Sometimes you see an idea delivered with so much clarity and succinctness that it makes you stop and wonder why no one has said it before and then repeated it over and over until it sinks in. Such an idea confronted me this morning as a read a post on the Tax Update Blog with the intriguing title: Now that Health Savings Accounts are growing in popularity, will they be snuffed?
The article quotes an advisor to President-elect Obama as saying that “medical benefits that shift costs to employees” would not be consistent with the upcoming President’s position on health care.
But here comes the really good part of the post; a retort that is so simple and clear that it cuts right to the heart of the issue:
Hey, Mr. “advisor to the President-elect”: employees already bear 100% of the costs of medical benefits. Benefits aren’t paid using the cash that grows on a magical benefits tree that grows in the H.R. department. When hiring an employee, an employer looks at the total cost of the employee package – wages and benefits. If you want to put more benefits in the package, you have to take out wages to make room for them. More benefits = less wages. If you have to make a profit to keep going – a constraint unfamiliar to many in the public sector – there is no third way.
It just doesn’t get any more simple than that.