Double Trouble

Employer-provided insurance policies can spell double trouble for those who are uninsured. First of all, medical billing companies routinely charge uninsured women as much as 400% more for maternity-related procedures than they charge insured women. One reason for this is because insurance companies are more likely to question inflated charges, leaving the uninsured to foot the bill for those who have ample representation. Because hospitals can't be greedy with the insured, they make up for it by punishing the uninsured.

But there is another, perhaps more sinister, reason for across-the-board price inflation. Who do you think actually pays for employer-provided health insurance? The employer? Nope. No matter how you look at it, it is the employees who pay for their own insurance, just as if they were to purchase their own individual or family policies. They pay for health benefits through paycheck deductions as well as decreased pay -- this deduction is never advertised, as it is taken out before you're given your salary or wage.

But because the employer pays the insurance company, they are eligible for tax breaks that help offset the cost of health benefits, as referenced in this article by The Heritage Foundation (http://www.heritage.org/Research/HealthCare/bg2214.cfm). The article states that the tax breaks are unlimited, which means that the health care industry as a whole is taking advantage of these tax breaks to inflate medical costs, causing fees to skyrocket whether you're insured or not. For the insured, this is not a huge deal because they're already covered. But for the uninsured, the fees become unaffordable and they do not have access to medical care.

Thus, we have a situation in which taxpayers are essentially paying benefits to employers who take money from their employees to pay for health insurance benefits, allowing the medical industry to charge more for services (because they will be paid for) and then to eventually pin these higher fees back on to the taxpayers who, in essence, fund this vicious cycle.

I doubt that most taxpayers would agree that this is good policy, as the cost of medical care and individual and family insurance plans become simply unaffordable for anyone who does not have "employer-provided" medical insurance benefits.

Should a tax cap be placed on medical insurance tax breaks to force medical companies to keep costs affordable (as suggested by the referenced article), or should a cap be placed on the price of medical procedures? These questions are likely to be hot debate topics in 2009 as the U.S. government begins looking at national health care reform.

I am PRO MOM!!!
Aaron Bouren
Advocate Aaron