Talent Management - October 2008 - (Page 31)

Obama has to date proposed no changes in the current tax treatment of health insurance coverage. Retiree Health Beneﬁts Neither candidate has put forward a detailed plan to control the spiraling costs of the federal Medicare program. But the candidates have suggested a few measures that could arguably produce cost-savings for the program, though not everyone agrees. McCain has proposed the federally ﬁnanced subsidy for Medicare Part D prescription drug coverage be reduced for higher-income beneﬁciaries, in effect requiring such beneﬁciaries to pay a greater share of the costs. This approach already has a precedent. In 2007, income-based premiums for higher-income beneﬁciaries became a requirement under Medicare Part B. Obama advocates having Medicare directly negotiate pharmaceutical prices for Medicare beneﬁciaries, something not permitted under current law. Concerning early retirees who have not yet reached the age for Medicare eligibility, the candidates believe this group will beneﬁt from their broader proposals to expand health coverage access. Obama’s plan to generate a wide array of new public and private plan options would potentially create new sources for pre-65 retirees to purchase health insurance. Today, pre-65 retirees without employer coverage have few good options to purchase affordable health insurance, and providing health beneﬁts to pre-65 retirees is costly for employers who do provide coverage. McCain said his reforms would create more ﬂexible health insurance options and, consequently, would “automatically bridge the time between retirement and Medicare eligibility.” Talent Management Implications Will employers and employees experience lower health care costs if the candidates’ health reform proposals are fulﬁlled? Will either candidate’s proposal result in actual cost reduction? Some health policy analysts assert neither candidate’s proposal gets very far to contain spiraling health care costs. Despite assertions to the contrary, it is unlikely there will be actual reductions below current spending levels for employers. While both proposals contemplate federal subsidies, the larger such subsidies are, the more likely it could result in additional taxes to ﬁnance them. Realistically, the best employers and employees can hope for is a reduction in the rate of increase in future health care costs. Even that is largely uncertain, and most large employers have yet to be persuaded. So far, most tend to believe health care reform may actually raise national health care costs, not reduce them. Are the candidates’ proposals politically feasible? It takes more than a president to reform the health care system. The composition of the new Congress and reactions of stakeholders, including employers and employees, will inﬂuence how far the reforms advance. For example, is it politically feasible Congress will eliminate the current tax exclusion for employer-provided health beneﬁts to ﬁnance a replacement health care tax credit? Changing this long-standing tax policy would represent a dramatic change, with potentially signiﬁcant political repercussions. Is it feasible to achieve savings from universal coverage — and reduced cost shifting — if there are no mandates to maintain or provide coverage, or if the only mandates fall on large employers? There is a very vigorous policy debate regarding both the advantages and harms mandates impose, and the pros and cons of an individual mandate vs. an employer mandate. COMPENSATION continued on page 55 http://www.spectrumhr.com http://www.spectrumhr.com

Table of Contents Feed for the Digital Edition of Talent Management - October 2008

Talent Management - October 2008 Editor’s Letter Contents Human Performance Leading Edge Foundations The Three Pillars of Executive On-Boarding Role-Based Assessment: Thinking Inside the Box Who's Going to Speak Up for Health Care? Obey the Push to Automate Managing the Star Performer No One Wants to Work With Adopting a Mutual-Funds Model for Talent Management Hewlett-Packard: Simple Talent Management in a Technical World Team Effort Pays in Talent at London Business School The Employee Survey: What’s in It for Me? Why Most Managers Are Stuck Advertisers’ Index Editorial Resources Full Potential

Talent Management - October 2008

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