Tuesday, 16 July 2013

Comparing Subsidies for the House and Senate Health Care Bills

library Comparing Subsidies for the House and Senate Health Care BillsStephanie Rennane, C. Eugene Steuerle

Reprinted with permission of Tax Analysts.

The text below is an excerpt from the complete document. Read the full report in PDF format.

Consider an employer who bears an equal cost for their employees and must choose between the proposed subsidy for those on the exchange and the current subsidy for those who get employer-provided health insurance. What are the consequences for the employee? This article discusses the results for the employee under the current health care bills in the House and the Senate.

The flurry of proposed health subsidies in Congress present alternatives to the current employer-provided health insurance system. Consider an employer who bears an equal cost for their employees and must choose between the proposed subsidy for those on the exchange and the current subsidy for those who get employerprovided health insurance. Under the exchange, this employer would be able to provide higher cash wages for their employees but would be subject to higher payroll taxes and would likely pay a penalty for not providing health insurance. Using the current system, the employer would pay out lower cash wages and payroll taxes, but would also be responsible for the cost of health insurance. And the employee?

(End of excerpt. The entire report is available in PDF format.)


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