Taxing employer-provided health benefits — by removing considering them as income — was a bad idea when Republican John McCain proposed it during the presidential campaign and it remains a bad idea now.
And yet, here it is:
At a recent Congressional hearing, Senator Ron Wyden, an Oregon Democrat whose own health plan would make benefits taxable, asked Peter R. Orszag, the president’s budget director, about the issue. Mr. Orszag replied that it “most firmly should remain on the table.”
Mr. Orszag, an economist who has served as director of the Congressional Budget Office, has written favorably of taxing some employer-provided health benefits and using the revenue savings for other health-related incentives. So has another Obama adviser, Jason Furman, the deputy director of the White House National Economic
Council.
They, like other proponents, cite evidence that tax-free benefits encourage what Mr. McCain called “gold-plated” policies, resulting in inefficient and costly demands for health care and pressure on employers to hold down workers’ pay as insurance expenses rise. And, they say, the policy discriminates against those — many of whom are low-income workers — who do not have employer-provided coverage.
When Senator Max Baucus, Democrat of Montana, advocated taxing benefits at a recent hearing of the Finance Committee, which he leads, Treasury Secretary Timothy F. Geithner assured him that the administration was open to all ideas from
Congress. Mr. Geithner did, however, allude to the position that Mr. Obama had taken as a candidate.
The fact that this has come up — and that some universal health care advocates are willing to consider it — shows that the various maneuvers needed to provide full coverage short of a single-payer system are not likely to work.
During the early post-war period, when health care first became a political issue, the medical industry wielded the socialism canard — socialized medicine — to defeat a single-payer system, forcing unions to fight for health insurance for workers. As health care costs have continued to rise, however, employers started cutting back on coverage, pushing costs back onto employees, with the end result being a hodge-podge of plans, unevenly distributed and administered, with far too many people lacking needed insurance.
Fixing the system will require more than the mandates President Obama has called for, more than the various piece-meal approaches being tossed around on Capitol Hill. It will require radical change.
Such change, however, is considered by the political people to be politically untenable, so the political people — who fund their political campaigns with political contributions from the insurance industry and others with connections to health care — fiddle with bureaucratic plans that can only result in political failure.
Hasn’t anyone learned anything from Harry and Louise?
