Not exactly, no. Because in essence, this creates a government subsidy for a portion of the employee’s compensation package.

Think of it this way – if the government were tomorrow to announce that workers in the aerospace industry would not be subject to income tax on their earnings, would that be a subsidy to the aerospace industry? Of course it would.

Say an employer has an option of giving employee X $100K in salary, and $10K in insurance benefits, or $110K in salary. The effect on the employers’ taxes are the same. The effect on the employee is probably around a $3K difference in taxes. Given that compensation is driven by competition, a company providing healthcare for employee X has roughly a 3% advantage versus a company not providing healthcare. This 3% represents a subsidy from the government to the company providing healthcare.

Not the same thing – but the same effect on the rest of us taxpayers who don’t receive either the deduction or a direct subsidy. We have to make up for the revenue, either forfeited or spent.

By that logic all of a businesses employees are paid by the federal government too since they deduct costs of salaries and benefits.

Employee compensation is a business expense. It is not “deducted” – because companies don’t pay corporate taxes on gross revenues – they pay taxes on profits. However, as opposed to salaries paid to employees … employees of companies which provide healthcare do not have to pay income taxes on that portion of their compensation. Thus, it is quite different in tax effect from salaries.

You are pointing to the fact that cost increases are a problem in all these countries we talk about. I agree; this is true as far as I know. You may want to consider that the first thing we must do is to find a way to get our costs much closer to this baseline that is de-facto established by the other countries in our party.

Then we can begin finding ways to beat these other countries on cost and outcomes if we can, and I would imagine we could. The private insurance industry has had about 40 years to contribute towards these objectives. They do not. They do what corporations are supposed to do: they look out for their own self-interest. This is great for shareholders, and bad for ordinary Americans. Very bad in fact.

ltoro, you do not seem to consider for instance sinz’s observation about replacement cost. A system that relies on ability to pay is inflexible in this regard. Health professionals working within the constraints of a universal care system can use it to order the queue to prioritize delivery of care.

It’s not perfect, but it’s far better.

balconesfault, I will also add that no one in the world is providing free healthcare to anyone. Someone is always paying for it. Also, a tax deduction is not the same as an expenditure form the federal government. By that logic all of a businesses employees are paid by the federal government too since they deduct costs of salaries and benefits.

Have a nice day.

And you might note that the two most popular proposals on the Republican side – tort reform, and passing federal law to superceed state law and allow health insurance to be sold nationally – would both require government intervention.

I’m also not following your monopoly thing. How does government give a monopoly to BCBS?

It makes lots of money, yet fails the essential benchmarks of access, affordability, and transportability.

The objective for the health care debate going forward must be to beat competing countries on cost and quality. We are not having that debate yet, but we don’t have very long before we need to.”

Yes, I am definitely missing the point. So, you’re saying that the system we have, which government intervention has created, is not working and it’s the system insurance companies like because it’s making them money, so government must make changes so we can compete against other countries re: quality and cost.

First of all, the government has created a system which gives monopolies to certain companies — I’m sure BCBS loves the current system — however, it doesn’t matter what companies like. In a free market, companies have to compete to get business — this competition improves quality and costs. Sure, once government starts intervening, companies lobby for favor and advantage. The government feeding trough then attracts the worst in business — those who seek favor and advantage — those who are political and know how to play the game. Why do you think that because the current system gives an unfair advantage to certain businesses, an advantage only government can provide, that another government system will be any different? Why not propose free market solutions where all companies compete and the consumer has choices?

And again – it bears repeating on every thread here on this topic.

In the US, we’re already spending more per capita in taxpayer funded healthcare services than any other country in the world.

Per the HHS, we spent 1.04 trillion on publicly funded healthcare in 2007 … that increases to 1.24 trillion if you include in that total the 220 billion annual tax break to corporations for providing insurance. That put us at $4,100/person on publicly funded healthcare (including federal, state, local) … slightly above Norway’s $4,000/person, which provides universal healthcare.

And then we spend another 1 trillion (subtracting out the tax reduction) in private funds.

So yeah – a lot of those countries who are spending less than what we do on publicly funded healthcare DO have longer waiting lines for procedures, etc. They’re also spending half, or less, than we spend per capita combined public and private. Of course they have longer lines.

But with the same amount of per capita public spending that we have here in the land of the free – they’re providing free healthcare to all.

If we can’t figure out how to do that – provide universal care to all at the same cost that other nations do – then allow private parties to spend that extra trillion or some portion of it to purchase expedited services that we can’t manage to provide on the public nickle … then we’re screwed in the long run.