The savings account should be a Roth-type HSA. Deposits should be made with after tax dollars and withdrawals for any purpose should be tax free. Growth should be tax free for the same reason that third party insurance is allowed to carry over reserves from period to period without taxation.

I’m assuming that the tax credit will be completely exhausted by third party premiums. If any of the credit is left over, however, it could be contributed to the Roth account as well.

A good way to describe the revenue-neutral approach that John describes is “transferring the tax advantage from the business to the individual as part of giving the individual more control over health care decisions.”

The Obama approach is “eliminating the tax advantage to give more money and more control to the federal government.”

I totally agree with DoctorSH and FTIMMINS. It is all about control of finances and the people.

John, this is not a new idea. Why is it not embraced?

The tax would be on the value of health insurance, not health expenses. So if the average family plan funded by an employer cost $12,000 each employee with family coverage would be taxed on a $12,000 benefit — irrespective of how much the employee and the family actually spent on health care.

Taxing health insurance benefits? What does that mean? Last year I had breast cancer. My insurance paid almost $300,000 in medical costs including surgery, radiation, chemotherapy MRI’s, CAT scans bone scans x-rays medications and one 8 day hospital stay for an infection. Does this mean that I would be liable for paying taxes on the $300,000 on the benefits paid by my insurance? I would have had to forgo treatment and die because I would not be able to pay taxes on the benefits paid. Tell me this is not true.

Here is Kaiser’s page. They also offer a “conversion plan” that’s almost identical.
https://kaiser.healthinsurance-asp.com/expressweb/user/hIPAANorthern.jsp

> Are you talking about the CA High Risk Pool?

I don’t think so. The plans above are offered through Kaiser, and I know Anthem offers something similar (but even more expensive). They are not accessible through a waiting list, so I suspect not.

Bart, I have a small company in California that wants to switch to individual insurance but the owner’s son is uninsurable because of drug use. He is going to be terminated in 2 months because of his age.

What number do I call to find this HIPPA coverage for him? Are you talking about the CA High Risk Pool?

Not that I’m happy with the status quo. I just hate to see a discussion about federal health care reform muddied by conflating too many different issues.