Here is an example of convoluted thinking if there ever was one. This is taken from an Aon Consultants bulletin.
“Health Care Reform to Have Indirect, but Positive Effect on Social Security
At an August 5 Treasury Department briefing about the Social Security Board of Trustees’ Annual Report, officials from the Obama administration said that to the extent that health care reform reduces the share of compensation allocated to health care costs and increases taxable wages, more payroll taxes will be paid into the Social Security trust funds.”
Are they serious? Is this a joke? Perhaps it is just rambling by a collection of naive individuals who have never worked in the real world.
First, for employer plans there is nothing in the legislation that will lower health care costs. Quite the opposite is true. Employees may be paying more in premiums and out of pocket costs, but that cost shifting is not going to increase taxable wages. Second, employers have been battling health care costs for years and only have succeeded in some cases in lowering the rate of increase temporarily. Certainly that has not resulted in “savings” showing up in higher wages.
Cost shifting to the private sector, higher administrative costs and new benefit mandates on health plans all combine to make it less affordable to offer such plans and more difficult to offer higher wages.
Isn’t it interesting though that administration officials can make a connection between one out of control entitlement and higher costs for workers created in another.
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