Nearly Everyone’s Coverage is Subsidized by the Tax Payer… and Employer Coverage Costs the Tax Payer More Than Any Other Type
Nearly everyone’s health coverage is highly subsidized (via tax breaks, if not credits). The group that costs tax payers the most money in healthcare is employees. Around $1,730 per year in tax subsidies, or around $144 per month in tax payer money is spent on each employee’s health coverage on average. [according to 2016 data]
As Charles Gaba reported, and we confirmed here, “The Congressional Budget Office (CBO) estimated that $268 billion, or about 40 percent of this year’s subsidies for health coverage, reflects tax breaks for small employers and the exclusion for employer-based health insurance plans that cover 155 million workers under 65 years of age.”
Thus, it isn’t those on ObamaCare subsidies costing the tax payer the most money, it isn’t seniors, it isn’t our poorest on Medicaid, it isn’t the children on CHIP, it isn’t our vets on VA, and it isn’t Natives, or immigrants, it is the American worker.
Now, to be fair, a worker is working, so they pay in, and they get money out. Also to be fair, the group “American workers” is the biggest group of all the aforementioned.
Workers getting a helping hand from employers (which nets them tax benefits) is fair, just, and good. I’m not calling for a fix. I’m only pointing out the reality is, almost everyone is getting a their coverage subsidized by the tax payer in one way or another.
FOR MORE READING SEE: “Federal Subsidies for Health Insurance Coverage for People Under Age 65: Tables From CBO’s March 2016 Baseline“, “How Much Do U.S. Health Insurance Tax Breaks and Subsidies Cost?“, CBO charts federal subsidies for U.S. health insurance coverage, or, less politely, “Dear ACA opponents w/employer-provided healthcare coverage: Either cough up $1,730/yr in taxes or STFU“.
NOTE MARCH 2019: This page was written in 2017, I have made some edits here in March 2019 to keep the page relevant (as most of what is said here as is true today as it was then).
People Can Get too Sick to Work, ObamaCare (the ACA) is the Safety Net!
With the above noted, it is important to note that programs like Medicare, Medicaid, CHIP, and ACA cost assistance don’t just benefit those who aren’t working.
You see, the ACA and more generally the current healthcare system is actually protecting the worker (and it’s not just in terms of the expansion of employer coverage).
The ACA is, for example, helping to provide a safety net when a worker gets “too sick to work”.
So, then, everyone with employer coverage is subsidized by the tax payer, just like someone without employer coverage… but only as long as they can work. If they get too sick to work, they lose their job and have to rely on COBRA, Medicaid (or CHIP for their family), or the ACA.
If the ACA is repealed, it could mean that when you are too sick to work, you are too sick for coverage.
Thus, why did health insurance become more expensive?… One answer: Because they used to have tons of loopholes to exclude the sick (well that and the GOP blocking readjustment payments, Medicaid expansion, and the exchanges, etc).
This is to say, ObamaCare and Medicaid are safety nets for all, not just some. The idea that only “poor moochers” use them is arguably propaganda designed to convince people to cut holes in their own safety net.
You may think, as a worker, “i’m doing this on my own, others should too”… but subsidization and tax breaks tell a different story. They tell a story of employer tax breaks, HSAs, 401ks, and tons of public funding in healthcare and healthcare research. Of Medicaid and tax credits and protections when things get bad, of Medicare and Social Security when you get old.
What I’m saying is Medicaid is a safety net work workers, Medicare is a program designed for workers, etc!
You don’t know it till you need it, and you won’t miss it until it is gone, but crunch the numbers and look at your tax return (or, more so, look at your employer’s), and you’ll see the ACA isn’t as much of a burden on the working class as one might be led to believe.
Repealing ObamaCare will hurt everyone. Except, no one is going to realize it until they get sick, lose their job, and then realize “uh, oh, I HAVE A PREEXISTING AND CAN’T AFFORD THE 5X FEE ALLOWED UNDER THE GOP PLAN WHILE I PAY IN FOR 18 MONTHS!” [an old version of the GOP plan changed the way pre-existing conditions worked even though it claimed to keep protections, it only did if you paid every month].
Pair this with the fact that the GOP has purposely been trying to dismantle and break the ACA, even blocking readjustment payments to insurers as noted above (which jacked up the costs during open enrollment 2017), and we get a different picture than the one conservatives paint. They are implicit in the “death spiral”, although it is more a readjustment than death spiral.
The thing is, we have a healthcare system that, if it were a nation, would be the 6th largest economy on earth. That is never going to magically become cheaper. It’ll always be X$ per person, we can exclude people through loopholes to keep costs down, but why bother if one is just going to lose coverage when they get sick anyways?
The Only Death Spiral is the Spiral the American People Will Be in if the GOP Doesn’t Put a Good Plan Together
We need to demand that the GOP actually fix healthcare.
The GOP’s current claims of “death spirals” sound like the old “ObamaCare will kill your grandma line”. The claims of repeal and replace ring hollow when all we see is repeal. We know their tactics, and this is just the old “lets create an environment of fear while we cut holes in the safety net” tactic again!
Let us be honest with the public. Health insurers are making money hand over fist, but they are happy to make more. Pharma is making money hand over fist, Trump put his foot down, but the GOP has said nothing.
We know employer coverage costs the most, but the GOP only wants to go after Medicaid, Medicare, ACA. They actually want to expand HSAs and tax breaks for businesses. They aren’t saving money, they are switching whose pockets money goes into (the term from this since the 80’s has been “trickle down”; likewise what they are doing to the ACA is called “starve the beast”).
We know the GOP has been complicit in breaking the law, court case after court case, blocked provision after blocked provision… why is it again we are supposed to “trust them” on a “great plan”?
What about the 20 million? If we are all on the dole, why are we so prejudice against some “takers” and not other “takers”?
FINAL WORDS: Reagan never said “Government is the problem”, he said, “in this present crisis, government is not the solution to our problems, it is the problem”. The GOP has gone to the far-right of Reagan on this issue, they are deregulatory without a plan at times when it comes to the ACA, and their Tea Party spirit has failed to impress or bring reason to the table when it comes to pushing back on Obama era polices. Ultimately we all care about the American people, so let’s give them a plan that works. Enough with the scapegoating, we are all in this together, we have no right excluding Americans. Especially not our working class when they get down on their luck and too sick to work, or likewise, when they have a family member who is too sick to work. Big government doesn’t need to be the solution, but we do need solutions. And since Congress is a specific entity in our tripartite system with specific powers, those solutions need to be passable legislation.