So many expensive options, so few real benefits
© by Barbara Anderson
The Salem News
Thursday, March 29, 2007
So here I am, buried under health insurance options
and newspaper clippings dealing with state and federal health insurance
How will the state determine who loses the refund?
Citizens for Limited Taxation has had a good plan with Tufts HMO. Many
years ago, we decided, as a conscientious taxpayer group, to avoid taxes
by offering benefits in lieu of pay raises -- no FICA payment, no
federal or state income taxes on the benefit. It made no sense to us
that the system was set up this way; but when in Rome, do what the silly
We were happy with this for a while, but our pay remains low while the
health insurance premium keeps rising and we can't afford the
full-service plan anymore. Besides, President Bush wants to tax these
good plans to provide tax breaks for individuals who purchase their own
health insurance, and I want to get us out of the way of that possible
Of course, it would be better if all of us could just buy our own health
insurance with pre-tax dollars and carry it with us from job to job or
unemployment. But once again, those of us who have been paying our share
already would be penalized under the Bush plan.
It's like the Massachusetts nursing home tax, which is paid by
self-payers in nursing homes to help cover Medicaid patients. I've put a
handicapped bathroom next to my bedroom and will refuse to go to a
nursing home; I'll spend my self-payer money on visiting nurses and
hospice. I am tired of being punished for being responsible by a
government that, in general, wouldn't know responsibility if it found it
in its soup.
Anyhow, bigger companies than mine have human resource specialists whose
job is to understand the complexities of the health insurance system and
make the best choice for their employees and their bottom line. I don't
have the training for this, but must muddle through because our 2007
premium is increasing 11.2 percent.
My first thought was, drop the whole thing and let the employees go on
the subsidized state plan. But as a taxpayer activist, I knew what
needed dropping was that fantasy. I've followed the new state health
insurance law and know it was drafted so that those of us who have been
responsibly paying our share couldn't get a better deal from it.
Of course, we could quit our jobs and become unemployed, then get
subsidized. But that would be foolish; because we can't count on the
state health insurance law since it isn't finalized.
The concept of the new law -- making everyone take some responsibility
for having some health insurance -- was fine. But we now know exactly
what is meant by the phrase "the devil is in the details."
While the new law is covering some previously uninsured people now, full
implementation - the part that takes your state income tax refund if you
don't have insurance - has been put off until 2009.
Will we all have to send a copy of our health insurance plan in with
our tax form on April 15?
Will a new state agency be going through the multiple available plans
to match them up with each taxpayer to make sure all required coverage
What if the taxpayer isn't getting a refund, but instead owes money? I
think I'd carefully monitor my withholding so I don't get stuck having
the state take my overpayment.
OK, back to work.
In order to cut our premium, I need deductibles and higher co-pays. Then
we can self-insure by setting aside the premium difference each month
into a medical escrow account with which we can reimburse employees if
necessary. The cheaper plans still cover preventive care; so if we all
stay well, there will be a permanent escrow account at the end of the
year and we can maybe do a bigger deductible next year!
Wow, getting a feel for this, moving right along.
Rx (prescription drugs) or no Rx, that is the next question. I thought
that with a cash transaction, no paperwork involved, there might be a
cash discount on prescription drugs.
Not exactly. I'm told that pharmacies have a lower price for insured
customers, since insurance companies negotiate caps. So can't tell what
we will be charged if we are self-paying. However, we've learned that we
can get generic prescriptions for some drugs for $4 at Wal-Mart.
At present, none of us use the prescription drug benefit much, and I
like getting my medicine from the neighborhood pharmacy, where I get
free advice from pharmacists who know me and will deliver if I'm
incapacitated. But if I find myself unable to afford to subsidize the
citizens whose costs are capped, it's nice to know the Wal-Mart option
Clearly, the trick is to a.) continue to avoid taxes by getting benefits
in lieu of pay; b.) choose the lowest possible premium and start saving
to self-insure for the deductible; and c.) hope we don't start needing
expensive drugs, and that all four employees don't need the deductible
Barbara Anderson is executive director of Citizens
for Limited Taxation. Her column appears weekly in the Salem News and
Eagle Tribune, and often in the Newburyport Times, Gloucester Times, and
Lowell Sun; bi-weekly in the Tinytown Gazette; and occasionally in the
Providence (RI) Journal and other newspapers.