This is why Washington is completely broken

[BuckNaked]

My DH's company pays 100% of our family policy. So, under McCain's plan, we will get a $5000 tax credit plus double our itemized deductions for children to $21,000. Sounds pretty darn awesome to me!

But you would still have to pay tax on what the company pays for your insurance.

 

[golfgal]

OK, I am confused now. McCain's plan--he pays people $5000 to use toward health insurance premiums then turns around and taxes what we get paid for by our companies. Do the companies still get to deduct the premiums they pay?

Personally I LOVE our health insurance plan and don't want anything to mess it up!!

 

[BuckNaked]

OK, I am confused now. McCain's plan--he pays people $5000 to use toward health insurance premiums then turns around and taxes what we get paid for by our companies. Do the companies still get to deduct the premiums they pay?

Personally I LOVE our health insurance plan and don't want anything to mess it up!!

The $5,000 doesn't go towards premiums if you have insurance through your employer.

If you have health insurance through your company, all of the premiums (what the company pays and what you pay) will be taxed as regular income. However, you will receive a tax credit that in most cases will more than cover the additional tax.

If you don't have company sponsored insurance, you will receive a tax credit that will go directly to the insurance company from whom you are buying your insurance.

 

[golfgal]

The $5,000 doesn't go towards premiums if you have insurance through your employer.

If you have health insurance through your company, all of the premiums (what the company pays and what you pay) will be taxed as regular income. However, you will receive a tax credit that in most cases will more than cover the additional tax.

If you don't have company sponsored insurance, you will receive a tax credit that will go directly to the insurance company from whom you are buying your insurance.

So basically he wants to take away the "pre-tax" dollars option for paying premiums (we have a company sponsored plan-they pay 60%, we pay 40%). We pay the premiums "AFTER" tax then get a 'credit" where, tax returns?? Soooooo, how does this help us?

 

[BuckNaked]

So basically he wants to take away the "pre-tax" dollars option for paying premiums (we have a company sponsored plan-they pay 60%, we pay 40%). We pay the premiums "AFTER" tax then get a 'credit" where, tax returns?? Soooooo, how does this help us?

Because in most cases, the credit you get back is going to be more than the tax that you pay on the premiums.

$15,000 policy (employer and employee contribute, percentages don't matter)
28% marginal bracket

Tax on policy = $4200
Tax credit = $5000
Net gain for taxpayer = $800

 

[golfgal]

Because in most cases, the credit you get back is going to be more than the tax that you pay on the premiums.

$15,000 policy (employer and employee contribute, percentages don't matter)
28% marginal bracket

Tax on policy = $4200
Tax credit = $5000
Net gain for taxpayer = $800

So, I pay $5200 for premiums now, get TAXED on the $12,000 or whatever it is for the total cost to the tune of $4000 or so and they give me back $800 or whatever. Do I understand this right?

 

[BuckNaked]

So, I pay $5200 for premiums now, get TAXED on the $12,000 or whatever it is for the total cost to the tune of $4000 or so and they give me back $800 or whatever. Do I understand this right?

Yes, however, I believe that the $800 (in my example) would be put into a health savings account that you could use for out of pocket expenses, but I'm not sure about that.

 

[LisaR]

Here's a key nugget from FactCheck regarding many of the contradictory evaluations of both plans:

The estimates may vary so widely becauseboth candidates are vague about important details , such as the income levels at which subsidies would be offered or, in Obama's case, the penalty parents would pay for not insuring children. Analysts have had to make guesses about such details, and they also must make assumptions about what would induce individuals to buy coverage, or drive employers to drop it.

And here lies the REAL issue about this entire campaign. BOTH candidates are so vague about many of their ideas that it leaves us guessing. Of course, those that support Obama "guess" that his plan is the best and those that support McCain "guess" that his plan is the best. It amazes me how people will defend their candidate to the bitter end when they really can't be positive what their guys plan really entails.

 

[Humphrey Bear]

The race to give away Government funds (which come from us, BTW) has been breathtaking... This AM on NPR, I hear there is now clambering that the Feds should also purchase defaulted car loans!!!

We are doomed!

 

[golfgal]

Yes, however, I believe that the $800 (in my example) would be put into a health savings account that you could use for out of pocket expenses, but I'm not sure about that.

Um, ok, that is nice. Health Savings accounts can be a good thing. I will then have $800 that I used to be able to spend on what ever I wanted now sitting in a health savings account that I can only use for medical expenses and that money can't pay medical premiums. OK, my out of pocket expenses last year with our health plan were $60. So now I have $740 that I used to have that I no longer can use.

OK, for a lot of people that could be a nice deal. I guess I can use that $800 to pay for my Long Term Care premiums.