Managed care
In terms of using such a plan, unlike an HMO plan, which has a copayment cost share feature (a nominal payment generally paid at the time of service), a PPO generally does not have a copayment but offers a deductible and a coinsurance feature. The deductible must be paid in full before any benefits are provided. After the deductible is met, the coinsurance benefits apply. If the PPO plan is an 80% coinsurance plan with a $1,000 deductible, the patient pays 100% of the allowed provider fee up to $1,000. The insurer will pay 80% of the other fees, and the patient will pay the remaining 20%. Charges above the allowed amount are not payable by the patient or insurer but written off as a discount by the physician.
Predicted effects of the FairTax
Like the home mortgage interest deduction, charitable giving receives preferential treatment under current tax law allowing individuals to deduct the donation, to certain charities, from taxable income. Someone paying a 25% income tax rate would receive $250 back from the government for a $1,000 donation. While there is no deduction for payroll taxes and most do not itemize the deduction for full benefit, this encourages households to donate more of their income to charity than would otherwise be the case. As the FairTax would only tax new retail purchases, donations to charity would be made with untaxed income (comparable to a deduction on both income and payroll taxes). The FairTax would also remove the prohibition of political speech by non-profits, therefore removing the threat to non-profit status. Taxable property and services purchased by a qualified non-profit or religious organization 'for business purposes' would not be taxable.