February 7, 2007
Critics of President Bush's new health insurance and tax proposal say millions of Americans -- particularly the poor and the young -- could face a tradeoff between health insurance today and a Social Security check tomorrow under the fine print in the plan.
At issue is the inclusion of payroll taxes in the deductible amount allowed by the health plan:
- Social Security benefits are tied, at least in part, to the payroll taxes a worker pays over a lifetime; that means those taking the payroll deduction to pay for health insurance today would get a smaller Social Security check at retirement.
- However, experts say including payroll taxes in the deduction is essential to making the plan work; one-third of taxpayers wouldn't get any benefit at all if payroll taxes weren't included, according to Michael Cannon, director of health policy studies for the Cato Institute.
Even supporters of the administration plan say a choice between benefits today or tomorrow might have to be made. "It is possible. I think it all depends on how the proposal is implemented," said Matt Moore of the National Center for Policy Analysis.
Nonetheless, supporters insist the trade-off is important for people who lack the money to buy health insurance and don't get it at work. "Social Security benefits don't help you if you're dead," Cannon said.
Source: Dave Helling, "Benefit Dilemma," Monterey Herald, February 6, 2007.
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