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Max Baucus wants to tax your health insurance benefits

[Readers, do play the YouTube. It's comedy gold!]

Bloomberg:

The Senate Finance Committee provided an early glimpse of ways Congress might pay for the overhaul of health care President Barack Obama wants, outlining a range of options that included new taxes on employer-provided health insurance and levies on sugar-sweetened drinks.

You know how poor people are all fat? It's the soft drinks. All this is really for their own good! [Commenters: Let's not focus on the snark, mkay? The point is class bias, not fizzy flavored water]

And you know the other problem? The peasants have too much health care. I kid you not:

In a document released yesterday, committee Chairman Max Baucus, a Montana Democrat, and Senator Charles Grassley of Iowa, the panel’s top Republican, said taxing health benefits would address so-called “Cadillac plans” they said promote overuse of health-care services and boost the cost of care. The two senators also proposed scouring Medicare and other aspects of the U.S. health-care system for cost savings.

I'd sure like to meet somebody with one of those "Cadillac plans." [Noting, in passing, the meme-ic echo to the lies Reagan [crosses self] used to tell about welfare Cadillacs] Somehow, I don't think Baucus has in mind the Cadillac plans of CEOs -- who can actually spend "several hours" talking to their doctors when they get a checkup under their "Executive Health Programs!

“Health-care reform must preserve the things Americans like about our health-care system,” [Especially the insurance companies! Not] Baucus said in a statement. “But it must also begin to slow the rapid increases in health-care costs that take up more and more of the budget for American families and businesses.”

Meanwhile, the FKD aligns the pieces on the board:

1. Tax previously untaxed employer-based health insurance benefits, and

2. Use the new taxes to subsidize the public option uninsured, while

3. Painting a big bright target named "welfare" and "entitlement" on the back of the public option for the bad cops, the Republicans, to shoot at, therefore

4. Ensuring that the public option is never properly funded, which will

5. Ruin its reputation, just like Medicare Part D (privatized) devalued the Medicare (public) brand, so that

6. The health insurance parasites keep sucking their fees, and

7. the health insurance CEOs kick back the FKD a nice fat percentage in campaign contributions (besides maintaining the ecology of K Street in good looting order).

Enough Dimensions for ya?

Oh, and never mind that the health insurance parasites take 30% of the health care dollar for CEO salaries, profit, and administration, vs 3% for a public plan, saving at least $350 billion a year. Never mind that single payer has worked everywhere it's been tried, and delivered far better value for money. Never mind that the administration wants to experiment, instead of adopting what's known to work. Never mind that single payer is the science-based solution.

Gotta make sure those health insurance parasites keep sucking!

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MOBlue's picture
Submitted by MOBlue on

reform is to eliminate the any employer paid health insurance or health care for Congresscritters. If they had to experience the same hassle as the rest of us peons, real healthCARE reform might just be possible.

dblhelix's picture
Submitted by dblhelix on

that 1-7 is the optimistic view. They can easily skip 2-5.

Note that the buzz is compliance via tex returns, starting in 2013, right after the pres election. At that point, the taxing of health care benefits will be across the board. Nudge, nudge, nudge.

Submitted by Anne on

One, Think Progress is reporting that the insurance industry is going full bore against any public plan in a new campaign that will launch a series of ads:

Last week, the health insurance lobby met with President Obama and pledged to “work together” to provide quality, affordable coverage and access for every American. In less than five days, the insurers not only broke that promise, but the Washington Post reports that Blue Cross Blue Shield of North Carolina has drafted ads aimed at smearing the President’s proposed public health insurance plan.

The Post obtained a copy of the story boards for the ads attacking the public plan. The description for one ad depicts a woman trapped in a hallway of locked doors:

[The mother's hand tries another door, as her child begins to get visibly anxious and restless. Still no luck. In rapid-fire succession, we see their hands trying a series of doorknobs. The pair is seen making their way to the next door, as the tension builds. It seems as if their search may be fruitless.]

While “innocent-sounding piano music, vaguely reminiscent of a nursery rhyme” plays in the background of this increasingly dramatic scene, the narrator intones:

Yes, this has Frank Luntz written all over it.

I can’t help but think this will be a successful campaign, and that Obama will find more things to concede on.

Two, from the Baltimore Sun today:

Maryland is poised to jump ahead of the rest of the nation in health information technology on Tuesday when Gov. Martin O'Malley signs a bill intended to coax doctors into using electronic medical records.

The computerized files are seen as the foundation of a national health information network that proponents say will improve care, advance medical knowledge and save the country tens of billions of dollars annually. But with the startup costs to individual doctors in the tens of thousands of dollars, many smaller practices have been slow to move from clipboard to computer screen.

With today's bill signing, Maryland will become the first state requiring private insurance companies to offer doctors financial incentives to adopt the technology, state officials say. Doctors who do not bring an electronic medical records system on line by 2015 could face penalties.

"This is where government and private health care providers can come together to really improve not only the quality of care but also, hopefully, create some costs savings as well," O'Malley said. "Health IT is the future of health care in our country, and we want Maryland to lead the way."
The bill also requires the state to develop a health information exchange, a computer network that would link all of Maryland's physicians, hospitals, medical laboratories and pharmacies. It could be linked in turn with those of other states to create the national network envisioned by President George W. Bush and affirmed by President Barack Obama. O'Malley calls it "creating one common gauge of railroad track."

If someone reads the entire article and can find anything that suggests the private health insurance companies will be reducing premiums with any of the cost savings, please let me know.

Submitted by jawbone on

takes the worst things they do with HMO's and denial of coverage and yell that a government healthcare plan will do exactly the same things.

Will it work? They've got the deep pockets to pay for loads of ads. And the Dems don't have any passion or leadership for really delivering health CARE.

Well, if we only had a Democratic Congress and a Democratic president....

Submitted by jawbone on

rep knew nothing, transferred me to a very nice young man at the Senate Finance Committee, who told me he doesn't know, but it might be in a paper published yesterday; however, I couldn't find anything nearing specific (pps. 16-18).

I asked why single payer with its obvious savings was not being considered, got the usual, but very nice, demurral to answer. I did get an emal address directly to the Finance Committee, Matt, but, per the committee web site, this is the Public Comment address and submissioms must be in PDF or Word files.

To submit comments on the Senate Finance Committee’s Health Reform Policy Options email PDF or Word files to Health_Reform@finance?dem.senate.gov

It's beyond time for some phone calls, but I'm going to call Schumer and Grassley, plus my own NJ senators. Actually, we need to be storming the barricades, and if that fails get out the torches and pitchforks. (But, like who has pitchforks anymore?)

Max Baucus 202 224-2651

Charles Grassley 202 224-3744

Charles Schumer 202 224-6542

List of all the members, by party

Don't Dems get it? If they fail on healthcare, they're going to lose seats--possibly retain majority, but lose seats. Is the BHIP* money so crucial to them that they'll risk it? Uh....

Guess we'll have to wait for both a Democratic Congress and a Democratic president....

8HIP--Big Health Industry Playahs

Submitted by jawbone on

income levels, actual benefits...apparently. It also allows our politicians to avoid showing their hands about what they have in mine for the "little people."

The Economic Policy Institute posts an article by Elise Gould which notes that if cost is the defining factor, workers at small businesses and businesses with an older work force would end up paying more than workers at large corporations or businesses with younger workforces, since small busineses pay more on average and older workers cost most to insure in general.

This idea, of limiting the tax exclusion that now exists for participants in the most expensive employer-sponsored coverage, is the subject of our new research. The findings of this study, conducted by EPI Health Policy Research Director Elise Gould and CBO Analyst Alexandra Minicozzi, will be published in a forthcoming edition of Tax Notes. A more in-depth analysis is available in this EPI Working Paper (PDF).

As outlined below, the research shows that the burden of the proposal to tax high-priced health coverage will fall heavily on two groups who are least able to bear it: workers in small firms and workers in employer pools with higher risks, such as those with a high percentage of older workers.

First, small businesses are paying high premiums for the insurance they provide to their employees—not because the plans are especially lavish, but because they include too few employees to constitute the broader risk pool that would qualify them for lower costs for the same coverage.

Second, employees whose characteristics cause them to be classified as higher risks make them more expensive to insure. Adding a tax on top of the cost of premiums they and their employers pay will likely drive more of them into the ranks of the uninsured.

Many call these high-priced insurance plans “Cadillac” coverage, but that is a misnomer. The high price may stem not from any bells and whistles in their coverage but from a fundamental inequity in the way that insurance for these groups is currently priced. This policy idea is a blunt instrument that may do harm to the very people we should be striving to help.

The sidebar at this article has intersting titles to explore.

A report at CNN Money by Jeanne Sahadi points out that the goal of taxing higher cost insurance provided by employers is to increase taxes, but the effect may well be to drive workers to choose, if they have choices, lower cost, less comprehensive plans. And Obama said one of his goals is comprehensive healthcare....

The health care exclusion is the federal government's single biggest tax expenditure. In other words, Uncle Sam forgoes more potential tax revenue from this tax break than any other. The exclusion was worth $246 billion in potential revenue in 2007, according to the Joint Committee on Taxation. That number is expected to increase every year as health care costs rise.

But imposing a cap isn't likely to raise anywhere near that kind of money although it may lower costs in the long run because of that old show stopper: human behavior.

"The goal of the cap is to get people to buy less comprehensive plans," said Paul Fronstin, the director of health research at the Employee Benefit Research Institute.

Translation: Workers who have to start paying tax on a portion of their health care compensation may opt for lower-cost, less comprehensive plans to escape having to pay any tax. And that would curb how much revenue the federal government could raise overall.

"When they get down to the numbers, it won't raise as much money [as they might need]," Fronstin said.

An underwriters' newsletter pulls out these points about the Baucus/Grassley paper on how to pay for healthcare:

The current tax-free status of group health benefits “encourages employers to offer ‘Cadillac plans,’ or overly generous health care plans that promote the overuse of health care services and drive up health care costs,” the authors of the paper write.

The authors write that Congress could address that concern by capping the exclusion based on the value of health insurance policy or the income level of the employee eligible for the exclusion; capping the exclusion based on both the value of the health insurance policy and income level; or converting the employer-provided health insurance exclusion to an individual tax deduction or credit.

The government could, for example, limit the value of the group health coverage excluded from an employee’s gross income “to the dollar amount that would initially be calculated as an amount equal to the actuarial value of the Federal Employee Health Benefit Program standard option,” the authors of the paper write.

The government also could modify a special deduction that Blue Cross and Blue Shield plans get; put new limits on HSA contributions; change or repeal the FSA and HRA exclusions; or limit the “qualified medical expense” definition by, for example, excluding nonprescription drugs, the authors of the paper write.

Interestly, the term "Cadillac plans" seems to have changed in usage over the years. In this NYTimes article from 1986, it refers to the fact that businesses were offering better plans to highly paid executives and Congress was looking into more equality in coverage:

WITH a push from the Treasury Department, Congress has ordered employers to expand their offerings of health insurance to all types of employees - including lower-paid and part-time help.

The new tax law holds managers responsible for evaluating health benefit plans, as well as group life insurance, and assuring that executives do not get expensive benefits, often called Cadillac plans, while other employees remain unprotected.

Today, "Cadillac plan" seems to refer to plans which do not force people to limit use of their insurance programs, to forego healthcare because it is too expensive to actually use their plans, and thus to put off care until it becomes extremely necessary.

For some income levels, a copay of any amount may make it prohibitive or difficult to actually go to a doctor, have lab work and tests, or to utilize necessary physical therapy.

That seems to be the current approach, which is in direct opposition to what Obama campaigned on. Go figure, huh?

(My emphasis throughout quotes)

a little night musing's picture
Submitted by a little night ... on

When I try, I get this:

accept sender's friend request

I'm totally confused.

And I could so use some comedy today!