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Holding down costs by denying care

Bob Herbert via BTD:

The bill that passed the Senate with such fanfare on Christmas Eve would impose a confiscatory 40 percent excise tax on so-called Cadillac health plans, which are popularly viewed [thanks to our famously free press working together with the Democratic Party] as over-the-top plans held only by the very wealthy. In fact, it’s a tax that in a few years will hammer millions of middle-class policyholders, forcing them to scale back their access to medical care.

Which is exactly what the tax is designed to do.

The tax would kick in on plans exceeding $23,000 annually for family coverage and $8,500 for individuals, starting in 2013. In the first year it would affect relatively few people in the middle class. But because of the steadily rising costs of health care in the U.S., more and more plans would reach the taxation threshold each year.

Because the tax isn't indexed. Anybody think that's an accident? Herbert doesn't:

Within three years of its implementation, according to the Congressional Budget Office, the tax would apply to nearly 20 percent of all workers with employer-provided health coverage in the country, affecting some 31 million people. Within six years, according to Congress’s Joint Committee on Taxation, the tax would reach a fifth of all households earning between $50,000 and $75,000 annually. Those families can hardly be considered very wealthy.

Proponents say the tax will raise nearly $150 billion over 10 years, but there’s a catch. It’s not expected to raise this money directly. The dirty little secret behind this onerous tax is that no one expects very many people to pay it. The idea is that rather than fork over 40 percent in taxes on the amount by which policies exceed the threshold, employers (and individuals who purchase health insurance on their own) will have little choice but to ratchet down the quality of their health plans.

These lower-value plans would have higher out-of-pocket costs, thus increasing the very things that are so maddening to so many policyholders right now: higher and higher co-payments, soaring deductibles and so forth. Some of the benefits of higher-end policies can be expected in many cases to go by the boards: dental and vision care, for example, and expensive mental health coverage.

Proponents say this is a terrific way to hold down health care costs. If policyholders have to pay more out of their own pockets, they will be more careful — that is to say, more reluctant — to access health services.

Which is the crazy "moral hazard" idea. Honestly, how many people do you know who would rather spend time in the doctor's office or, God forbid, the hospital, than do almost anything else?

So denying care means a few more peasants die, but that's a feature, not a bug. Understand this about Versailles: They hate us. They really hate us. This carefully crafted turn of the screw just shows it, again -- as if the entire health care insurance debate didn't show that already, in excruciating detail. After all, since not implementing the plan until 2014 means a few more tens of thousands will die so that the insurance companies have time to figure out how to game the system, the hate really couldn't be more clear, could it?

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carissa's picture
Submitted by carissa on

that it came from the same people who came up with Limosine Liberal or Welfare Queen.

Bryan's picture
Submitted by Bryan on

The AMT was designed to stop people from using loopholes to eliminate their tax liabilities, but it was not indexed, and despite numerous bills passed to raise the level at which it kicks in, it still isn't indexed, because some people want it struck off the books and fight indexing all the way.

This is another "cunning plan" to control the people. The idiots at the top think the peasants are abusing health care. That's why it's so expensive. It's not the insurance company profits, the $250 for a half liter of salt water, the inflexible guild system that makes becoming a health care professional so expensive - no, it must be a lot of hypochondriacs who are over-using the system for minor problems.

If people would just make reasoned choices after the fire department extracts them from their crushed vehicle to use only the lowest cost hospitals and physicians, the system would be a lot cheaper. [/sarcasm]

madamab's picture
Submitted by madamab on

For my money, I don't think they believe their own Randian rhetoric.

They simply use it to appeal to Social Darwinist types who hate their neighbors as much as Versailles does.

I agree with Lambert. It's on purpose.

basement angel's picture
Submitted by basement angel on

Most people who are getting healthcare through their employer don't know what the whole premium is. That strikes me as a pretty low threshold. There are going to be a lot of people shocked to learn that theirs is a "cadillac" plan. I'm sure of that.

This is also a hammer thrown directly at unions. It's bad.

scoutt's picture
Submitted by scoutt on

Are any of the Obama fan club sites discussing this article? I went on KOS for 2 secs and saw the usual repubs are ratf*ckers diaries...

Submitted by jawbone on

insurance costs? or also to individual plans?

I've heard, but have no firm evidence, that it's the former.

Now, amazingly, Obama recently (60 Minutes?) said that people with Cadillac Plans were paying for care they don't get. WTF??? And that the Senate plan would "spare" them from that awful fate and waste--by taxing them on the rates higher than X. Somehow....

People with high deductibles and copays are paying for care they don't get, because they can't afford the deductilbes and copays or never reach the point where they get any reimbursement from the insurance companies. Anyone hear Obama criticize THAT???

Yes, indeed. Now, somehow middle and working class people with decent health insurance coverage are mooching on...what?...who?...with those awful Cadillac Plans. Well, the Dems are really gonna learn them what's wrong with having decent health care coverage! Yeah, Dems! Yeah, Corporatists!

Yowser.