EMPLOYER-SPONSORED COVERAGE: Tax Break Helps the Wealthy
Highlighting "the contradictions in federal tax policy," a new study finds that last year the tax break allowing employers to provide workers with health insurance cost the federal government $111.2 billion, and that 68.7% of those lost tax dollars went to families with annual incomes of more than $50,000 -- about 36% of Americans. The study, published today in Health Affairs, also finds that about 23.6% of the tax break went to families with annual incomes above $100,000. Overall, $302.6 billion was spent last year on employer-sponsored coverage, with employers paying 83.4% and employees paying the rest. "With more than 43 million uninsured persons in the United States, it is important to ask ourselves whether it is appropriate that 68.7% of the federal health benefits tax expenditures are going to 36% of the population with the highest incomes," said co-author John Sheils, vice president of the Lewin Group (Meckler, AP/Dallas Morning News, 3/8).
General Motors Restricts Care
In an attempt to cut its $4.5 billion annual medical bill, General Motors Corp. is placing restrictions on its white collar workers' access to care in fee-for service plans. GM has contracted with Health International to provide "care managers" to consult with employees before undergoing surgery or a hospital stay. Starting next year, patients who seek care against the recommendation of a care manager must pay a $200 out-of-pocket charge. Employees will also be encouraged to go to "centers of excellence" for medical care. About 70% of the company's active and retired salaried workers are in FFS plans. Jim Cubbin, GM's executive director for health plans, said the move also comes in response to findings that GM employees get too "many expensive surgical procedures and far too little preventive care." For instance, they receive "bypass surgery at twice the rate of comparable groups" (White, Wall Street Journal, 3/8).