Healthcare Reform and Taxes

Change.

That was the word of the year. It got a lot of support and equal parts criticism. Much of said change was geared towards healthcare. This said reform of the healthcare system had many worried. Well, worried is putting it mildly. So how are these changes going to be financed? Like always is it going to come from the American middle class? Well here’s the skinny on healthcare reform and taxes.

First off, the health insurance reform bill that is being considered by the senate won’t raise taxes on individuals making less than $250,000. It is actually claimed by the Joint Committee on Taxation that the bill will given American families a significant net tax cut to the tune of $450 billion over the next 10 years.

But if it isn’t the middle class who is fronting the bill, who is? It looks like insurance companies, employers, wealthy taxpayers and individuals with higher than average insurance premiums are in the crosshairs. Sounds okay, but the cost would eventually find its way down to the end consumer of the healthcare plan. That’s just how economics work.

The good news is that the excise tax on higher premiums would tell insurance companies to lower their prices. One of the other good things laid out in the plan is the idea of bundled payments instead of a doctor being paid for every single procedure done to an individual. So if you go in, you won’t pay once to be diagnosed, again to get rid of it, and when that doesn’t work, again to try something else.

The bill is far from perfect, but it’s a step in the right direction. Taxes are a necessary evil. We just need to find a way to put them to work in a positive way. Finding the most deductions this year could really make a difference.