Wednesday, September 17, 2008

John McCain's Health Insurance Plan...not good for me

Was reading a crique of Senator McCain's health insurance plan. Now, the critic claimed his plan was going to raise my taxes becuase he would tax health insurance benefits like it was cash. It doesn't say that on Senator McCain's website, but I suspect in order to pay for the generous tax credit, something like that is going to have to occur. It has been a goal of conservatives for a long time.

the gist of the plan is that I can opt out of my employer covered group and get inusrance on my own, and my family would get a 5K tax credit (if I can find a plan for cheaper, the residual goes into a health savings account).

So, between my employer and me, I pay 572 a month for my health insurance. I don;t pay taxes on my contribution nor on my employers. That apparently would change. I'd pay income tax on an additional $6800 in income. At my tax rate, that translates to about 2K. so, I pay 2K more in taxes but I get a 5K tax credit...I'm 3K ahead. Sounds good.

I can stick with my health plan. But why, the market is much better right? I checked and the best I can do "on my own" is no where near as good a coverage as I have right now. My deductible is 900 right now, best I can find is a 2K deductible. Prescription coverage looks, without looking at the details, about in par with what I have right now. So, double my deductible and 20% of office visits after deductible. I pay #15 right now--period. But, the plan is cheaper, by $100 bucks a month, so I save $1200. With the tax credit, I'd just be out of pocket an additional 600 the extra $1000 deductible

but I can stick with my employer's insurance if I wish. I still get the tax credit, so, I'm up 3K (except it has to go into a HSA). Right now, I would never use 3K, so that money just funnels to the insurance company anyway. If you don't use it, you lose it. So, I pay 2K more in taxes, and get a 3K HSA, which I might use 1-2K of. My deductible of 999 would come from the HSA. We've had those before, they worked when we had braces, but don't work easily now, "unfortunately" we are pretty healthy.

But, my employer is self-insured. We don't permit opt outs, or we couldn't insure ourselves. I'm assuming that for Senator McCain's plan to work, there must be an opt out. So, some folks, especially younger ones and single ones, or those who have options with their spouses (I didn't think about opting out and moving to my wife's insurance), that my employer's plan will probably get more and more expensive (read degraded coverage(, until I probably would find the admittedly cheaper but not as useful plan, my preferred option.

All the while I can be jealous of my mother's medicare plan, which does a better job of covering stuff than my private, employer provided plan does.

I'll look at Senator Obama's tax plan for my next posting.

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