American Health Care Money Issue

[Owen` 2]

. . . in the State of the Union address, the President will propose a tax deduction for health care premiums. The way this has been worded (and the details are, of course, very sketchy) this may help early retiree types who are overseas.

 

The way it sounds, at least so far, is payments made for health care insurance premiums will be in some manner under an umbrella of a general tax deduction off your income.

 

The way I've read the details so far is it will not restrict to only those living in the US. Nor to premiums paid only to US health insurance providers -- though there will clearly be no voice against that in committee rooms writing the bill should a US health insurance company want such restriction put in. Have to cross your fingers on this that expats are so small a group that no one bothers to prevent them buying HC insurance from non US companies.

 

We'll know more after the speech and the distribution of details. No question it will not be enacted as proposed. Politics will be all over this. But the good news is that the President will put at least SOMETHING on the table and it has a general conservative feel to it that will provide the GOP with a starting position for 2008. The Democrats will then maneuver as they wish to make it feel less conservative. I would anticipate they will take the position that tax cuts only help those with income and they will want tax credits instead (or in addition) for the poor -- who don't gain much from a deduction.

 

My crystal balls says the President's proposal will induce both sides to negotiate some sort of tax related approach to HC insurance as the 2008 election approaches. This has at least a chance of helping US Pattaya retirees.

Edited January 22, 2007 by Owen`

[zaphodbeeblebrox 0]

Sorry for my cynicism, but isn't this just a handout for the insurance industry? The insurance industry has done nothing but increase the cost and inefficiency of the US healthcare system. It's better than socialized medicine, but I don't think this is a real solution, as it only serves to add more bureaucracy to the overbloated healthcare system.

 

I would agree that the Bolsheviks (I mean Democrats) will certainly push for some substantial modifications of this proposal. It will be interesting what emerges from this debate, if anything. Bear in mind that, other than tax cuts, Bush has gotten no substantial legislation through 6 years of a Republican Congress (immigration, tax reform, social security reform, etc). Unless he has now joined with the Bolsheviks, I can't see him getting anything done during his lame duck term.

[Owen` 2]

No idea what comes out of Congress and we can't discuss that at all until we have details.

 

What I do . . . suspect . . . is the President's initiative will establish a position on this issue for the GOP in 2008. That allows an issue, that has largely been a Democrat issue to date, to now get time in committees that will actually try to craft language that can get enough votes in both parties to get through Congress and to the President's desk.

 

If it looks close enough to what gets proposed, then it gets signed and Pattaya expats may very well find their healthcare premiums subsidized by a tax cut.

Edited January 23, 2007 by Owen`

[Sailfast 503]

No idea what comes out of Congress and we can't discuss that at all until we have details.

 

What I do . . . suspect . . . is the President's initiative will establish a position on this issue for the GOP in 2008. That allows an issue, that has largely been a Democrat issue to date, to now get time in committees that will actually try to craft language that can get enough votes in both parties to get through Congress and to the President's desk.

 

If it looks close enough to what gets proposed, then it gets signed and Pattaya expats may very well find their healthcare premiums subsidized by a tax cut.

 

I'm not familiar with the plans but it sounds like a load of crap. I'm sure big companies who already provide healthcare will save the most.

 

LOL I'm sure people who make $3000/month will really be thankful that the $1000/month healthcare cost would be tax deductable IF, IF, IF they could just afford it to begin with...lol

Edited January 23, 2007 by Sailfast

[zaphodbeeblebrox 0]

A lot of criticism is coming from employers who provide high benefit medical insurance. Bush's plan provides that employer's group health insurance premium payments are taxed if they exceed $4,000 annually for each employee. This may actually discourage employers from funding more comprehensive health coverage benefits for their employees. Does Bush, or should I say his feeble advisors, really think through anything they propose?

Edited January 23, 2007 by zaphodbeeblebrox

[Sailfast 503]

A lot of criticism is coming from employers who provide high benefit medical insurance. Bush's plan provides that employer's group health insurance premium payments are taxed if they exceed $4,000 annually for each employee. This may actually discourage employers from funding more comprehensive health coverage benefits for their employees. Does Bush, or should I say his feeble advisors, really think through anything they propose?

 

No

[Owen` 2]

Since the President's speech last night, details are emerging in greater number.

 

http://www.whitehouse.gov/news/releases/20...20070122-7.html

 

Of course, what is being proposed for numbers will not be what passes Congress, but the numbers being put out there look like someone did some solid calculations and probably say what was intended. They'll be tweaked, but they are not stupid.

 

The numbers are $7500 and $15000 as upper limits for health care premium expenditures (single and family) and deductions will be allowed off your taxable income to that amount. It is still not yet clear if this is salary only, but there is talk of retirees in the discussions so there remains a chance that it could be a deduction from your portfolio income or your pension income.

 

I think that also, what will evolve in Congress, is some sort of tax credit for very low end incomes. I do NOT think that would apply to Pattaya expat retirees. Presumably all Pattaya guys have income higher than that. Credits give money to people at the low end who aren't paying any taxes. Deductions are of no value to them because . . . they aren't paying taxes. Deductions are for people who do have income (from wherever) and do pay taxes and the Pattaya retirees I suspect are all in that category (or they would not eat).

 

The details remain incremental and uncertain. From a US Pattaya retiree perspective everything is not yet known, but it continues to look like it's possible that a Pattaya retiree may get a tax deduction off his pension (or even portfolio) income that will subsidize health care insurance premiums. If I understand what is proposed correctly, this $7500 number is like a Standard Deduction for health care. At a 20% (pulling this number out of the air, YMMV) marginal rate it's $1500 in your pocket. Frankly, the way stuff reads is this money is yours whether you pay for health insurance or not. If you do pay for it, it's a nice subsidy.

 

At this point the variables are:

 

Do the Democrats become enraged that everyone is talking about Bush's plan and refuse to do anything with it? The Democrat approach was to be a new Federal agency of national health care with a new staffed bureaucracy and government controlled. This Bush plan is a more conservative tax policy based approach. My opinion is there are decent Democrats in Congress who know the people want something done and they will attack this plan's numbers, and adjust details, but they will embrace the approach overall. I will say that the websites are filled with debate of the plan and its details tonight so I think there's a good chance something may happen.

 

Will there be any attempt to forbid taking the deduction if health care insurance bought is not US insurance? I doubt this. The deduction looks like a Standard Deduction and they don't care how you spend it.

 

Will the deduction only apply to earned income? Big question and an important one to Pattaya retirees.

 

Okay, that's my read this evening. Lots of potential for putting some money in US Pattaya retiree pockets.

Edited January 25, 2007 by Owen`

[vegasdave 0]

This is just another exercise in foot draging. Basicly it is a give away to the insurance companies. I think the idea of tax deductions only helps out industry, not the people. Why is it certain "products" are deductable. Why should any business be able to sell their products with this built in rebate. All it really does is allow them to pad up the price because it is "dedutable" I think that home mortgages are a classic example. I would venture to say that if you where to eliminate the deduction you would see mortgage rates drop by about 2%. I believe the only sensable tax reform is to eliminate ALL dedutions. No dedutions because you have kids, are old, poor, rich, donate, invest, married, farmer, church. absolutely no deductions. This would allow the market to determine things. Then basicly they could throw out 99% of the tax code. The tax form would be a post card.

how much did you make?

subtract the first $25,000

pay us X% on the balance

This is the simplest and fairest thing I can come up with. Oh and each person files for themselves no joint returns ect.

After doing the math the deductions system would be helpful to me for about 1 1/2 years until the cost increases in my insurance caught up with it.

The solution is to open up medicare to anyone who wants to pay into it. I pay $469 a month for crap insurance. I would gladly buy into medicare for that money instead. This is a system that does work for the most part. The administration costs are about 1% as compared to 25% for insurance companies. The biggest problem with medicare is that they have a pool of older and less healthy people. If they where to take in younger people who would pay in, it would be much more solvent. Just my 2 cents worth.