Unfairness of Current System
- Although employers write the checks for group coverage, employees actually pay for it. A study has shown that for every 1% rise in health care costs, 80% is paid for by holding down salary increases. To the employer, salary has already increased 1% - they look at the total checks cut for each employee, for both salary and benefits.
- within a company health care plan, older (and better paid) employees tend to use the services more, with the cost (reflected in rates) spread over the pool of employees, so the younger ones who use less services subsidize the older, better paid employees and management. This subsidy is both through paying the same premium as older, more intensive users, and also through taxes which support the subsidy.
- through taxes, we all pay for Medicare and Medicaid. Medicare provides health care for old people, who on average are richer than those paying the taxes. Starting in 2007, plan B Medicare premiums are indexed to income - a step in the right direction.
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