligibility for every American while expanding the scope of Medicaid, creating a national watchdog agency to keep tabs on the private healthcare industry, and forcing businesses to either offer competitive health coverage or contribute to the national healthcare program.
John McCain
Senator John McCain (R-AZ) has proposed a plan that places the responsibility of health insurance in the hands of the individual. McCain believes that we should give tax credits to individuals to allow them to purchase their own health plans while encouraging the expansion of Health Savings Account type health plans.
What They Say
“We now face an opportunity, and an obligation, to turn the page on failed politics of yesterday’s health care debates... My plan begins by covering every American. If you already have health insurance, the only thing that will change for you under this plan is the amount of money you will spend on premiums. That will be less. If you are one of the 45 million Americans who don’t have health insurance, you will have it after this plan becomes law. No one will be turned away because of a preexisting condition or illness.”
- Barack Obama in Iowa City, IA May 29th, 2007
“When families are informed about medical choices, they are more capable of making their own decisions, less likely to choose the most expensive and often unnecessary options, and more satisfied with their choices. We took an important step in this direction with the creation of Health Savings Account, tax-preferred accounts that are used to pay insurance premiums and other heath costs. These accounts put the family in charge of what they pay for. And, as president, I would seek to encourage and expand the benefits of these accounts to more American families…
Americans want a system built so that wherever you go and wherever you work, your health plan goes with you. And there is a very straightforward way to achieve this. Under current law, the federal government gives a tax benefit when employers provide health insurance coverage to American workers and their families… Many workers are perfectly content with this arrangement. Their employer-provided health plans would be largely untouched and unchanged.
But for every American who wanted it, another option would be available: Every year they would receive a tax credit directly, with the same cash value of the credits for employees in big companies, in a small business, or self-employed. You simply choose the insurance provider that suits you best. By mail or online, you would then inform the government of your selection. And the money to help pay for your health care would be sent straight to that insurance provider… It would be yours and your family’s health-care plan, and yours to keep.”
John McCain Tampa, Florida April 29th, 2008
What Does It Mean?
There is a fundamental difference in the healthcare plans proposed by Barack Obama and John McCain. Just one look at the basics of these two plans reveals a fundamental difference in the two candidates. This article is not meant to persuade you to one side of the fence or the other, just to provide you with the knowledge to choose for yourself. So what is the disparity between these plans? Let’s start by taking a look at arguably the most important difference.
Who is going to pay for healthcare insurance? Under Senator Obama’s plan for universal healthcare, the program will be funded by the federal government. He also suggests expanding the scope of Medicaid, which is also a federally funded healthcare program. That being said, there are only two ways the federal government can pay for any program: loans and taxes. His plan shifts the responsibility of health insurance from the individual and private business to the federal government, or in other words the tax payers.
Senator McCain proposes giving individuals even greater responsibility when it comes to their healthcare plan. He suggests encouraging the expansion of Health Savings Accounts as well as giving families a tax credit to be applied to paying for health insurance. The majority of the financial burden for Senator McCain’s plan would remain on the individual, but the federal government would take on some of the burden in the form of a tax credit. The addition of this credit to our current tax code without any other changes would obviously require and increase in taxes or a loan, so this plan is not without cost to the tax payers, however it should be significantly less than the cost of Senator Obama’s plan.
Once we get past the responsibility aspect of the issue, there is still some disparity in the plans offered by the two candidates. Senator Obama plans to continue to require businesses to offer benefits, or pay what amounts to a fee to the federal government to help offset the costs of the universal healthcare program (although small businesses under a certain size will be exempt). Senator McCain plans to shift the burden of healthcare insurance off of the employers as well. He believe that it is necessary to allow individuals to own their own healthcare plan, which allows them to take it from job to job without ever experiencing a lapse in coverage or changing benefits. This aspect of the issue obviously holds some importance for business owners across the country.
Where Can I Find Out More?
If you’d like to find out more about the contents of this article, check out the candidates’ websites, which can be found at the bottom of the article or take a look at any of the numerous candidate comparison websites available on the web.
Source
http://www.barackobama.com
http://www.johnmccain.com
http://www.aoa.gov/prof/statistics/online_stat_data/AgePop2050.aspx
A Quick Comparison
Before we delve into the verbiage of each of the candidates’ stances on healthcare reform, let’s take a quick look at where they stand in layman’s terms.
Barack Obama
Senator Barack Obama (D-IL) has proposed a plan that removes the burden of health insurance from the individual and places it on the federal government. Obama believes that we must have a national healthcare plan with guaranteed eligibility for every American while expanding the scope of Medicaid, creating a national watchdog agency to keep tabs on the private healthcare industry, and forcing businesses to either offer competitive health coverage or contribute to the national healthcare program.
John McCain
Senator John McCain (R-AZ) has proposed a plan that places the responsibility of health insurance in the hands of the individual. McCain believes that we should give tax credits to individuals to allow them to purchase their own health plans while encouraging the expansion of Health Savings Account type health plans.
What They Say
“We now face an opportunity, and an obligation, to turn the page on failed politics of yesterday’s health care debates... My plan begins by covering every American. If you already have health insurance, the only thing that will change for you under this plan is the amount of money you will spend on premiums. That will be less. If you are one of the 45 million Americans who don’t have health insurance, you will have it after this plan becomes law. No one will be turned away because of a preexisting condition or illness.”
- Barack Obama in Iowa City, IA May 29th, 2007
“When families are informed about medical choices, they are more capable of making their own decisions, less likely to choose the most expensive and often unnecessary options, and more satisfied with their choices. We took an important step in this direction with the creation of Health Savings Account, tax-preferred accounts that are used to pay insurance premiums and other heath costs. These accounts put the family in charge of what they pay for. And, as president, I would seek to encourage and expand the benefits of these accounts to more American families…
Americans want a system built so that wherever you go and wherever you work, your health plan goes with you. And there is a very straightforward way to achieve this. Under current law, the federal government gives a tax benefit when employers provide health insurance coverage to American workers and their families… Many workers are perfectly content with this arrangement. Their employer-provided health plans would be largely untouched and unchanged.
But for every American who wanted it, another option would be available: Every year they would receive a tax credit directly, with the same cash value of the credits for employees in big companies, in a small business, or self-employed. You simply choose the insurance provider that suits you best. By mail or online, you would then inform the government of your selection. And the money to help pay for your health care would be sent straight to that insurance provider… It would be yours and your family’s health-care plan, and yours to keep.”
John McCain Tampa, Florida April 29th, 2008
What Does It Mean?
There is a fundamental difference in the healthcare plans proposed by Barack Obama and John McCain. Just one look at the basics of these two plans reveals a fundamental difference in the two candidates. This article is not meant to persuade you to one side of the fence or the other, just to provide you with the knowledge to choose for yourself. So what is the disparity between these plans? Let’s start by taking a look at arguably the most important difference.
Who is going to pay for healthcare insurance? Under Senator Obama’s plan for universal healthcare, the program will be funded by the federal government. He also suggests expanding the scope of Medicaid, which is also a federally funded healthcare program. That being said, there are only two ways the federal government can pay for any program: loans and taxes. His plan shifts the responsibility of health insurance from the individual and private business to the federal government, or in other words the tax payers.
Senator McCain proposes giving individuals even greater responsibility when it comes to their healthcare plan. He suggests encouraging the expansion of Health Savings Accounts as well as giving families a tax credit to be applied to paying for health insurance. The majority of the financial burden for Senator McCain’s plan would remain on the individual, but the federal government would take on some of the burden in the form of a tax credit. The addition of this credit to our current tax code without any other changes would obviously require and increase in taxes or a loan, so this plan is not without cost to the tax payers, however it should be significantly less than the cost of Senator Obama’s plan.
Once we get past the responsibility aspect of the issue, there is still some disparity in the plans offered by the two candidates. Senator Obama plans to continue to require businesses to offer benefits, or pay what amounts to a fee to the federal government to help offset the costs of the universal healthcare program (although small businesses under a certain size will be exempt). Senator McCain plans to shift the burden of healthcare insurance off of the employers as well. He believe that it is necessary to allow individuals to own their own healthcare plan, which allows them to take it from job to job without ever experiencing a lapse in coverage or changing benefits. This aspect of the issue obviously holds some importance for business owners across the country.
Where Can I Find Out More?
If you’d like to find out more about the contents of this article, check out the candidates’ websites, which can be found at the bottom of the article or take a look at any of the numerous candidate comparison websites available on the web.
Source
http://www.barackobama.com
http://www.johnmccain.com
http://www.aoa.gov/prof/statistics/online_stat_data/AgePop2050.aspx
Subscribe to:
Posts (Atom)