David Himmelstein, M.D., professors at Harvard Medical School, primary care doctor at Cambridge Hospital in Massachusetts.


August 20, 2009 - Taxing job-based health benefits would heavily penalize insured, working families, taxing them at a rate of 140 times more than Wall Street execs, reports a new study by two Harvard researchers published in New England Journal of Medicine, August 19, 2009.

The study, titled "The regressivity of taxing employer-paid health insurance," appears in the August 19 online edition of the New England Journal of Medicine. It was written by David Himmelstein, M.D., and Steffie Woolhandler, M.D., professors at Harvard Medical School and primary care doctors at Cambridge Hospital in Massachusetts.

The taxation of employer-sponsored health benefits has been advocated by many health economists and lawmakers, including some members of the influential Senate Finance Committee, which is now drafting health care reform legislation. President Obama has said he has not ruled out such a tax to fund his reforms.

Analyzing income and insurance data from the 2005 Current Population Survey of the U.S. Census Bureau and other sources, the authors reveal that taxing workers' job-based health insurance would cost those with low-incomes ($0- $10,000 annually) 18.3 percent of their income, but cost high-income (over $100,000) families a mere 2.7 percent. (See the table from the study at http://healthcarereform.nejm.org/?p=1521)

The authors note that the tax rate would drop even lower for the super-rich. "A Goldman Sachs executive who enjoyed the firm's infamous $40,543 health plan got a federal tax subsidy of about $15,367 last year," they write. "But that's only 0.13 percent of the bonuses received by the company's four top earners. So though taxing health benefits would spare the uninsured, the average poor family with employer-paid coverage would be taxed at a rate 140 times higher than Wall Street titans."

Dr. David U. Himmelstein, lead author of the study and associate professor of medicine at Harvard, added: "Most economists and many politicians have claimed that taxing health benefits would hit the wealthy hardest, while sparing the poor. But exactly the reverse is true. For a poor, insured family a tax on their health benefits would take almost one-fifth of their total income."

Dr. Steffie Woolhandler, co-author and professor of medicine at Harvard, said: "Instead of taxing benefits, politicians should embrace the only affordable option for universal coverage: a single-payer, Medicare-for-all program. Single-payer would save $400 billion annually by simplifying administration, enough to assure quality care for everyone. We cannot afford to keep wasteful private health insurers in business, and pay for it off the backs of working families."

Drs. Himmelstein and Woolhandler are co-founders of Physicians for a National Health Program, an organization of 16,000 doctors and medical professionals who advocate for single-payer national health insurance.

Reference: "The Regressivity of Taxing Employer-Paid Health Insurance," David U. Himmelstein, M.D; Steffie Woolhandler, M.D., M.P.H. New England Journal of Medicine, August 19, 2009.

For more information: The study is available from the New England Journal website at http://healthcarereform.nejm.org/?p=1521
and www.pnhp.org


Related Content

News | Ultrasound Imaging

June 26, 2025 — FUJIFILM VisualSonics Inc., a provider of ultra-high frequency ultrasound and photoacoustic imaging ...

Time June 27, 2025
arrow
News | Imaging Software Development

June 12, 2025 — GE HealthCare has announced the combination of GE HealthCare’s proprietary features and algorithms with ...

Time June 12, 2025
arrow
News | Teleradiology

May 21, 2025 — Konica Minolta Healthcare Americas, Inc and NewVue have announced the introduction of Exa Teleradiology ...

Time May 21, 2025
arrow
News | Artificial Intelligence

May 15, 2025 – Royal Philips, a global leader in health technology, has released its 10th annual Future Health Index ...

Time May 19, 2025
arrow
News | Artificial Intelligence

May 14, 2025 – Bialogics Analytics Inc., a leader in radiology informatics, has introduced its new AI solution AI ...

Time May 16, 2025
arrow
News | Radiology Business

The issue of sustainability in healthcare has gained increasing focus over the past several years. During a 2022 plenary ...

Time May 06, 2025
arrow
News | Artificial Intelligence

May 6, 2025 — NewVue.ai, a leader in cloud-native radiology workflow orchestration, and MD.ai, a pioneer in AI-enhanced ...

Time May 06, 2025
arrow
News | SIIM

April 14, 2025 —The Society for Imaging Informatics in Medicine (SIIM) Annual Meeting is set to take place May 23 to 25 ...

Time April 14, 2025
arrow
News | Artificial Intelligence

Feb. 4, 2025 — Riverain Technologies recently announced it expanded across eight countries in 2024 and added nearly 50 ...

Time February 04, 2025
arrow
News | Artificial Intelligence

Dec. 12, 2024 — At RSNA 2024, Careverse officially made its debut, exhibiting in the AI Showcase area, sharing its ...

Time December 18, 2024
arrow
Subscribe Now