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Home Publications Blogs Beat the Press Senator Cruz's Health Care Plan Costs Taxpayers $8,000 a Year

Senator Cruz's Health Care Plan Costs Taxpayers $8,000 a Year

Thursday, 24 October 2013 07:06

A New York Times piece profiling Senator Ted Cruz's wife, Heidi Nelson Cruz, allowed an erroneous comment from the Senator's staff go uncorrected. The piece noted that Senator Cruz is on his wife's health care plan which it reported as costing $20,000 a year. It then presented a statement from a spokesperson for Mr. Cruz:

"The senator is on his wife’s plan, which comes at no cost to the taxpayer and reflects a personal decision about what works best for their family."

The cost of health insurance is tax deductible. Assuming the Cruz's are in the highest tax bracket, the tax deduction for Senator Cruz's health care plan would be more than $8,000 a year. This is far larger than the subsidy that most people would receive in the exchanges.


Thanks to Samuel Adenbaum for calling this one to my attention.

Comments (10)Add Comment
written by Alex Bollinger, October 24, 2013 7:29
But when rich people get subsidies they don't cost the taxpayer anything. It's just like how military spending doesn't add to the deficit.
written by Chris E., October 24, 2013 7:31
Uually when you waive healthcare contribution from an employer you get extra in pay...I wonder if there's any evidence of that for government employee like Cruz?
Net Cost to Taxpayers Still Unknown
written by robertsalzberg, October 24, 2013 7:52
Normally Senator Cruz and his family would be getting subsidized health insurance from the federal government which considering Senator Cruz has 2 children would cost taxpayers a lot more than $8000.

But sInce Senator Cruz's wife is an executive at Goldman Sachs with super premium health benefits, the Cruz family likely saves little if any taxes from deducting their co-pays. It's likely Cruz's wife's plan is worth $20,000 just for Senator Cruz, so taxpayers are subsidizing the Goldman Sachs deduction of around $80,000 for the Cruz family which at the corporate rate of 35% would be $28,000 a year.

So net cost to taxpayers is really unknown without more details....

written by jeff fisher, October 24, 2013 8:42
"Usually when you waive healthcare contribution from an employer"

Really? I have never even heard of that happening.
if you start counting...., Low-rated comment [Show]
More subsidies
written by FinanceGuy, October 24, 2013 9:52
Senator Cruz's wife's employer is one of the largest beneficiaries of government funded welfare on the planet. The cost to taxpayers of her health care goes far beyond the tax subsidy to her employer for its health insurance plan. It includes not merely the AIG bailout that kept Goldman in business and the bizarre practice of allowing Goldman to borrow from one branch of our government and then lend our money back to us at a higher rate, but the entire complex of too-big-to-fail subsidies and legal rules allowing capital market players to skim from the uninformed or merely productive sectors of the economy.

Moreover, as Dean reminds us from time to time, at least half the cost of the Cruz's insurance plan is a cost to the taxpayers of the inefficient and unfair health care system that Senator Cruz wants to enshrine in amber.
And he's still Canadian
written by DaveTO, October 24, 2013 11:21
Until he voids his Canadian citizenship he can also just cross the border and walk in to any clinic, hospital or private practise in the country and get treated for free, and purchase much lower cost meds as prescribed.
So his efforts to deny Americans the opportunity of taking responsibility over their own health insurance are especially galling.
I Want More: From Working Folks
written by James, October 24, 2013 11:49
Yes, Chris is right. I think for Federal benefits, OPM offers low, standard, and high options and if you should forgone any coverage to Federal coverage (they don't have to contribute or pay your premium at all), they will give you $.

I know of several folks they decide to take the $ from their Agencies and go with their partners' plan.

Cruz and his family could well be using pre-tax dollar to pay for their plan in term of premium as well.

This is called hypocrite - someone crying we cannot afford paying $100 in foodstamps to children but the gov't could afford to subsidize me and my well-to-do family.

maybe yes, maybe no
written by sirocco, October 25, 2013 10:46
If Cruz's wife has to pay an additional $20,000 a year for his insurance, and it is deduced from her paycheck, then she would pay taxes on it. However, this seems unlikely. Employees high up the totem poll get many benefits. Certainly she would not pay the entire amount. If it is included as outright benefit, where nothing is deducted from her salary, then it would not be taxed. In the good old days when most health insurance was just paid by the employer with little or no withholding from the employee, that was true for most people. Now it is a rare employer who covers everything, especially for families. While I despise Cruz, this seems like a rather overblown criticism of him.
Hate to bust your bubble...
written by EconomicNudity, October 28, 2013 9:48
Most taxpayers receive little benefit, if any, from medical expenses. They usually need to be extraordinarily high to receive a deduction. If his wife make as much as he does - they earn roughly $350,000 together ($175k each). In 2013, medical expenses must exceed 10% of AGI before any are deductible. This was 7.5% in 2012. Therefore, medical expenses must exceed $35,000 before he receives any benefit...

The average person doesn't receive much benefit from medical expenses. Situations where special needs arise are where we see most use of this deduction.

I noticed this post on Calculated Risk and see the misinformation piling up. I'm sorry, but this is factually incorrect.

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About Beat the Press

Dean Baker is co-director of the Center for Economic and Policy Research in Washington, D.C. He is the author of several books, his latest being The End of Loser Liberalism: Making Markets Progressive. Read more about Dean.