Health Insurance Freedom

I posed a question up on Plum Line today and got some interesting responses. I think NoVA and jnc were active on the thread. We’ll make it a two parter. I thought Brent, Kevin or Mark might be interested.

1. Your employer pays for your family’s health insurance at a cost of $12,000 per year. Said employer offers to drop the coverage and increase your salary by the same amount. Under current law, you lose the tax benefit of deductibility, but gain the liberty to purchase whatever insurance you like. Is it worth the price?

2. Same as scenario #1, but assume that current law is changed to make health insurance deductible on Schedule A. That or make employer provided health insurance taxable.

—–

I was effectively asked the first question when negotiating terms for a possible new position. I responded that I would have to purchase health insurance of some kind as my better half is a freelancer. The offer included health insurance. I’d take it that way as I don’t care for the tax hit.

I’d say yes to Question #2 as I dislike the link between health insurance and employment. It’s a relic of wage and price controls from the 40s. The U.S. spends as many public dollars as most developed countries do and then kicks in a few more precent of GDP.

BB

22 Responses

  1. The company I now work for gives the employee the cash value of the health insurance payment they would otherwise pay (less the employer payroll tax) if they are on their spouse’s plan. My previous company didn’t give me a dime even though I was on my spouse’s plan and declined their coverage. Instant $10k raise and one of the reasons I went and switched.

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  2. Interesting contrast showing how times have changed:

    “A vast wasteland”! It’s impossible to discuss TV, even today, without stumbling upon the medium’s most famous libel, its own version of “meathead.” The context has been lost, though. That description comes from the first official speech given by Newton Minow, shortly after President Kennedy appointed him chairman of the F.C.C., in 1961. Minow wasn’t arguing that what aired on television was bad; he was arguing that it was amoral. He quoted*, with approval, the words of the industry’s own Television Code and urged the networks to live up to them: “Program materials should enlarge the horizons of the viewer, provide him with wholesome entertainment, afford helpful stimulation, and remind him of the responsibilities which the citizen has toward his society.””

    http://www.newyorker.com/magazine/2014/04/07/the-great-divide-3

    “‘Sex Box,’ a reality show where people have sex in a box on TV, is a real thing for 2015
    By Emily Yahr August 21”

    http://www.washingtonpost.com/blogs/style-blog/wp/2014/08/21/sex-box-a-reality-show-where-people-have-sex-in-a-box-on-tv-is-a-real-thing-for-2015/?tid=trending_strip_6

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    • jnc:

      ‘Sex Box,’ a reality show where people have sex in a box on TV, is a real thing for 2015

      The apocalypse is nigh.

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    • Like “The Office” and “All In The Family”, “Sex Box” is a show already on the air in Britain. Sex columnist Dan Savage was one of the frequent hosts (but not a participant). And for the record, the box in question is opaque and sound proof. You don’t get any hint of what they are actually doing in there except what they tell you afterwards.

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      • yello:

        You don’t get any hint of what they are actually doing in there except what they tell you afterwards.

        And so the attraction is….what exactly?

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  3. And so the attraction is….what exactly?

    It’s a talk show with a prurient gimmick. And the guests aren’t always that attractive (it did come from England after all). As for why people would want to watch awkward people talk explicitly about their personal lives, isn’t that over 50% of daytime TV already?

    Judge the show for yourself:

    Personally, I’d rather watch old episodes of “The L Word”.

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  4. Worth a note:

    “Calif. Bill Would Protect Estates Of Many Who Received Medicaid
    By Pauline Bartolone, Capital Public Radio | Kaiser Health News August 28 at 3:51 PM ”

    http://www.washingtonpost.com/national/health-science/calif-bill-would-protect-estates-of-many-who-received-medicaid/2014/08/28/bc5d07e2-2eec-11e4-be9e-60cc44c01e7f_story.html?tid=collaborative_1.0_strip_2

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  5. And people wonder why I don’t watch anything but baseball and movies.

    If I were in a position to choose between a raise and health insurance I’d probably take the raise and purchase my own health insurance. I’ve always been either able, or forced, to go pretty lean on my coverage. I’ve also always been a bit accident prone but only been sick, where I needed hospital care, once. I hate to think of how much money we’ve wasted on insurance coverage for me over the years. Medicare will probably be happy to have me until the end, depending upon what finally gets me of course.

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  6. QB, per your request

    “quarterback
    8:21 PM EST
    Lol

    Please someone bookmark this.”

    it should be easier to find here after the election:

    “I feel comfortable with my call, dems net 50 seats in the House and net two to five Senate seats. No sitting democrat loses in the Senate. Kentucky, Georgia, and likely kansas,and maybe Mississippi flip. ”

    http://www.washingtonpost.com/blogs/plum-line/wp/2014/08/28/happy-hour-roundup-428/

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    • jnc:

      I was thinking a bit more about our “subsidy” discussion, and I think your position can be succinctly stated thus:

      Any aspect of the tax code which results in A paying more than B when, in the absence of that aspect, they would pay the same, represents a subsidy from A to B.

      Hence, as you claim, the child tax credit means that the childless “subsidize” those with children, and the mortgage interest deduction means that renters “subsidize” owners.

      By the same token, then, mustn’t it also be said that anyone with income of X is “subsidizing” anyone with income of Y, where X > Y? After all, in the absence of the income-based aspect of the tax code, the former would not pay more than the latter. (Obviously the progressive aspect of the tax code simply deepens the subsidy which would exist even in a flat tax environment.) This, in turn, means that each year there is a single tax payer who is “subsidizing” literally everyone else in the nation, because certainly each year there is someone who, simply by virtue of the progressive income tax rules, has the highest tax bill in all of the US. By your logic this one person is “subsidizing” every one else, and the rest of us are all moochers.

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      • Mark:

        Wiliam Duncan at NR explains the polygamny decision:

        A key point to remember: Polygamy is not now legal in Utah. One way to look at it is that Utah’s laws against the practice make it illegal to have more than one spouse at the same time. How would we know the law has been broken? Utah’s statute answers this by defining bigamy as “when, knowing he has a husband or wife or knowing the other person has a husband or wife, the person purports to marry another person or cohabits with another person.”

        It’s the second part, regarding cohabitation, the court took issue with. Among other things, the court felt the state selectively prosecuted those who were open about being in polygamous relationships but not adulterers, even though the conduct is arguably the same. The judge also suggested there was some targeting of people who claim religious reasons for practicing polygamy (although it’s hard to think of any secular polygamists drawing attention to themselves in Utah).

        A last note: There’s some real irony in the federal courts faulting Utah for its polygamy and same-sex marriage laws since guaranteeing only monogamous husband-wife marriage was probably the most important condition on Utah’s entry into the Union.

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  7. What’s the limiting factor on marriage besides yello’s bigoted “ick” factor? I can’t find one.

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  8. “By the same token, then, mustn’t it also be said that anyone with income of X is “subsidizing” anyone with income of Y, where X > Y”

    Yep. Income based tax codes involve the rich subsidizing the poor. Progressive ones are explicit about that being a feature, not a bug.

    The other point with my analysis is it’s argued from either a balanced budget or a deficits have consequences position, i.e. by taxing one person less you will invariably at some point now or in the future have to tax another person more.

    If you buy into MMT that deficits don’t matter and you can cut one person’s taxes and just tack the difference onto the deficit in perpetuity, then the argument is weaker, but I don’t think either of us are MMT’ers.

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    • jnc:

      Yep. Income based tax codes involve the rich subsidizing the poor.

      Well, that is certainly what I would argue. But my point is that, according to your thinking, the rich are not just subsidizing the poor, they are subsidizing literally everyone who is less rich and therefore pays fewer taxes than them. Which of course I don’t believe (do you?), and why I reject your framing.

      The other point with my analysis is it’s argued from either a balanced budget or a deficits have consequences position, i.e. by taxing one person less you will invariably at some point now or in the future have to tax another person more.

      That is no doubt that is true. My bone of contention with your analysis is in the assumption that any person who is taxed less than another person is necessarily receiving a subsidy. That just is not true.

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  9. They are being subsidized by not having to pay higher taxes than they otherwise would absent the tax preference that they aren’t eligible for. I don’t know if you consider that just semantics.

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    • jnc:

      I don’t know if you consider that just semantics.

      I don’t consider that a subsidy. In my mind a subsidy exists either when the cost of X is paid for by someone other than the beneficiary of X, or when a direct cash payment is received by someone in exchange for nothing at all (or at least something worth less than the cash).

      In the case at hand, X is government goods and services. If person A is the recipient of X, and X is paid for by B and C, then A is the one getting the subsidy, and B and C are the subsidizers, even if B and C are paying different amounts (regardless of the reason). It makes no sense to me to say that B is subsidizing C simply because B pays more than C for the services received by A. If it did, then as I said, it is the case that a single person, the one who pays the highest taxes each year, is “subsidizing” literally everyone else.

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  10. BB, how an individual responds to #1 obviously depends on circumstances for that individual.

    As for #2, we pretty much agree.

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  11. Scott, thanks for the update on the Utah case. I suspect that a criminal penalty against cohabitation is arguably void for vagueness.

    In Louisiana, in recent times but not now, “adultery” was evidenced by a man going into the home of woman not his wife or familial relative, when no other adult was present, before dark, and not leaving until daylight. Also, vice versa.

    You can see how quickly stupid this gets.

    Reynolds is still the law of the land and as long as the Supremes can turn away challenges to the criminalization of polygamy by saying “REVERSED. Per curiam. Reynolds“, they will.

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