Indepedent Contractors and the Health Insurance Debate

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The end of summer always seems to be the hottest time of year and this year with the debate during the Congressional August recess on the debate on the direction health care should take has definetly heated the end of summer up.

Congress's current version of "health care reform" should have already died. For anyone who owns a business and last time I checked that would be all of us in the real estate business anything that is going to end up creating more cost in the form of higher taxes for businesses should be a read flag that we have to do whatever we can to defeated it. It will end up costs more money that gets taken away from our bottom line and in some cases make drive many of us out of business.

I am not a doomsayer, or trying to scare anyone but those are simple ecomomics facts that cannot be argued.

I think everyone agrees that there are definte reforms that need to be accomplished to rein in the every increasing size of the cost of health care. Single payer is not the answer, period.

Our allies in the developed world have had single payer for a long time and it doesn't work. In Great Britian women are having to bear children in restrooms, Doctor's office, or at home because there are no beds avaliable in hospitals.

Private insurance is now being suggested as an option in some provinces in Canada because the provincial healthcare system is not adequately providing for the needs of its citizens.

The United States has always been an advocate of free market solutions. It is the reason we lead the world in so many catergories and the world looks to the US for leadership on so many issues because the free market and freedom loving people find a way to deliver what is needed.

Here are some suggestions on what the debate should be about concerning health care reform, these are from the Heritage Foundation website at Heritage.org: retrieved August 27, 2009

A Consensus on the Problems

over $2.4 trillion on health care (almost 17 percent of GDP), and the government accounts for almost one-half of all health care spending.[1]

85 percent of all employers offer only one health plan for their employees

Premiums continue to rise in the private sector

Similar restrictions on personal choice face enrollees in government programs.

Medicaid, 23 percent are not accepting new Medicaid patients, and 18 percent are accepting only some paients

Medicare, serious legislative efforts are underway that will likely chip away at seniors' access to the private plans they want in Medicare

Those without coverage remains constant, the individuals are not the same

45 percent of uninsured are uninsured for less than four months; only 16 percent are uninsured for more than 18 months

This churning in the health insurance markets, and the lack of portability, is almost entirely the result of outdated government policies.

Two Competing Health Care Visions

General agreement on the outcomes Americans are looking for in any health care reform proposal: affordability, accessibility, portability, and quality.

On one side, there are those who believe that centralizing power in Washington is the best approach to achieve serious and long-lasting health care reform.

Proposals for a new public health plan and a federal health insurance exchange, as well as an individual mandate to purchase a government-approved package of benefits, clarify their intent: Washington control over health care financing and delivery.

The result,
Congress would ultimately be in charge of health care decisions.
A massive one-size-fits-all government system
Would depend on flawed financing schemes, new mandates, and higher taxes to pay for it.

On the other side, there are those who believe that individuals and families should be the key decision-makers in health care and that they should control the flow of health care dollars in a reformed system. They are concerned that a centralized system of federal decision-making would:
Diminish individuals' control over their personal health care decisions;
Directly undermine state autonomy and authority in health policy, undercutting both innovation and experimentation to expand coverage and deliver quality care, especially for the poorest and most vulnerable of our citizens;
Generate and perpetuate unsustainable federal spending; and
Ultimately, in the face of serious budget crises, lead to government rationing of care and services.

Key Elements for a Workable Solution

1. Tax Equity. The cornerstone of any serious health care reform proposal must address the tax treatment of health insurance. Today, individuals who purchase coverage through their place of work receive an unlimited tax break on the value of their health care benefits. However, those who purchase coverage on their own receive no comparable tax break.

There is broad bipartisan agreement, especially among health care economists and experts, that the current tax treatment of employer-based coverage is inequitable and regressive. Ideally, Congress should replace the current tax exclusion with a system of universal tax credits. Moreover, as a general principle, Congress should provide tax relief for those who purchase coverage on their own and redirect other health care spending to help low-income individuals and families purchase private health insurance coverage.

2. State-Based Reform. The health care challenges vary greatly across the country. Some states face high health care costs, while others face high rates of uninsurance. And, rural states face different challenges than urban states.

Instead of depending on a federal one-size-fits-all solution, Congress should embrace a federal-state partnership that would preserve diversity in the states. The states' role would be to devise the best ways to achieve common national goals--for example, to establish a mechanism for portability. This is in sharp contrast to other state-based approaches where the federal government sets explicit requirements and imposes on the states the onerous task of administering its federal reform. These types of partnerships are little more than a backdoor way to a one-size-fits-all federal plan.

3. Sound Financing. The U.S. spends over $2.4 trillion on health care. Instead of spending an additional $1.6 trillion on a plan financed by tax increases and unproven savings from Medicare and Medicaid that may never materialize, Congress should restructure and redirect existing health care spending to make it more effective. To address long-term health care costs, Congress must focus on fundamental reform of the tax treatment of health insurance and entitlements. At the very least, Congress should require that savings be realized before appropriating them to any expansions

Creating a Lasting Health Care Reform

Members of Congress have a choice: Either they can support efforts that expand Washington's control of the health care system, or they can allow the states to develop solutions that will transfer direct control of health care dollars and personal health care decisions back to individuals and families. The choice should not be that hard.

Nina Owcharenko is Deputy Director of the Center for Health Policy Studies at The Heritage Foundation.

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[1]Andrea Sisko et al., "Health Spending Projections Through 2018: Recession Effects Add Uncertainty to the Outlook," Health Affairs, March/April 2009, at http://content.healthaffairs.org/cgi/reprint/28/2/w346 (May 14, 2009).

[2]Kaiser Family Foundation and Health Research and Education Trust, Employer Health Benefits 2008 Annual Survey, September 24, 2008, p. 30, at http://ehbs.kff.org/pdf/7790.pdf (May 14, 2009).

[3]Ibid.

[4]Kaiser, p. 59.

[5]Inter-university Consortium for Political and Social Research, "Community Tracking Study Physician Survey, 2004-2005: [United States]," August 2006, p. 38, at http://www.icpsr.umich.edu/cocoon/ICPSR/STUDY/04584.xml (May 13, 2009).

[6]While the financing system for Medicare Advantage is flawed, some approaches to address these changes would have a negative impact on the highly popular plans. See Robert E. Moffit, "The Success of Medicare Advantage Plans: What Seniors Should Know," Heritage Foundation Backgrounder No. 2142, June 13, 2008, at http://www.heritage.org
/Research/HealthCare/bg2142.cfm.

[7]Congressional Budget Office, "How Many People Lack Health Insurance and For How Long," May 2003, p viii (Figure 2) at http://www.cbo.gov/
ftpdocs/42xx/doc4210/05-12-Uninsured.pdf (May 14, 2009).

This is the kind of sustainable solution which which be beneficial to all and keep health care decisions where they belong in the hands of individuals.