19 May 2009

Taxation of Benefits & Medicare Advantage Subsidies

The fight to fix America's health care system is upon us. Last week, President Obama laid out his road map by announcing three principles for health care reform and calling on Congress to act this year. Speaker of the House Nancy Pelosi responded, pledging to bring real health care reform to a vote by July 31st!

A key issue will be the taxation of health care benefits. Such tax code changes would impede good health care benefits and act to further suppress employer-based coverage. While one wants a tax code which is more progressive, one also firmly believes the best way to achieve that is to directly tax the income of the highest earners, not the cost of a person's health care.

In fact, health care reform and the tax code should be written in a way to reward employers that have been providing affordable, comprehensive benefits to their employees.

Medicare and long term services and supports are essential to the future of our health care system and both must be addressed, whether as part of health care reform or separate from it, in order to ensure the long term sustainability of coverage for the elderly and disabled.

Additionally, reform must include a halt to over payments to Medicare Advantage private insurance companies. Over payment runs anywhere for 14% to 19% on average and is extremely wasteful in a system already facing revenue challenges. The solution is quite simple; level the playing field so that insurance companies are paid neither more or less than regular Medicare.

Private plans must be required to provide benefits at least as strong as traditional Medicare, and must include services such as home health care.

Let us close by saying, once again, the opportunity is upon us to right the wrongs of the Medicare Part D program, provide better preventive services, and other improved benefits including; vision, dental, and long term care.

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