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Depressing Health Care And Retirement Affordability News And Taxes

November 10, 2015
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I’m feeling quite negative at the moment. It’s a strange and unsettling feeling for me. One thing I am feeling especially negative about is the unaffordability of health insurance, health care and retirement, and the government’s Band-Aid approach to addressing these issues. So far this week I’ve read a series of articles that provide examples of how bad things are and how unlikely they are of getting better. These articles spotlight how the private health insurance, health care and retirement saving systems continue to shut the door on any hope of reform.

To its credit, the federal and state governments continue to put forth proposals and pass legislation to abate the affordability crisis. These programs include:

  • Accountable Care Organizations (ACOs)
  • Obamacare
  • Automatic IRA
  • myRA
  • Retirement Savings Contributions Credit (SAVER’s Credit)
  • State IRA programs
But these efforts are still Band-Aids, at a time when we need a massive overhaul of the current systems. And we can start by comprehensively addressing government subsidies that make private sector plans more attractive than public sector solutions.

Rethinking Employment-Based Health And Retirement Plan Tax Incentives

Most workers don't understand the link between the workplace benefits they participate in and the federal tax code. Their employee benefit plan information is littered with terms like pretax, tax-free, tax-deferred and tax-favored, but they would be hard pressed to explain what these terms mean. However, if the link between health and retirement benefits and the tax code was severed, they would immediately figure out that something terrible happened. Their paychecks would be smaller. And they would insist on getting their government tax subsidies back.

Of course workers don't view tax-favored employee benefits as federal government subsidies. They think they are entitled to keep as much of their hard earned money as possible and who cares that only employer-sponsored health and retirement plans receive the subsidy. It's not their fault that not everyone gets it. The tax code is full of provisions that benefit some and not others. Continue Reading...

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