Taxes And Health Care

So at least one major tax break that allows people to shelter their health care spending from taxation has been preserved intact by our brave politicians. Ron Lieber reports in the NY Times that you can still put money into a Health Savings Account without paying any income taxes on it and it gets even better because, unlike your IRA, you can spend funds from this account without paying taxes.

Did Wonks Anonymous also mention that unreimbursed medical expenses are still tax deductible.

So, although nine out of ten economists are said to agree that a major driver of rising medical costs are the tax breaks extended to medical spending and we have just implemented a health reform that taxes high premium health insurance policies, we still retain two costly tax breaks for medical spending.

But this is O.K. because sick people wind up spending whatever they put in to their HSA's to cover the deductibles on the High Deductible Plans that they have to carry to qualify for the HSA tax break and healthy poor people are rarely even able to make the maximum contribution to the accounts. Only the healthy and the better off can take advantage of this feature of the tax code.

Meanwhile only the really comfortable would even dream of paying for medical care out of pocket.

In these days of ruthless class warfare it is good to see that our leaders are prepared to take steps to comfort the comfortable.

 

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