You may have heard that Senator Ted Cruz is carried on his wife’s Goldman Sachs-provided health insurance policy. What you probably haven’t heard is that the policy cost $40,543 in 2009. Austin Frakt used publicly available data to estimate the size of the tax-subsidy Cruz receives from the federal government for his insurance.
Plugging and chugging with these numbers (formula here), I compute that the “tax price” of Senator Cruz’s health insurance is about 64%. In other words about 36% of his health insurance premium cost would be government tax revenue if employer-sponsored health insurance were taxed like wages. That’s $14,595.
A typical, able-bodied, adult Medicaid beneficiary costs government $3,000. In other words, Senator Cruz’s health insurance tax subsidy could fund Medicaid coverage for almost five such adults.
Sen. Cruz hasn’t done anything to “earn” this tax subsidy beyond agreeing to be married to his spouse. If he were unemployed and had no income, he’d still get the roughly $14,595 in subsidies through lower tax payments for his wife. Because both he and his wife have high six-figure to seven-figure incomes, they don’t really need this tax assistance, but it is particularly galling that Sen. Cruz’s spokeswoman said that his health plan “comes at no cost to the taxpayer.” It actually comes at the expense of paying for five typical adult Medicaid plans.
And then we can begin calculating the damage Goldman Sachs did to ordinary Americans with their role in the housing bubble and the financial collapse.
I’m pretty sure that Republicans don’t view the $15K as a subsidy, but as $15K kept out of the hands of the demon Federal government; same goes for any tax break now and forever, world without end, amen.
The point is that they’re wrong.
Of course they’re wrong; I’m trying to imagine how Ivy League Champion Debater would try to wriggle his way out.
Jesus. You actually managed to lower my opinion of Ted Cruz even further.
I’m still having a hard time not connecting this dot as some oblique, or maybe crystal clear, form of Goldman Sachs’ paid undue influence on a sitting Senator. Isn’t that a form of income from an outside source to Cruz?
It’s just a Cadillac health care plan that his wife gets because she works for Goldman Sachs. The problem is with the law, not with any influence-peddling. There obviously ought to be some kind of cut-off to how much money you can spend on a health care plan with tax-free dollars.
But perhaps the problem with the law is there because of undue influence peddling in the first place? wOULD GOLDMAN sACHS SUPPORT A CHANGE IN THE LAW SO THAT ONLY THE FIRST $3,000 IN PREMIUM IS TAX FREE? I think not…
Isn’t there though as part of the ACA? The tax on Cadillac plans.
Given the cost of these taxpayer plans, the Democrats should offer up a bill that allows employers to buy into Medicare coverage (if they want to and if their employees agree to be covered by Medicare). Given that it would save the employers money, they would probably offer incentives for employees to accept. And that would help our health care system evolve in its efficiency.
Why not allow employees to buy into Medicare directly?
You expect them to voluntarily join a health insurance pool with high adverse selection? That has been running an annual per capita payout of $12,000. None of the fully functional UHC systems in other countries expend anything close to that amount on their senior populations — in fact with their far larger percentage of seniors than in the US, their systems would have crashed in burned if they spent even half the average Medicare beneficiary cost.
They also don’t allow the old to pay more than the young like we do here, although the ACA (at least in writing) brings down the level of difference that currently exists (but still way too large).
Still, if they joined such a pool, would their expenditures be at such a high per capita payout? And if they joined would they be expected to shell-out a lot more than they do in the private-world? I never understood how such a Medicare buy-in would work in reality anyway. I doubt it would really help their bottom-lines in the grand scheme of things unless they could simply drop them into the Medicare pool altogether rather than buying them into it.
The larger point is that everybody that enjoys employer paid health insurance gets a tax subsidy. But we can’t talk about that because we never talk about the hidden subsidies to the middle class and wealthy — it’s only when programs specifically assist the less well off that enrages and mobilizes political opposition.
Vampire Squid indeed.
This also creates an emphasis for healthcare providers to chase the dollars these plans can pay for. So they can devise ever more expensive treatments, tests, etc. for the many wealthy enjoying these plans. Meanwhile, basic preventive and smart management of chronic illness for the 99% is deemphasized.
One of the beautiful things about Obamacare is that it starts to tackle how monetary incentives work in healthcare and it has started to restructure some of this.
Part of Obamacare will deal with the Cadillac plans like Cruz’s starting in 2018 by charging an excise tax for healthcare plans above a certain threshold: