Feb 15, 2007 3:44 PM
Here we go again.
The president’s State of the Union message made it clear he still doesn’t get it. So we’re headed for another fight over health care.
George W. Bush’s proposal to solve the health-care crisis by manipulating taxes again would turn our hard-won health benefits, negotiated over many years, into taxable income. On the other hand, for those buying insurance on their own, rather than through an employer, there would be a tax deduction of $7,500 for an individual and $15,000 for a family to cover the annual cost of health insurance.
This tax benefit, he said, would benefit the 47 million low-income Americans who are presently uninsured. Not so, say folks at the conservative Tax Foundation. Instead, they point out, 53 percent of Americans without health insurance pay nothing in federal income taxes and so would get nothing from a break on such taxes.
The proposed tax benefit would, however, provide yet another tax break for wealthy Americans who could buy themselves expensive, gold-standard coverage and claim the cost as a tax deduction.
We — retirees, working Americans and union members — the middle class, will have to pay for this tax break by paying taxes on our employer-provided health plans.
As a New York Times editorial noted the day after the address: “Mr. Bush’s plan would put a new tax on Americans who were lucky enough to still have good health-care coverage through their employers. Some large portion of those are middle class and represented by the labor unions that Mr. Bush and the Republicans are dedicated to destroying.”
Congressional Democrats, too, describe the plan as a tax increase that would penalize middle-class Americans with good health benefits.
Rep. Charles Rangel, D-N.Y., and chair of the Ways and Means Committee, said, “I cannot conceive of this as an olive branch, as an attempt to get something done.”
Paul Krugman, in his New York Times column, said, “Mr. Bush is still peddling the fantasy that the free market, with a little help from tax cuts, solves all problems.”
He cites the administration’s attempt to push people out of employment-based health insurance and into the private market in the belief that people have too much insurance and that costs will come down when they have to pay more out of pocket for medical expenses.
The Alliance for Retired Americans pointed out that the skewed tax credits disproportionately affect retirees and could hasten the dropping of coverage for retirees. Alliance President George Kourpias said, “If the president wants to solve problems, not create more gridlock, he could reverse his veto threat of a bipartisan bill to allow negotiation of lower drug prices on behalf of Medicare beneficiaries.”
In the meantime, we are also taking it on the chin as drug companies continue to act in collusion to keep generic drugs off the market. Brand-name drug companies are paying huge amounts to generic competitors to keep their drugs off the market.
Both drug companies, the brand name and the generic, are the big winners. We, the consumers, are the losers as we continue to face exorbitant drug prices.
The Federal Trade Commission managed to eliminate such fraudulent deals between the companies until two appeals of court decisions in 2005 ruled they are a legitimate way to settle patent disputes. Now the FTC reports the brand names made three such stay-out-of-my-way deals in 2005 and 14 more last year.
A generic manufacturer is reported to make more from such payments to stay off the market than it would make from actually selling its version of a drug. That is certainly an indication of how much money is changing hands and how much we are being ripped off by not having access as early as possible to less expensive but otherwise identical versions of the original medicines.
Legislation to stop pharmaceutical companies from striking these deals is being planned by senators Patrick Leahy, D-Vt., and Herb Kohl, D-Wis.
On the Social Security front, the Alliance for Retired Americans warns that Federal Reserve Chairman Ben Bernanke is hoping to encourage the labor market to be more accommodating to older people who wish to continue working. “He could be sending a dangerous, mixed signal,” Kourpias pointed out. “It could be masking a strategy to raise the retirement age, keeping seniors working long after they should.”
There is a lot at stake for retirees and a lot to keep our eye on, so stay tuned. We will let you know when action is needed on all these important issues.