Can someone explain to me why a tax on health insurance policies over $26,000 annually is the new hill to die on? For some perspective, in West Virginia, the Per Capita Income in 2001 was $22,000. Isn’t this cadillac tax just a sort of correction to the tax emption that employers get?
Explain what I am missing (and yes, I do understand that many unions negotiated for good benefits in exchange for lower wages. That does suck.). In general, I hardly find this something that I would expect to enrage liberals/progressives. Is it just because Obama flip-flopped on this issue and it gives everyone another opportunity to get their sad face on? Or is there more to this I do not understand.
Prattlehorn
Well, it really really does suck that these “Cadillac” (i.e., adequate) health care plans were given in exchange for wage freezes/cuts…
…and now they’re being taxed!
Suckas!!
robertdsc
I read a tidbit last night about this tax that I hadn’t noticed before. The tax will be on insurance companies, not policy holders. This was from the President’s interview on NPR yesterday.
GOS link.
The Prez:
I know the union impact talking point, but how does taxing the insurance companies mean bad things for middle-class people?
NobodySpecial
For some, undoubtedly.
For some union guys, though, like you intimated, this is a big kick in the nuts. I figure they have a right to complain if anyone does. And yeah, Obama giving up THIS issue too is nothing new in the health care debate.
If you want to bitch that the employers don’t pay tax, why not just tax the employers instead of taxing their employee’s benefits? If even 10% drop their insurance due to the tax, that’s a net loss for everyone who wants good universal health care. Is that REALLY what the ‘pass it or die’ crowd REALLY wants?
EDIT – sure, Robert. Who you gonna believe, those mouthbreathing idealists over at the GOS or John Cole?
/snark
Nim, ham hock of liberty
You probably know about Bob Herbert’s column savaging this tax…
wasabi gasp
Shirley, you mean casket.
Maude
That’s a Ford Focus tax. It depends on the amount of the tax. Considering if someone doesn’t have insurance and earns $26,000, it’s not bad. What would coverage cost out there in the free market economy?
LT
Why do you insist on calling it a “hill to die on”? Can people not oppose something, for one reason or another, in hopes that it may influence policy?
And: Maybe you should ask Obama. He was against this during the campaign.
And I’m a little confused as to whether it taxes employers or employees, or if it adds up to the same.
Tom Hilton
Making a regressive subsidy less regressive is the exact opposite of what progressives want to do. Um, isn’t it? Oh…never mind.
mcc
I’m still not not really sure whether the excise tax is something to oppose at all. The excise tax seems really risky (for example if premiums continue to rise faster than inflation without bound– although it seems like in that situation we’d be screwed pretty bad anyway) but it also seems to come with potential upsides. It could put downward pressure on premiums and as I understand the CBO thinks it would result in higher wages because businesses would be less likely to just dump their payroll into the insurance column. Meanwhile the tax is paid by employers, not individuals.
If the House can somehow convince the Senate to agree to a millionaires tax instead, okay, neat, but it’s really unclear to me under which proposal we’re better off.
les
This is just complete horseshit, as a “progressive” bugaboo. It’s a money source, if the status quo in increasing insurance co. admin/profits continues, and it is not levied on average working folks–if you believe the line workers at Ford have $26K/yr health plans, share the drug; it’s an actual incentive for employers and insurance companies to negotiate down health insurance costs; and it’s a money transfer, to the extent it actually happens, from the better off to the less well off. Anathema to kwak and raven, but not so bad for actual, you know, progressives and uninsured/underinsured.
Midnight Marauder
@robertdsc:
Wow. I hadn’t seen or heard that at all. Thanks for the link. I think I read that diary the other day. Also thought this was interesting from the same NPR interview. It’s what comes after the quote you cited:
Ducktape
If you’re a self-employed Boomer in a major state, $8,000 is not a Cadillac. I pay about $650 a month for a $1,500 deductible PPO play from Blue Shield in CA. And that’s paid from taxable income, too.
In the last 10 years (especially the last 5) before you qualify for Medicare, you are royally hosed. Making matters worse, there really isn’t much ability to say “Screw Blue Shield – I’ll shop around” because everything I ever had while insured by them is a pre-existing condition when applying to someone else.
BTD
John do you support the Senate excise tax over taxing wealthy people who earn over 500,000 a year?
Because that is actually the question right now.
“Hills to die on” is silly hyperbole.
It is a question of what you prefer. Could you explain why you prefer the excise tax to the surtax on persons earning over $500,000 a year?
Ed Drone
My understanding is that this tax raises $150B, but the soak-the-rich tax in the House bill raises $400B+, making that much better in terms of the budget deficit. I’d think that this would be a no-brainer, but I don’t play more than 3-dimensional chess, so what do I know?
Ed
ThatPirateGuy
You are aware that the bill means they can’t discriminate against you for pre-existing conditions right?
Winston Smith
My benefits have low co-pays and no deductible and cost half of the tax threshold. I’d like to see Bob Herbert put some real numbers out there.
My wife has Fibromyalgia, which could get expensive and previously uncoverable. This bill will costs us nothing extra and save us from potential ruin.
FormerSwingVoter
@Nim, ham hock of liberty:
You can ignore the opinion of anyone who uses the phrase “confiscatory tax”, because he or she is clearly an idiot.
You’re welcome.
Welfare States
Can anybody explain THIS. Other than the fact that the GOP pond scum are more interested in toeing the party line than actually DOING anything for their constituencies?
http://thinkprogress.org/2010/01/07/health-winners-losers/
MinneapolisPipe
“Cadillac” plans are a significantly inefficient and wasteful way of allocating healthcare dollars. In fact, it doesn’t really even provide significant additional benefit (in terms of health outcomes) to the union members or executives that have it. It’s like paying a mechanic one hour of labor just to shine the tires.
How is this for screwed up taxation: someone working at Home Depot or a local small business making $30,000 without healthcare will get taxed on $30,000.
But someone making $60,000 PLUS a Cadillac plan has the Cadillac portion, which is a form of income, is not taxed on the additional income.
The current system is hardly a form of progressive taxation.
shep
I’m with you, John, let’s tax the living sh*t out of auto workers and fire fighters – follow the money, right?
kwAwk
Because the tax hits only cadillac plans right now will apply towards nearly half of all plans offered at the current growth rate within the next 6 years if the tax isn’t incremented in some way, which at present it isn’t.
Its another back door way to get people into lower grade insurance plans with limiting coverage.
BTD
In addition. I think you know that the excise tax on individual health insurance plans is 8,000 a year. The 23,000 number (not 26,000) is for family plans.
I would add that West Virginia’s Senator, Jay Rockefeller, is a vehement opponent of the excise tax. Presumably there is a reason for that.
kay
@NobodySpecial:
It’s a tax on that portion of the value that is in excess of 23,000 (family).
The national average premium, family of four, is 13,500.
The tax doesn’t trigger until the 23,000 mark.
nwithers
Yet another point is that if progressives swallow horrible compromise #n without complaint, the health care companies will be thinking “hey, that was pretty easy, maybe we can make them eat something even worse!”, and horrible compromise #n+1, which is obviously vital to pass the bill (as everyone in Washington will suddenly believe), will follow shortly.
JGabriel
John Cole:
Isn’t that reason enough to be annoyed by it, and against it?
I don’t see why it necessarily needs to be characterized as “a hill to die on,” or mean that people are opposing it just to be perversely disappointed with Obama. I think people are just sick of giving things up to to get this bill passed.
You have to admit, there’s a certain “Oh, and another thing …” quality to the arguments of the people who keep wanting to strip progressive, or add more anti-progressive, provisions to the bill.
.
Tom Hilton
@Ducktape: For about the 20th time in these threads, the excise tax will not apply to policies sold to individuals.
Sloegin
Bob Herbert nailed it, its a tax that won’t actually raise any revenue, but rather flatten all insurance policies.
Perhaps standardizing policies and coverage across the board is a good thing? I’m still a bit unclear on the utility of such a move; however paying for the thing will still be an issue.
kay
@Ed Drone:
I think they should do both.
Mnemosyne
@Ducktape:
The tax doesn’t apply to you. It only applies to people whose plans come through their employer.
This is probably the #1 error I’ve seen on this: self-employed people freaking out because they’re under the mistaken impression that they will have to pay the “Cadillac tax” even though it only applies to employer plans. I see it over and over again no matter how many times it gets corrected.
J.W. Hamner
Interestingly, the same people who oppose the excise tax are often the same people who complain about insufficient cost controls in the bill.
BTD
@kay:
The excise tax is projected to hit 58 million Americans by 2019. Let’s argue the merits and not pretend it is not going to hit a pretty wide swath of the population.
ruemara
It seems that main reason he wants it in is because it’s one of the few health cost containment measures. Unfortunately I’m not seeing it as hill to die on either. Tax the rich and then pass this measure independently with it better worded and with less venom. & Yes, I am union with a “cadillac plan”. That I can’t afford to use because my union wages are crappy. meh.
BTD
@J.W. Hamner:
Interestingly, the reason why people object to the excise tax is that the cost control trade off – 0.3% projected, is not worth the trade off.
There were much better ways to do cost control that were definitely worth the tradeoff – drug reimportation (0.4%), public option, etc.
The excise tax is not one of them in the opinion of many of us.
Reasonable minds can differ of course.
MTiffany
Speaking only for myself — it’s because Obama never staked out a goddamned position on anything except for “I don’t care about what the Left of the Left wants.” Being “the Left of the Left,” all I can say to Obama is — enjoy your one term, asshole.
Napoleon
Its very simple why this should be opposed. This is just enouther great example of every time the Dems come in to office since LBJ one of the first things they do is stick it to the people who helped them pretty much right off the bat. For Clinton it was putting NAFTA ahead of HCR (something Dionne in a column a week or two mentioned as being a cause of the 94 midterm wipe out, but that someone like Rahm is apparently blind to because he reportedly brags that was the best thing that Clinton did).
The unions supported Obama and sent out fliers (I got one) telling voters that McCain planned to tax the plans but Obama promised not to. Now Obama turns around and sticks it to the unions on this very basis even though you have tax loopholes out there like how hedgefund managers are getting taxed at capital gains rates, but instead of closing those to pay for it Obama thinks that Joe Ironworker should be the one.
By the way, I say all of the above even though I personally think every single deduction like that (or exclusion from income) should go, but if they are going to do that maybe they should do it at a later date and not in the initial bill, and they should do it after they fix glaring problems where the richest people in this country are not paying their fair share before they nick the people who put them in office.
@robertdsc:
Because it then will get passed on to the policy holders as higher premieums. What they are doing is structuring it in a bull shit manner to try to fool the rubes that it really isn’t the employee that will be paying it.
TWP
@BTD: This is EXACTLY right. Which do you prefer, Mr. Cole? I prefer a tax on those making over $500,000 a year. It’s that simple. It’s black and white: tax the rich…or possibly tax the middle class on their healthcare. It’s not a difficult choice.
Unfortunately, Obama’s Last Stand on this issue is making it difficult for everyone. He wouldn’t push for a Public Option, but this is his demand??? A tax on healthcare plans?
Talk about having F’ed up priorities.
acallidryas
Also from the Herbert article:
Personally, I’m highly skeptical that all the companies who are affected by this tax would shift a drop in health insurance money straight into wage increases. And if this does encourage employers to shift to plans with higher deductibles and out of pocket expenses, so that people are paying higher personal costs for health care, isn’t that sort of, you know, the opposite of what this whole health care thing was trying to do?
Wannabe Speechwriter
In a Obama veterans listserv I belong to, it has been taken over by former volunteers who complain how Obama is letting the left down. I got so sick and tired I wrote a response. One of the parts of my response basically said this bill will help poor people and that those opposing it because it didn’t have a public option are telling the poor to f*ck off. I wrote it in a moment of anger and at first I wondered if it was too harsh. Then I got a response from one of the people there. She said basically the health care bill was a “bailout” for poor people who couldn’t afford insurance and it was being done at the expense of the middle class. Mind you, this was from one of Obama’s “left-wing” critics.
I’ve come to believe the people on the left who continue to oppose health care are just irrationally angry people. They are contrarians who will never be satisfied. If there was a public option, they would complain it’s not single-payer. If we were on the verge of passing single-payer, they would complain it’s not a National Health System like in the UK.
So, with the health care tax, it’s the same principal. If it was a tax on plans $40,000 or $80,000 or more, they’d complain it was still too much. They want a reason to complain and since many unions were able to get really good health care plans for some of their workers, it’s an avenue to complain.
I believe this health care bill has real problems and is far from being the comprehensive reform we desperately need. However, all these critics have so blown their wad with their incessant complaining about how Obama didn’t bring back unicorns and how Obama didn’t make there only be sunshine and rainbows, I have gotten to the point where Barack Obama could order the folks at FDL to be sacrificed to Xenu and I would be totally behind it.
I realize there needs to be a strong left in this country so Obama and the Dems have wiggle room to get their policies. However, with all the constant complaining by the left-wing contrarians on TV and on sites like Kos and FDL, it has gotten to a point where any legitimate points they have to make are all but dismissed. How this advances the liberal/progressive agenda, I don’t know.
NanaColleen
The frustration you hear being expressed (though I’m not sure anyone has positioned this as a “hill to die on”) is that — once again, in what is becoming a disappointing pattern — Obama is given a choice to stand for middle class folks or the rich and institutionalized power structure — and he makes the same choice any Republican would make!
The wealthy have been the only ones to benefit at all during the decade of zero — actually going all the way back thirty years to Reagan — and the uber wealthy now hold a greater share of wealth than any time since the age of the barons! So why shouldn’t they be asked to give some of that back?
I don’t think it’s worth defeating hcr over, but Obama can’t plant his flag on Wall Street and expect to see a second term — and he’ll have no one to blame but himself.
And without so many exemptions that the whole policy becomes ridiculous (for dangerous professions, regional variations in cost, etc.) this will actually wind up hitting a lot of folks who don’t have six-figure incomes.
SP
Also, the tax only applies to the excess over the limit. If you have a family plan that’s $24k, the tax is 40% of $1k, not 40% of 24k.
My employer family plan, with no deductible, $10 office copays, no caps, is $14k/yr for an HMO (my portion is 20%) I have the option of a PPO for $19k, which would let me go to specialists without a referral or use out of network providers at some covered percentage (80% I think.) It’s not worth it for the PPO because we don’t have many medical issues, but some people get it for the flexibility.
Now, suppose the cap were $15k so the PPO were over and the HMO under. Would some people still value the PPO enough to pay the extra cost (it would probably rise to 20.6 because of the tax)? Maybe, but it would shift some people’s decision to using the HMO. That’s the idea, get people to go for more cost controlled methods that don’t really affect their health outcomes.
Mnemosyne
@JGabriel:
It’s reason enough to be annoyed by it, but not enough reason to be against it. Yes, it sucks that unions gave up wage increases in return for health benefits, but continuing an unwieldy system that only contributes to skyrocketing costs because they got screwed in the original deal is no reason to not end that crappy system.
If we switched to a single-payer system, they would still have given up years of wages in return for benefits. Is that a reason to be against single-payer?
General Winfield Stuck
@kay:
And before the finish line, I bet they will do both. It’s called compromise and it is being done as we speak. Landrieu comes out threatening filibuster if it’s all one way (rich people tax) and the liberals come out the opposite all way. That’s how folks negotiate in Bartertown.
mcc
So… is this true?
Checking the senate bill text (thomas.gov, H.R.3590, SEC. 9001) the way it’s described as:
So… okay, yeah, unless you have an HSA plan (and it would have to be a sort of ridiculous HSA plan), actually it looks like the health insurance provider does pay the tax.
But: It’s a little bit of a moot point anyway. So microeconomics 101 on taxation is supposed to be that the person who pays a tax isn’t necessarily the person who bears its “burden”, right? It all has to do with elasticity. If demand is elastic– that is, if demand lowers a lot when the price rises a lot– then the burden of the tax will be put on the seller, regardless of who’s actually paying it, because even if the buyer is paying the tax the seller will be forced to lower their prices so the buyer can afford it. If the demand is inelastic– if demand stays the same whatever the price is– then the burden of the tax goes on the buyer, because even if the seller is paying the tax the seller will feel free to just raise the tax to pass on the costs. This is sort of a simple model and I don’t know if it always applies but this is the basic way things work, right? And I’m sort of guessing here but it seems like health insurance is not very elastic. The employer will be paying for it, period.
I guess either way it seems like we can still say:
– There will be some disincentive to health insurance companies to raise premiums past the $8000/$26000 line, since they will not get to keep all of that money
– Even if the health insurance companies are paying the tax the criticism that opponents of the excise tax are making stands, that persons paying more than $26000 for insurance will be getting less health insurance for the money
Am I missing something? Economic theory is scaary
kay
@JGabriel:
I don’t see it as anti-progressive. What’s progressive about giving insurers a tax exemption?
Some of these family plans have premiums that value at 40,000 a year. The employee doesn’t pay tax on it, but 40,000 a year in wage value is being transferred right to an insurance company, on the chance the employee will require that much coverage. He or she is paying it, out of wages, year in year out. That’s a lot of coverage.
It has to be enormously profitable for insurers. It’s lots and lot of insurance premiums coming in, and it’s tax free.
The Congressional plan everyone says they want is worth around 15k a year, for family of four.
Warren Terra
The sad fact is that – as many people noted at the time – just about the only thing McCain was right about suring the campaign was that health care benefits should be taxed as income, as part of a broader reform of the way Americans get health care. The rest of his plan sucked, of course, but he was right about that – the tax exemption for health care is distorting, and it helps to shield people from knowing just how much of their income is going to their insurance. Obama scored points attacking McCain’s proposal to tax health benefits, because it’s bad politics. But it is good policy – or, at the least, it would be if the shift to taxing benefits after 60+ years of not taxing them weren’t likely to be a huge wrench thrown into the works.
Failing a change so we start taxing people on their health insurance (with subsidies, etcetera, of course, so we don’t hurt people), an excise tax on overpriced plans is no bad thing. Arguably, because suddenly taxing benefits as income would be not only politically difficult but also difficult to do without hurting a lot of people no matter how good your intentions, an excise tax on the most expensive plans is a good way to transition towards taxing benefits.
donovong
I just love it when things are so slow over at Talk Left that BTD comes over here to act as Resident Expert.
Speaking for me only, of course.
Osprey
Seriously, if they do tax them, no matter who they tax specifically, that tax will inevitably “trickle-down” and take a chunk of money away from the worker holding the policy. Whether through lower-wages, increased taxes, higher premiums, or lower-quality plans that will have their co-pays and deductibles jacked up.
I’m sick of people getting all high-and-mighty anytime people oppose to this health care bill, like just passing any polished piece of shit and calling it ‘health care’ will make everything better. For who? The only people I see this helping, and that’s a big IF considered they’ll still find a way to screw them, is those people with pre-existing conditions.
Singe payer wasn’t even considered. Fine. Public option? Nixed. Medicare age lowering to 55. Pffft. A myriad of other things we’ve been fucked over on, and now they want to tax people, especially unionized folks, like myself, who have made huge wage concessions for better benefits (namely retirement and health care).
New hill to die on? Why is it anytime somebody is against this piece of shit bill you jump on them?
It has nothing to do with Obama. It has to do with Congress taking an already bad bill and turning it into a corporate giveaway that’s going to fuck a lot more people than it helps.
TWP
“Who would be taxed?
But as the tax proposal takes on an aura of inevitability, pockets of skepticism remain, even beyond labor unions, which are often cast as the main opposition because many union plans would be taxed.
Health analysts recently questioned the assumption that the tax would target only the most lavish insurance packages, nicknamed “Cadillac plans.” The analysts, writing in the journal Health Affairs, found that some less-generous plans could be taxed because they are costly for other reasons. The location of an employer and the type of industry, for example, have as much to do with the cost of plans as the generosity of the benefits and the kind of plan. Smaller businesses, especially those with a preponderance of older workers, tend to have higher premiums, as do certain industries, including the health-care sector.
The Senate bill would phase in the tax more slowly in some higher-cost states and exempt a few industries that tend to have expensive plans, such as mining. But opponents say it is impossible to find a workable way of targeting the tax so it would spare people whose plans are not particularly generous.
“It’s a very blunt instrument,” said former labor secretary Robert Reich. “It makes far more sense on policy and political grounds to tax the top 1 percent rather than sweep in so many people that are paying more for health care, not because they are getting more health care but because they’re older or working for small businesses.”
Read the rest here.
BTD
@Warren Terra:
Why not means test the excise tax? Have it apply to health care policies for persons who make over $200,000 a year?
bayville
C’mon John.
This is a backdoor way for industry to tax middle class, union folks -particularly in the east coast & Cali (i.e. where most of the $$$ is).
True, right now most of these health plans are valued at less than $23,500 – the excise tax threshold for 2014 – but the costs to employers of these union negotiated health plans are growing at radical rates, 5-7 times the rate of inflation in some cases.
In four years, these plans would either be tagged with an excise tax or employers/unions will compromise for cheaper, crappier plans.
One example is that public school teachers/administrators/employees/retirees would most definately be subjected to a not-so-hidden, and in some cases, a substantial tax increase.
http://www.state.nj.us/treasury/pensions/hb_open_enrollment_fall2008/hb-0798-local-ed-comparison-booklet.pdf
Capn America
@robertdsc: “I read a tidbit last night about this tax that I hadn’t noticed before. The tax will be on insurance companies, not policy holders.”
Tax incidence is independent of who nominally pays for the tax. While “insurance companies” will nominally pay the tax, they can just raise the price of the plans to compensate for the tax (their ability to do so depends on the elasticity of demand and supply of health insurance).
John’s right, the tax is simply a corrective for the ridiculous tax exemption we have right now for employer-provided health insurance. $26,000 a year is a good starting point, but ideally it would be ALL plans. Professor Jon Gruber of MIT, the guy who came up with the simulator that the CBO uses the calculate health insurance costs, wrote that “A cap set at the
75th percentile of the premium distribution, so that only insurance plans in the top quarter of the price range were subject to taxation, would raise $330 billion between 2012 and 2019.” [this is from a NEJM article behind a subscriber wall, otherwise I would link] The $330 billion can then be used to subsidize health insurance for the millions of Americans who can’t afford it.
Long story short, the problem with health insurance in the US isn’t that it sucks, it’s that it’s way too generous for the vast majority of people and non-existent for a minority, mostly thanks to the tax exemption for employer-provided health insurance plus state laws that require everything from in vitro fertilization to hair plugs to be covered. A tax on Cadillac plans would help correct the effect of this exemption.
kay
@mcc:
The employer would lower the value of the plan, to bring down the premium. The employee is not going to be paying 26k for a plan worth 18. They’re going to be paying 18. They’re going to be paying for less insurance and they’re going to be buying less insurance.
jl
I read that Obama will fight for this ‘Cadillac plan’ excise tax. I do not like it, though I think pointless at this point to worry about whether this is another betrayal, rather, better to think about the best response we can make to our Congressional overlords.
My take is that this measure is a dinosaur remnant of 30 years of failed US health policy. IMHO, there have been two schools of economic thought on health policy in the US. The first, originally represented by Kenneth Arrow, is that health care is a mix of discretionary consumption and real insurance or unavoidable catastrophes, and the latter was the more important element.
The second, originally represented by Mark Pauly, is that health care is just like hamburgers and TVs and should be analyzed mostly as a consumption good. Comprehensive health insurance was just like a subsidy to buy more discretionary stuff. The second viewpoint has dominated US policy discussion, and its obsession with the idea that with the advent of comprehensive health insurance, people in the US bought too much health care. International evidence contradicts that assumption, at least for primary care.
Part of the policy of introducing more competition into the health care market (an old name for the model was ‘managed competition’ coined by the quasi-economist Alain Enthoven) was to restrict access or increase real costs, or both, to force consumers to make better decisions and correct for the supposedly bad effects of comprehensive health insurance, just as you might introduce a policy to counteract excess consumption of gas due to a gas subsidy.
Even Mark Pauly recently said his model was incomplete. IMHO, the second school of thought was just wrong, but it lives a zombie life among sour misanthropic sensible centrist policy wonks who firmly believe that improved economic welfare can only and must always be achieved by increasing suffering and deprivation among ordinary people who do something useful for society.
My understanding is that this tax was originally supposed to be for rich people. But it has morphed into a tax that will fall on middle income people who, for whatever reason, have higher utilization than deemed appropriately ‘average’. The defenses of it that I have read amount to arguing that it won’t really affect that many people, which is not a ringing defense.
The core issues are whether
These ‘Cadillac’ policies’ costs reflect wasteful utilization or reflect the very high per unit costs of utilization in the US for people who should have higher intensity of care
The cost containment incentives of the tax will result in more efficient delivery of service, or just a cutting of needed utilization (if the latter, then there is the potential problem that deferred care will just mean more unhealthy or costlier people moving into Medicare in the future, and there is an evidence that there are real incentive problems for insurance companies for late middle age people since within five or ten years, they will be ‘Medicare’s problem’).
There is an article on this in todays Washington Post:
Health-care reform bill’s proposed tax on high-cost plans raises questions
http://www.washingtonpost.com/wp-dyn/content/article/2010/01/06/AR2010010604931_pf.html
Below is I think a key quote:
“The consumer-directed-health-care crowd argues that with high cost-sharing, patients will do the only legitimate . . . cost-benefit calculus — but that surely is nonsense,” said Princeton economist Uwe Reinhardt. “None of these proponents has ever shown that patients are even capable of evaluating the clinical merits” of treatment options.
Another problem is that I am unaware of anything in the current Senate reform, which looks like it will be final bill, that will allow people to do meaningful price comparisons. Most providers are unable or unwilling to provide an estimate of the cost of a unit of service before it is provided. So how can a person price shop, even if they coan judge quality and appropriateness of the care? And with gate keeping and utilization controls in many policies, what is the average preson’s ability to make a meaningful choice?
I do not care about whether this kicks a union guy in the nuts, or what progressives will say. In terms of policy, it is a very crude tool that very indirectly addresses something that may or may not be a problem, and it may do harm.
Another Obama Fail, in terms of how his approaching it. He wants a deal, and that is all he seems to care about at this point.
LT
@donovong: How do you know that it is actually that BTD?
John Cole
I just called it that because I worked all day, then checked several blogs, and all of them were talking about it. They weren’t yesterday or the day before. Calm down. Your rights to disagree and call me a jerk in this unmoderated open forum are not being impinged.
I support both, actually. I also support ending the exemption to employers for providing health insurance and also think that if employers do provide health insurance, those insurance costs should be on every paycheck so employees start to understand how much they are actually paying. And I think I, someone who is filing singly and makes less than 1/10th of 500k a year, even with the 100 dollars in filthy lucre I rake in on google ads every month, should be paying more taxes in general.
We’re fighting two wars. We’re running horrible deficits. We have millions of people with no health insurance and millions of people out of work who need help. Our infrastructure is crumbling- there are bridges in my town I always wonder about when I drive over them. Our schools are a disaster because we fund them with property taxes. California and several other states are about to go under. And if you are sick and tired of the permanent war, as I am, since we are never going to start a draft, one way we could end our adventurous ways is to demand that we start paying for them.
BTD
@donovong:
What I wrote does not require expertise, just a little bit of research.
But have it reality based community.
Hell, John’s right! It does not apply to policies costing $8,000 for individuals! It really DOES apply to polices for families valued at $26,000, not $23,000.
The savings IS greater than 0.3%!
The House bill does NOT offer an alternative financing mechanism that would impose a surtax of 5.4% on incomes over $500,000 a year. The excise tax IS a more progressive proposal than that!
Opposing the excise tax IS an insult to Obama. No one could possibly oppose the excise tax UNLESS they hated Obama! PUMAS!!!!!
Capn America
@ BTD: “Why not means test the excise tax? Have it apply to health care policies for persons who make over $200,000 a year?”
In a perfect world, that would be one solution that leaves everyone better off… BUT any program that is means-tested will eventually come under fire for being a handout to lazy bums, because, after all, most real Americans will at some point be earning over $200,000/year. What you’re saying would amount to making our income tax system more progressive. Remember, the Repubs are freaking out over the marginal tax rate going up by a measly 3%, no way would they consent to a means-tested excise tax.
kay
@acallidryas:
I agree with you. They’re not going to go right from offering 26k in pay in the form of insurance to 26k in the form of taxable income.
But we can’t keep giving insurance companies a huge incentive to over-insure. And we can’t keep encouraging people to take their pay in the form of a health insurance policy.
We have to separate these two things. Health insurance can’t be a “perk” or a “benefit” that’s tied to employment, and subsidized and propped-up with tax policy.
SP
What does it mean to be “affected” by the tax when they say 25% of middle class people will be “affected”? Someone with a $40k health plan and $250k salary will be paying a lot more than someone with a $70k salary and a health plan just over the limit, but they’re both “affected.” I’d like to see dollar amounts of additional tax per person for income groups rather than a binary affected/not affected.
LT
@John Cole: I have no desire to call you a jerk and I’m totally calm about this. I do think you’ve overestimated the size of the “Oh Dear God What Has Obama Done???” thing, that’s all.
mcc
Well but it wouldn’t be a drop in health insurance money, right? Because everyone seems to agree that very few people are paying $23000 for a family plan right now, and the only worry is that in future health insurance premiums will increase very rapidly until $23000+cost-of-living-increase is what employers are paying in the normal case. So in this scenario, employers will be increasing the money they spend on insurance, but then after they’ve raised the money they spend on insurance to a certain point they’ll have a disincentive to raise it any further. So it wouldn’t anywhere be a matter of money being taken out of one column and put in another, it would be a matter of how, when total employee compensation increases, that money gets allocated. I guess this is kind of a pedantic difference? But it seems like an important one.
The only situation I can think of where an employer would tend not to give that money to the employee at all due to the excise tax is if at some point in future the employees specifically go to the employer and say “we’re happy with our compensation but our health insurance is not good enough, we need more coverage” and the business goes “hm, but it would be too expensive to get quality health insurance, so I’m not going to bother”. But it seems like in this situation the government has failed anyway– because it’s failed in its position as regulator of the health insuranec market to keep health insurance premiums within a sane range– and the excise tax isn’t necessarily the government policy most in need of change in this situation.
Again, am I missing something?
If that’s what the effect turns out to be then yes, we can say it failed as policy.
Billy
I guess it’s to make sure the union deals get exempted (all the yelling, I guess). But I admit to being perplexed, too. I work for a very prominent professional services firm, not doing prominent work, and have a full family insurance plan costing about $16k in premiums (mine and copmany share). Self-insured, but I don’t see why there would be many union deals worth more than $25k. I may just be ignorant. I also feel like there’s something I’m missing. Maybe it’s the growth rate thing?
Cathie from Canada
In Canada, we already have a tax on all of our employment benefits, so I am not sure what is so outrageous about this.
Here, things like this are called “taxable benefits”. They are calculated into our income and so taxes apply not only to dental and health plans but also to things like employer-subsidized parking spaces and other benefits of this type.
BTD
@Capn America:
But the main feature of the health bill is in fact providing Medicaid to 15 million people – a handout to the “lazy bums.”
Opposing a tax on the middle class is a much better play politically.
Whatever one may think of the policy regarding the excise tax, no one can, imo, argue that it is good politics. It clearly is bad politics. Sometimes you swallow bad politics for the sake of good policy.
I do not think this excise tax is one of those good policies.
glocksman
Why do I oppose the tax?
Well, my current 90-10 HMO has a total cost of a hair over $6k/yr (single coverage).
I make $13/hr wages.
Medical insurance inflation is far outstripping the ‘official’ inflation rate.
In fact less than 10 years ago, the cost of my insurance with 100% coverage and a much better prescription plan was $4k/yr.
See where I’m headed?
While Liberdouche, the Rethugs, and bitches like Landrieu say that taxing the uber wealthy who made off like bandits during the Bush tax cuts is ‘unacceptable’.
Fix the problems with the plan (or just pass the House’s plan as is) and make the tax hikes broad based in order to spead the pain beyond union workers, and them I’ll support it.
Until then, I’ll be right there with the Teabaggers shoutin ‘Hell NO’ at my congresscritters and the WH.
ThatLeftTurnInABQ
I think the intent of taxing the Cadillac plans (in addition to just raising revenue) is to put a disincentive in place to discourage the insurers from turning around and raising rates (and thus profits) by “upgrading” a lot of folks who currently have sub-Cadillac plans up in to the Cadillac range, with a higher price tag passed along via the employer, which would have the effect of taking the costs of HCR (no rescission, etc) imposed on the insurers and just passing them down the line.
Think of it like an airline that has just been told they can no longer put passengers in the baggage hold, or toss them out of the plane at 30,000 feet to save on fuel. That’s going to eat into profits. The easy solution for the airline would be to turn around and tell the passengers sitting in the front of the coach section: “Congratulations! You’re sitting in 1st class now!”, and then charging them more. The subtle way for govt. to discourage a business practice without outright banning it is to tax it. That is what they are trying to do here.
Having said that, I don’t know if the intended effect will be obtained. This seems like an area where unintended consequences are very likely.
Warren Terra
@ BTD
well, the first question would of course be why do it that way – what would be the advantage?
More seriously, have you thought this through at all? I mean, the whole point of my comment was that I think that employer-provided health care should be taxed as income (and subsidized, etcetera, all of this leaving aside my dream world, in which we’d have single-payer health care like people do in civilized countries). If health benefits were taxed as income, they would be subject to the same sort of progressive taxation all other income gets, which (along with subsidies and the like) would get at the issues of justice and class you seem to be aiming towards. But the precise thing you suggest makes no sense. A system in which someone making $190k pays no tax on any of their health insurance but someone making $210k pays tax on all of theirs? And if the well-paid were levied a special tax on their health benefits no matter the value of their benefits, at a rate not tremendously different from the top rate they’re already paying on income, there would be no reason for them not to go for just the sort of Cadillac plans that the excise tax is meant to discourage – so your idea completely discards the other advantage of the excise tax plan, the downwards pressure it places on the most expensive health care plans.
Mark
I have around a 70% actuarial plan with a lot of cost-sharing provided by my employer. My co-workers are an older and rather unhealthy lot (diabetics, smokers, a guy with liver disease, etc) and policies for single individuals still only cost $370 a month before the tax break.
I can’t see how a risk-adjusted plan that cost $8000 a year isn’t just chock full of giveaways from you and the federal government via your employer to insurance companies and already highly-paid doctors.
kay
@NanaColleen:
The Senate bill has an exemption for dangerous professions. Admittedly, narrow.
I like it because I think we have to stop taking a huge portion of pay in the form of an insurance policy. I recognize that there are people who use 26,000 a year in health benefits, but year in year out? I recognize that the nature of insurance is such that you’re paying 26k a year on the off-chance you’ll require 2 million that one time. I get it. But 26k a year is a lot of insurance. If every federal employee plan is worth (average) 15k, what the heck are you getting for 11k extra? Should we use that tax code to encourage that purchase?
General Winfield Stuck
@John Cole:
That’s ok. But personally I would have gone with “a perfectly good plane to jump out of”
Old Paratroopers joke. Of course it’s only funny if yer wearing a parachute.
Fwiffo
Why not do both? Cadillac tax plus fatcat tax equals better deficit reduction.
Sly
The only problem with the tax, and it needs to be repeated a million times that the Senate bill has a tax on the insurers (which is important), is that if medical inflation does not go down with respect to general inflation it will start to hit “average” negotiated health benefits in about ten years. This is because the tax is indexed to general inflation while medical inflation has historically increased at a higher rate.
The bold part is the assumption groups like the CWA and other unions who have gripes with the tax are making. They basically doubt that the tax, along with other items designed to reduce medical costs, will not work as well as advertised. They also assume that Congress won’t look at this in, say, eight years and adjust the index.
The bottom line is that they’re trying to design a tax that is not intended to generate lots of revenue, but provide a balance between wages and benefits in employer/employee negotiations. Management has an incentive to favor benefits because they have to pay payroll taxes on any wage increase they agree to, while benefits remain untaxed (this has the effect of inflating medical costs for everyone). The excise would make offering those kinds of plans cost prohibitive.
@BTD:
The surtax does nothing to control costs. In fact, the House Bill does less than the Senate Bill on that front, and a big part of making health care more affordable is getting rid of all the backward incentives that the current system promotes.
If you want to hear someone who likes the Senate Bill say that the House Bill is better, that’s fine. The House Bill is better. It’s more consumer friendly, has clearer finance mechanisms, and a national insurance pool. But that doesn’t mean that the Senate Bill is a piece of shit, even by comparison.
p.a.
I am a union member with a company provided health plan; single, no dependents. I can’t find the paperwork now, but I’m 90% sure the value is under $10,000. We have traded wage increases for this. Not only that, we were on strike for 15 weeks in 1989 to preserve our paid medical, not just for ourselves, but for most every non-management hire in N.Y and New England by NYNEX/Bell Atlantic/Verizon ever since. So yes, I would rather not have my plan taxed as income, whether directly on me or on my insurer. These DLC Democrats remind me of the line from the greatest protest song ever written: “and when we asked them how much should we give, they only answered ‘more more more’…”
And anyone out there who has made the argument that the difference would be returned to workers as future wages is either disingenuous or a moron.
Maude
@LT: You must be new here. Go back and look at comments on HCR posts.
Warren Terra
@BTD:
Umm, is someone spoofing him, or did BTD just mock the lingering animosity that Democrats aspiring to some semblance of sanity have for PUMAs? I mean, given his own extremely embarrassing record of PUMAesque behavior during the late campaign it’s not like BTD would be standing on terribly solid ground doing such a thing …
Seanly
@John Cole:
Once more I ask – how were you ever a Republican? Had you banged your head very hard several years ago and it took time for the fog to clear?
I agree with you that we need to change our tax policies. The current regime of income tax, property tax, sales tax and fees just isn’t cutting it. My own thought is that the real problem is that incomes have been stagnated for too long. We all work harder & harder (rising productivity) while inflation, even at low levels, outstrips any meager pay raises we get. Feeling a pinch, people demand lower income taxes; states then raise the most regressive taxes -sales and property. The income trap is responsible for even more in my eyes – desperate for more money, many people cashed out the equity in their homes or went for big houses with adjustable rates not realizing the piper would have to be paid.
back on topic, I pay about $3850 a year for my health insurance – not sure how much my company pays. This is just the policy for my wife and me. Even for a family policy, I can’t imagine that my company + employee is paying more than $15k per year for the policy. I do know in my field that one local engineering company’s employees pay about $600 a month so that might be one of these Cadillac plans once employer match is included.
Comrade Jake
@donovong:
Lately, this has become close to a daily occurrence.
Mnemosyne
@kay:
I was just thinking about that: how much incentive do companies really have to negotiate down healthcare costs when they get to write the whole thing off as a tax deduction in the end? The whole “trading wages for benefits” thing has been a huge chimera, almost a conspiracy between the insurance companies and the employers to keep costs high so the employers can continue to plead poverty and refuse wage increases.
Warren Terra
@Sly:
This isn’t a bug, it’s a feature. Not taxing benefits as income is distorting, and a bad idea. Taxing them as benefits suddenly is also a bad idea. The precise mechanism you mention, if it actually happens, amounts to phasing in the taxing of benefits slowly and over time, allowing people to negotiate their pay packages appropriately. And if the cost curve were to bend to delay the implementation, that wouldn’t be a bad thing, either.
kay
@Cathie from Canada:
I think that would be great. I’m reading “Too Big To Fail” and I think if we started taxing even a small portion of employee benefits of high level workers we’d be sitting pretty. Just put it all under “income”.
Those people enjoy a lot of perks. My goodness. They commute from Texas to New York. It’s ludicrous.
Mike Kay
This all about the public optition.
The Bill-Killers have been carping, harping, and distorting every aspect of the bill.
Have you noticed, they can’t say one nice thing about the bill, not one, even though their idol paul krugman is ecstatic about the bill.
$8,000 / 12 = a monthly group insurance premium of $667. Now what middle class person pays that kind of premium !?!
Shop of the more expensive individual rate, and you have to be in 60s or have some high risk situation to rate that expense.
SP
Leaving aside income, costs, etc., the fundamental idea here is how employers pay people. If the employer spends $1 more on your health benefits, you get $1 more paid in premiums. If the employer spends $1 more on wages, you get somewhere between $.6 and $.8 depending on your federal income and your state tax rates. All this will do is equalize the treatment of the two forms of payment for health premium benefits over the limit.
bayville
@Mnemosyne:
Bingo! In the future you can add “trading wages for benefits and the excise tax” into the negotiating process.
BTD
@Warren Terra:
To take the argument to its logical conclusion then, you would tax Medicaid recipients for the health insurance they are provided correct? You would tax the tax credits provided to persons for purchase of insurance on the exchanges correct?
Let’s be clear, of all the distortions in the tax code, one of the least troubling, from a progressive point of view, SHOULD be providing employers a tax deduction for providing its employees health insurance.
Indeed, one of the better ideas in the health bill is the incentives to make employers provide health care to theory employees, on the pain of paying a tax should they fail to.
Or do you oppose that too?
Warren Terra
@Mnemosyne:
I think you’re misunderstanding the incentives a bit: yes, the companies get to deduct from their taxable profits the money they spend insuring their employees, but they also get to deduct the money they spend paying their employees, so this is a net neutral. The difference is that the money spent on their employees’ benefits won’t be taxed as income.
LT
@Maude: Not that new. I don’t think JCole was talking about comments here, but about Lefty blogs, or many of them.
kay
@Mnemosyne:
Well, that’s where I ended up, where you are.
I think its a good idea, and it gets us part of the way toward rational health care delivery.
If it isn’t working in ten years, and the costs continue to go up, and all plans cost more than 26k, we can reconsider.
Mnemosyne
@BTD:
Huh? Medicaid is paid for through taxes. Are you proposing repealing the Medicare tax and changing it to an individual tax on the people who receive Medicaid?
Mike Kay
@Comrade Jake:
Talk left still exists? I thought they pulled up stakes and left after Hillary lost?
dday
Isn’t it not about the tax threshold right now, but what it will be in 10 years, when CBO projects it would hit between 22-27% of every individual and family health plan in America? And the next ten years?
This is exactly like the AMT, a tax that will eventually hit more and more people (in fact it’s designed that way).
Mnemosyne
@Warren Terra:
I may be a little confused here. Are you saying that my company is able to take my salary as a tax deduction at the end of the year?
BTD
@Warren Terra:
One of the problems in these discussions is indeed the “Snowball” problem.
It will be a fine day indeed when the merits of a policy can be discussed without resort to ad hominem.
glocksman
@Mnemosyne:
The employers may get a tax break for offering health insurance but they damn sure don’t get to write off the entire cost on their taxes.
If they did we wouldn’t have to fight my employer tooth and nail every 3 years to keep them from shoving even more of the premiums onto us*.
So yeah, if people want to accuse me of being irrational and selfish because I want to hold on to what little (I only make $13/hr) I already have, then so be it.
*6 years ago the family premium was $23/wk, now it’s $53, even after we switched from 100% coverage with decent prescription plan to a 90-10 with a shitty drug plan)
les
@acallidryas:
If Herbert is right–I doubt it, but he seems generally good–he’s implying that employees have given up 1/2 to 1/3 of their wages, for health insurance. Sorry, that’s bullshit. I’m 61 and smoke; I just left an employer plan that’s pretty decent ($6K annual out of pocket type costs) that ran $11K in premiums, family of four. Now, am paying about $8k for similar. If I made $50K and was offered a 50% raise, v. health insurance, that’s a no brainer. A $23K employer plan sounds like gravy to the insurance co., and no incentive for the employer to negotiate anything–a complete cost write off. To top it off, the excise tax is minimal (in the context of health costs) till the plan costs upwards of $35K.
Even at the ridiculous inefficiencies of the US system, total health costs are what? Slightly north of $7K per citizen? And you’re convinced that huge numbers of people will get hit with a tax on these policies? Even with no savings, that would mean everyone in the country gets cadillac at a tax cost of a couple hundred bucks. OK, that’s not real math, but…
les
Sorry, glocks, but wrong. Health insurance costs are treated as compensation by employers, 100% deductible.
bayville
@Mike Kay:
Seriously. Do you live in South Dakota? Alabama?
Here are New Jersey public education employee rates.
Base salary of NJ teachers, 10 years experience about $58K per year. Hardly wealthy people.
Ailuridae
There is a consistent stream of misinformation in these HCR threads that can’t be unintentional. I’m happy someone addressed the self-employed canard but for those wanting a better understanding of the anatomy of the Cadillac plan here is a really excellent post from The People’s View (I think he is also a kossack but maybe not for long)
http://www.thepeoplesview.net/2010/01/anatomy-of-cadillac-tax.html *
Also, the excise tax is indexed at inflation +1 % which is another lie about the plan you see pretty often.
(This is not my blog.)
Mark Gisleson
You know, for me it’s come down to this John. Either you’re extremely well read and have an extraordinary grasp of the issues involved here, or you’re getting fed your talking points by someone else.
Why don’t you walk back for us why YOU PERSONALLY JOHN COLE feel so strongly about this because, in all candor, you’re getting pretty goddamned snarky about people giving Obama shit over his bungled version of Hillarycare.
Stop asking your readers to explain it to you, and instead why don’t you explain it to us. ???
Tom Hilton
Has anyone else noticed that the people who deride this bill as a massive subsidy for the insurance industry are also the most fanatical defenders of the tax code’s $250 billion annual subsidy to the insurance industry? Curious.
Comrade Jake
When in doubt, read Ezra fucking Klein. Please.
glocksman
@les:
My understanding is that the money spent isn’t taxed, just like the money wages are paid from isn’t taxed, not that they can just ‘write off’ the money spent as an expense and get tax credits for it.
Edit:
We both may mean the same thing but I might have used the term ‘write off’ incorrectly.
If so, mea culpa.
kay
@Ailuridae:
I actually like the tax. I support the tax. I do want them to spread it around though. I think the people saying it is inequitable have a good point. I’d like a new tax on high earners, and the excise tax.
We can have both taxes. We’re Democrats :)
Mike Kay
@bayville:
When you click on the PDF, it says:
local monthly cost for a single person: $438.55.
That’s much, much less that the Cadillac tax threshold of $667 for a single person.
What is exactly your complaint? You clearly won’t face the Cadillac Tax.
BTD
@Mnemosyne:
I am not proposing it. Rather I am taking Warren Terra’s argument to its logical conclusion – to wit – taxing health insurance as income.
Leave aside the Medicaid example for clarity, let’s discuss the subsidies (actually tax credits) under the Senate bill.
By Warren Terra’s logic – that health insurance should always be taxed as income, then the subsidies provided should be taxed as income.
Is it counterintuitive? Certainly. Sort of my point.
I do not believe that taxing “Cadillac” plans is good policy. To the degree that the tax will fall on persons making less than 100,000 a year, it strikes me as bad policy. I am fairly skeptical that it will reduce health care costs. I believe it will instead reduce the level of health insurance offered to workers by employees (with no significant increase in wages.)
One of the major achievements of the health bill will be expanding the number of people who have health insurance. By necessity, and as a very good thing, this will in fact expand the total expenditures on health insurance and health care in the nation. It is the opposite of “cost containment.”
The excise tax is intended to reduce expenditure on health insurance and health care. I think it will certainly reduce expenditures on health insurance and probably health care.
Will that be a good thing? Reasonable minds differ.
But in terms of truly bending the cost curve in a meaningful way, even the provision’s proponents admit that it will have little effect.
In other words, the policy benefit, even if accepted, is small. Is it worth it in terms of the policy downsides? Is it worth in the face of the political downside? In my view, no.
kay
@Tom Hilton:
It is. It’s a problem.
Ken
Sly @72 wrote: “The only problem with the tax… is that if medical inflation does not go down with respect to general inflation it will start to hit “average” negotiated health benefits in about ten years.”
Is this a problem, or a feature? This would certainly be one way to start applying pressure to get medical inflation in line with general inflation. It might even have been deliberately designed for that, although that may require a level of forethought (and Machiavellian planning) beyond the congressional norms.
Malron
Funny how an interview where Obama says “I prefer a mixture of both” is parsed down to “Obama supports a Cadillac tax” but OK, I’ll go the manic-progressive silliness one better.
I don’t own a Cadillac so I won’t have to pay the tax. Nyahhhh.
Warren Terra
@BTD:
Umm, sure, I would – in precisely the same way that I’d tax their welfare benefits as income. I’ve been very careful to say that I think subsidies are essential, and in any case the whole point of progressive taxation is that people in the lowest part of the income spectrum – such as, say, people receiving Medicaid – pay little or no income tax. Indeed, with the EITC, they may pay negative tax – which is a good thing. You are familiar with progressive taxation, right? Because the first question you asked me suggested you aren’t …
Was this question meant to make any sense?
This is an interesting position. As you should probably be aware, employers don’t currently get a tax deduction for providing insurance for their workers (well, not any more than they get for spending the same money on providing income for their workers). The only thing even related to this is the penalty the bill will impose on employers who don’t provide insurance. My understanding is that people who spend most of their time considering these issues, including people who very much want better access to health care and are comfortable with more government involvement, pretty much uniformly disagree with you regarding whether this distortion is a good thing.
I think that people getting their health care from their employers is a dumb thing, as it only makes it harder for people to leave their employers to seek opportunities elsewhere. One real criticism of this bill is that the exchanges are too weak, and so it will remain hard to join or found a small business and get insurance as cheaply as you did with your large employer – though at least the preexisting condition and community rating provisions will make it possible. So, yes, I’d prefer a system in which people didn’t get their health benefits through their employer at all, ideally a single payer system but more realistically by their buying subsidized, highly regulated plans from a selection made available through the exchanges.
BTD
@Ailuridae:
Indexed to the CPI, not health insurance inflation, which runs much higher than the CPI.
Mike Kay
@Comrade Jake:
Isn’t Ezra a tool of Mr. Big and a part of obama’s veal pen!!!!!
Ken
Sly @72: “The only problem with the tax… is that if medical inflation does not go down with respect to general inflation it will start to hit “average” negotiated health benefits in about ten years.”
Is this a problem, or a feature? It would certainly be one way to start applying pressure to bring medical inflation in line. It might even have been deliberately designed for that purpose, although that requires a level of forethought (and Machiavellian planning) that I don’t normally associate with Congress.
ThatLeftTurnInABQ
@Mark Gisleson:
The subtle yet deviously totalitarian way that John Cole crams his talking points down our throats by saying “I don’t understand this” and asking his commentors to fill him in with the details he is missing makes more sense when you realise that this blog is actually controlled by a ginormous white cat.
Warren Terra
@Mnemosyne:
Yup. Companies are taxed on profits, not gross revenue. Business expenses, including payroll (both income and benefits), are deducted before tax is assessed. That includes your income (and your benefits – to exactly the same degree, from the employer’s perspective), and it also includes whatever your CEO is paid and gets as perks.
Mike Kay
I ask this again, what single-middle-class person pays a monthly medical premium of $667 ?
Dork
Does this mean when I buy an actual Cadillac, they’ll impose a healthcare tax on my purchase price?
Ailuridae
@Mnemosyne:
This. Its interesting to read people write that the current Senate bill is a giveaway to the health insurance industry while opposing the excise tax which (finally) puts a cap on the size of the giveaway to the health insurance industry.
Punchy
@Dork: Yup, Chevy is getting a FUCKTON of free product-name publicity in this health-care debate.
Maybe Obama can rename “Carbon Credits” in his Captain Trade Bill something like Carl’s Jr. Delicious Chicken Sammy Wait What Oh Yeah Carbon Credits.
Mike Kay
Let me ask this another way, what should the threshold be for the Cadillac tax? Right now, the threshold is a monthly rate of $667 for a single person, should it be $900? $1,000? $1,400? $1,800?
bayville
@Mike Kay:
Huh?
NJ Direct 15 – The cheapest family plan – is $1315 per month total costs.
This year health insurance costs for public employers increased between 16-25% in the state. Compound that and project the increase over the next 4 years and then tell me as to what the yearly health insurance cost is come 2014?
BTD
@Warren Terra:
On the employer mandate you write “My understanding is that people who spend most of their time considering these issues, including people who very much want better access to health care and are comfortable with more government involvement, pretty much uniformly disagree with you regarding whether this distortion is a good thing.”
I think that is incorrect, but assuming it is true, explaining why they think so would be helpful in assessing the validity of the point.
Your own view is that having employers provide health insurance is bad because it limits employee mobility. but of course an employer mandate would remedy that problem PRECISELY because an employee could change jobs KNOWING that his new employer had to provide health insurance.
Finally, on the issue of the subsidies, affordability is a key issue. As you say, I misstated the tax preference for employer provided health insurance – it is a tax free benefit to the employee, not a tax break for the employer.
Isn’t providing a tax credit to persons who make 400% of the FPL a “tax break” for health insurance?
I an not following your argument against special tax treatment for health insurance when you appear to support it at certain levels of income above the Medicaid eligibility levels. Does that not “unbend the cost curve?”
Existenz
I’m a union member. I can guarantee that my union isn’t spending $26,000 per year on my health insurance, and if they are, they need to get a better plan.
When I was self-employed I had decent insurance for $150/month (I was 28). $26,000 is a ridiculous amount per year.
If the unions are worried, they should just tell the businesses to give them all the money they were spending on health care plans, and the union itself should shop around for an affordable plan. For $26,000 per year you can find some pretty fucking good insurance plans. I think Obama said the plans for Congressmembers only cost $13,000 per year.
jl
The tax is indexed for overall inflation. For the tax to work as intended we are making a bet that the Senate cost controls will work well enough to contain medical care inflation so the tax will not affect more people than intended. It is also a bet that the minimum plan quality regulations, and for provisions of preventive care, in the Senate bill will be effective and can be enforced.
If not, I think there is reason for concern that the plan will hit too many people and will result in a reduction in efficiency of the care provided to many middle class people.
If everything works as intended, then the tax is no big deal. I have doubts that everything will work as intended. Then, in ten years, the critics will have been right.
I have doubts about people, including Ezra Klein, complaining about wasteful inefficient policies. In terms of primary and preventive care the US is stingy and very inefficient due to lower than average utilization (compared to other countries) and poor coordination of care.
If you are sick, and have the right coverage, and the insurer is forced to pay for the accepted level of the standard of care, then you get wasteful inefficiently provided very good care.
John Arbuthnot Fisher
If this tax really did contain costs, then why are we talking about increased deductibles, increased co-pays, etc. as a result of the tax? Aren’t these simply hidden shifts of costs onto the consumer, wrapped up in a lower premium, rather than an actual reduction in cost?
Also, a plan that may not qualify now may qualify down the road. The link below shows an increase in the average family premium from $13,375 in 2009 to somewhere between $24,180 and $30,803 in 2019, and we all know that real wages will stagnate, at best, during that period. So essentially the tax will hit people to the tune of $1000-$3000/year when wages are stagnant, and if you trust that someone premiums will rise in tandem with inflation of prices or wages, you clearly haven’t been paying attention to the BS of the last 20 years.
http://www.kff.org/pullingittogether/091509_altman.cfm
Top 1% surtax, please.
jl
Tunch better read all of this, and explain it carefully to Cole, or I will feel betrayed.
glocksman
Here’s a link to what my county government offers employees with both employee and employer share and the total monthly cost.
County Health Plans
Their Welborn plan 1 option listed is what we *used* to have at work.
We dropped to a 90% plan with shittier drug benefits, so our plan is about $1000 cheaper.
Notice that the single yearly premium for it this year is $7059.24
That’s within a stone’s throw of the Senate’s $8k cap considering the rate of medical inflation.
Shit, the medical inflation rate was over 10% in 2007.
Source
Like I said, the excise tax is my ‘hill to die for’ because it’s a direct attack on my already lower middle class lifestyle and income.
BTD
@Ailuridae:
Actually, the excise tax is not likely to effect the profitability of health insurance companies, at least I have read nothing that supports that argument.
The idea is that the health insurance companies will either sell plans subject to the tax and pass the tax along on the price of the policy or instead sell a cheaper plan.
The alleged “giveaway” to insurance companies involves the individual mandate, a policy I support. I also supported the public option as a market force to control the costs charged by the insurance companies in the area of the market where the mandates would most likely come into play – the exchanges.
robertdsc
Does that make us Tunch-bots?
glocksman
@robertdsc:
Nah, some of is are Lily-bots.
Remember John already admitted that Tunch is really the neighbor’s pig. :)
Mike Kay
@bayville:
But, I’m talking about single persons.
Even for a family, the threshold is $23,000 per year or $1,916 per month ($23,000 / 12).
You simply wouldn’t meet the threshold of the tax. The last time i looked $1,315 is much, much less than $1,916.
So you still haven’t explained how the Cadillac tax would apply to middle class New Jersey educators.
Malron
I think this is a good time to refer to this blog post from BooMan:
I want less hand-waving freakout and more accurate information. Don’t make up shit you know isn’t true. Don’t throw bombs at your allies because you think it furthers your agenda or drives up site hits. Keeping us informed is the most important thing.
gwangung
@robertdsc:
Proudly.
Mike Kay
how many of you guys know Tunch is named after a Pittsburg Steeler offensive lineman
Warren Terra
@BTD:
This would be true if it weren’t the case that Microsoft can get health coverage for you more cheaply than you can for yourself if you want to start a software start-up. Which was precisely my point earlier: the bill improves on the problems associated with providing health care through employment, but some remain. Also, if you change plans as you change employers you may have to get a new doctor, etcetera, all of which is not ideal.
I’m not following you here, at all. What, exactly, am I meant to support at certain levels of income? I think people should go out and buy subsidized, regulated plans using their taxed income. And obviously I think that the system of income taxation should make this possible, i.e. it should become somewhat more progressive, for example by including a larger basic personal deduction, to ensure that people can afford the plans. I similarly don’t really understand your question about the cost curve, but it’s my understanding that people being more aware of how much their insurance costs can only help to bend the cost curve, even if they’re also a bit more able to afford it.
bayville
@Mike Kay:
You’re not comprehending, or don’t want to comprehend the chart or the probable amortization rate of health insurance costs.
Thought it was simple. I was wrong.
glocksman
@Mike Kay:
Perhaps, but given the much higher rate of medical inflation vs the official index and a yearly cost now of $21,177.60, it wouldn’t take long before a Vanderburgh County road worker or jailer would be hit.
If you want to spread the sacrifice around a little more equally I have no problem with general tax hikes.
I have a very big problem with taxes that disproportionately affect people like me who don’t make a whole lot of money but do have decent insurance.
jl
I did not know that Tunch is really a neighbor’s pig.
The explains the bouts of mutual antagonism. Both are vulnerable of being killed and eaten by the other.
Cole needs to look at things from Tunch’s perspective a little bit more.
Tom Hilton
@BTD:
The problem isn’t “having employers provide health insurance”; the problem is having health insurance depend on employment. It’s tying the two things that limits employee mobility. An employer mandate doesn’t solve the problem, because changing jobs still means changing health plans.
jamfan
FWIW, I read on The Plumline that Obama is now going to meet directly with union bigwigs to make his case; I sincerely hope there is space for them to make their case as well — I’ll feel better about the result.
Ailuridae
@BTD:
Actually, the excise tax is not likely to effect the profitability of health insurance companies, at least I have read nothing that supports that argument.
It would be more interesting if I, you know, made the argument about the excise tax affecting insurance company profitability. I didn’t so please stop suggesting I did.
Not taxing the employer paid portion of of health insurance contributions and forcing all employers to buy plans from the private insurance market (employers cat buy into Medicare or the VA) is a much larger “giveaway” to the health insurance industry than any steps in this bill (And I would guess on the order of 20-40X as large). Its existed for generations and except for a rather small portion of progressives nobody has said or written a word about it.
Mike Kay
@glocksman:
This is a fair point. I would imagine in the future the threshold would be fixed if it indeed trapped middle class workers. But as of right now, it doesn’t. Nobody has provided any data that this would currently apply to middle class workers.
gwangung
The more I read of discussions, the more I’m convinced that there are a lot of people who have very good observations and projections on parts of this particular piece of health care legislation–but almost no one who has a good overview of how all the parts inter-relate and affect each other.
Mike Kay
@bayville:
You must not be a math or logic teacher.
you have yet to provide any data that middle class educators fall under this tax. Nothing.
BTD
@Warren Terra:
If I understand you correctly then, the obstacle of tax preferences to cost curve bending ends at the point where the government decides that it should subsidize health insurance – either fully (Medicaid) or partly (subsidies).
Why is that so? Why is it not at say, at families who make 100K a year? (I believe subsidies go up to families who make 84k/yr.)
I guess I am not following the whole “bending the cost curve” theory you are espousing and why it only applies when employees receive a tax free benefit as opposed to a government-paid or subsidized benefit? Is there some behavioral economics principal I am missing here? Genuinely curious.
General Winfield Stuck
@Mark Gisleson: @John Cole:
A different angle of attack. I will give you that. But I do believe Mr. Cole did just that in the linked comment above.
And if you need some info on this blog. I will be glad to provide it. BJ is a group effort, and albeit so, the front pagers are a little dense at times, we appreciate their “specialness” and only demand they ask interesting questions, so we wizardly minions can chew on them and turn the raw alfalfa into nutrition packed cud.
It’s a moooooving experience for all concerned.
Sorry, John, Anne, Dougj, I dint mean anything untoward. You all are very special and gosh darn it , smart too.
Mnemosyne
@gwangung:
Yep. You have a lot of people pulling scary-sounding pieces out of the bill and examining them without looking at how those parts interrelate with other parts of the bill. It’s the “Ooga-Booga!” method of argumentation.
glocksman
@jl:
Yep.
Here’s where he comes clean:
Linky
John O
Seems like an awful lot of predictions about outcomes fairly far off into the future in this thread, which somewhat automatically discounts their persuasiveness to me.
Pass what we can and fix it from there. If an excise tax on expensive plans (I am generally much more inclined towards the tax the rich people who’ve been hosing us violently for decades concept) starts creeping up to grab a lot of middle class wage earners, that’s easier to change from my perspective.
It’s all just too infinitely complicated to know what outcomes will be 3 years and out. I’d be happy if they just got the thing to be enacted/effective sooner, so we could then start figuring out some of this stuff based on reality, instead of guesswork.
It’s better than the status quo, viewed from on high. I hate lots of it, viewed from down low.
This is how progress is made. Of course people should fight for what they want or think is just in this any bill; what people should try harder to avoid is losing the forest for the tree.
BTD
@Ailuridae:
I thought that was the point to your “insurance company giveaway” line. What did you mean by that then?
Mike Kay
@jamfan:
Have unions provided any data sets showing it’s workers fall under the Cadillac Tax? No.
I have no idea why they’re upset.
Maybe they have a legitimate case, but they have yet to present one. If they had a case, it would be easy, after all, how hard would it be to produce some spread sheets, backed with hard data.
John O
Sorry about the typos. I have no permission to edit.
*shrug*
Mike Kay
@glocksman:
How much is your current monthly premium?
BTD
@Tom Hilton:
Having health insurance depend on employment? Is your point that folks are not changing jobs because a PARTICULAR health insurance plan is tied to a job? I thought the main selling point of untying health insurance from employment (by making the benefit taxable, the whole wages will increase argument) was that individuals would then become more prudent users of their health insurance?
I really do not understand your point. What did I miss?
glocksman
@John O:
I guess you have more confidence in the US Senate than I do.
Given that taxing of employer provided plans was the centerpiece funding mechanism of McCainCare and that there are a substantial minority of Democrats who are just as corporation friendly as any Republican, I can’t see the Senate passing a fix at all unless we get a 70-30 advantage.
We all know how likely that is to happen.
I’m not willing to take the chance.
bayville
@Mike Kay:
Hoping the fourth time is a charm.
Use a calculator and compute a 16-25% annual health rate increase.
To be conservative, I’ll use a 16% annual increase and the cheapest family insurance plan offered (NJ DIRECT 15).
By 2014, the overall cost for the cheapest family plan that covers NJ teachers comes to about $25K per year. Again this is a conservative estimate using the cheapest insurance plan offered.
If you use the two more comprehensive plans the annual number exceeds $26K. Last time I checked 25-26K > than 23.5K but again I didn’t major in Mike Kay math.
Mike Kay
In some ways Firebaggers are no different than Teabaggers.
They yell and scream and refuse to PROVE their arguments with simple data.
Ailuridae
@John Arbuthnot Fisher:
Increasing costs are going to happen regardless. The rates from the graph you linked suggest a likely range in per annum health care cost increases of 6-9 %. The argument for the excise tax and the rest of the reforms is to slow the rate of the growth.
I’d like to respond to the rest of your post but its disappeared, oddly.
John O
@glocksman:
No, I don’t, not in its current incarnation in the least.
All I’m saying is that there are too many moving parts, including what the Senate rules and majorities are that far down the road, to get worked up about what might happen outside at least a year or two. There are certain things this bill does we can put into the “will happen” category, and that will alter the landscape, along with about a bazillion other variables.
And then we work from a new, and I think better reality, and advocate from there.
jl
@glocksman: John Cole is really a 72 year old English mum? It all makes sense now. Thanks!
Tell her to forget the Steelers and American foodie nonsense. I want tips on how to get good shortbread, oatcakes, and English toffee.
And Tunch is too big to be a pot bellied pig.
mclaren
Simple explanation:
Health care costs keep doubling every 8 to 10 years, therefore insurance premiums have to keep rising much faster than inflation. A “cadillac tax” on expensive health plans today is therefore a regressive tax on ordinary health plans tomorrow.
This is a stealth tax on the middle class designed to force employers to shut down health insurance for ’em. Instead of attacking the problem of rising health care costs by forcing doctors and hospitals and insurers to stop gouging patients, it attacks the problem of rising health care costs for forcing ordinary people to stop pay for as much insurance as they need.
It’s stupid, stupid, stupid, stupid, stupid. If you don’t pay for as much insurance as you need, you still wind up getting the expensive health care, you just lose your house because of it.
glocksman
@Mike Kay:
My share is $1243.32.
The employer’s share is $4973.28
The agreed to share is that the employee pay 20% while the employer pays the remaining 80%.
I also made an error in my earlier post about the county plan as compared to my own.
Our insurance prior to the downgrade was the Welborn Option #2, which had two hospitals in the network instead of just one.
John O
@mclaren:
Thanks for helping with my view from on high. It is my understanding that one of the express purposes of this bill is to slow the rate of increase in health care expense.
We’ll see, and if it doesn’t, we’ll have to go back to the drawing board, but we’ll be a little further down the road. There will be a lot of stuff in this bill that everyone agrees was good, in the future, and those will stay.
Mike Kay
@bayville:
That is a speculative argument. You’re speculating that rates will rise at that rate over the next 4 years. What is your basis for that conclusion? I mean, what have been the rate of increase for the past 10 to 15 years. It’s not an annual increase of 15 to 25 percent.
But let me put it to you this way: I would not support a tax on middle class workers. Now, would you support the Cadillac tax if the threshold was doubled from $23,000 to say $50,000?
Ailuridae
@BTD:
Right now, there literally isn’t a cap on the possible amount of money that can go untaxed to insurance companies. That’s fucking awful tax policy. The excise tax caps that amount at some combination of X * 8K + Y * 26K where X is the number of individuals who receive their insurance from their employer and Y is the number of families where one member receives family benefits from his/her employer. Currently the possible amount of money that can be funneled into health insurance is basically X * inf + Y *inf
Its funny talking about the increase in the size of the “giveaway to private insurance companies” an individual mandate creates (I know you are personally in favor of the mandate but I am speaking broadly) while ignoring that not taxing employer contributions to heath insurance amounts to having a potentially unlimited size “giveaway to private insurance companies”. That’s the status quo. The excise tax begins to stop that status quo which, on the whole, is incredibly regressive tax policy.
Mike Kay
@glocksman:
The tax is only on the employer provided contribution above $8,000 for a single person. You’re way under the threshold. You wouldn’t be taxed.
Thanks for you’re reply, I really appreciate a good faith give and take.
glocksman
@Mike Kay:
After reading this, his assumption is not an unreasonable one to make.
USA Today
Mnemosyne
@BTD:
Okay, I have literally never heard that argument for unhooking employment and health insurance. Who has been claiming that?
Tom Hilton
@mclaren:
And up is down, and war is peace, and ignorance is strength.
Today, everyone is subsidizing those people fortunate enough to have employer-provided healthcare. All of those people who are without insurance? And the ones who are getting gouged on the individual market? They’re subsidizing the people who get health insurance from their employers. It’s a regressive subsidy.
You know what would make it less regressive? Capping it. That’s effectively what the excise tax does (indirectly). (And yeah, some of the people with plans over the limit are union workers. Most of them aren’t. Most of them are pretty well-off compared to most of the people who are helping to pay for their insurance. And some of them are the CEO of Goldman Sachs…well, one of them is, anyway.)
And yet somehow, bizarrely, making a regressive subsidy less regressive is being made out to be a regressive move. That’s the kind of insane Orwellian logic I expect from the right.
glocksman
@Mnemosyne:
John McCain, probably.
bayville
@Mike Kay:
Actually in NJ it is pretty well assumed these premiums will rise at an increased rate into the forseeable future. The growth rates have increased by double-digits for three years now.
As to the so-called “Cadillac” excise tax in general, it’s a terrible idea. Penalizing someone for having super health coverage is ridiculous.
Triple the estate tax (“death tax”), end both wars and gradually (over a 5-year period) increase the income tax on earners over $500,000 per year. This will raise more than enough money to expand Medicare to the masses.
Ailuridae
@Tom Hilton:
I might drop out of this thread as you are making the same points I am in a far more cogent way
Mike Kay
@bayville:
you’re not gonna answer my question: would you support the Cadillac tax if the threshold was raised to $50,000?
bayville
Great slogan. “Healthcare insurance. Not very bad. Just plain bad.”
Yeah, that’s a winner.
bayville
@Mike Kay:
No. I support Medicare for all.
The Raven
This is based on the Medicare actuary’s report on the plan. The takeaway here is in this paragraph at the bottom of page 11:
Jon Walker covered this at FDL; he’s a lot more readable than the medicare actuary.
John O
@Mike Kay:
LOL. Yeah, I’m so old I remember those deficit-hawk GOPers rejecting a $100 Million exemption on the Estate Tax because of principle.
Which one I was never sure.
Ailuridae
@bayville:
As to the so-called “Cadillac” excise tax in general, it’s a terrible idea. Penalizing someone for having super health coverage is ridiculous.
Triple the estate tax (“death tax”), end both wars and gradually (over a 5-year period) increase the income tax on earners over $500,000 per year. This will raise more than enough money to expand Medicare to the masses
Its not penalizing anyone. As it currently stands those taxpayers who do not receive health care through their employer are subsidizing those who do. That’s actually not awful policy. But to ask those who don’t have employer based health insurance to subsidize those who do with absolutely no cap on the amount of that subsidy? That’s insanely regressive.
demimondian
@Ducktape: Quite so — but this is the thing
First, it doesn’t apply to people in the individual pool. It only appies to large employers.
Second, reread the cost of Congress’ plan. Those folks are in DC, and they have REALLY GOOD health care…and it costs 15K/yr. Hell, I have astounding health care just outside of Seattle (so I regularly get taken care of at UW hospital or Harborview or Swedish), and I set my employer back about $10.5K/yr.
Honestly, not only is this not a hill to die on, it’s not even a very progressive hill to fight on…unless you’re trying to kill the bill for some other reason. I wonder if that might be the case?
glocksman
@Mike Kay:
If they’d index it to the real rate of medical inflation I could live with it at the current limits.
As it is, with medical insurance having increased 131% over the last 10 years while the general inflation growth was only 28% (see USA Today story linked above), any indexing plan short of that means that it’s very likely that within 10 years I’ll be paying cadillac taxes on a Kia plan.
Tom Hilton
@BTD:
My point is that changing health plans is a significant deterrent to changing jobs. Under the status quo, it’s a huge deterrent because of the whole pre-existing condition thing; if you’re currently being treated for anything ongoing, you can’t afford to change health plans. Even absent that circumstance, changing health plans is problematic for a whole host of reasons (continuity of care, etc.).
Tom Hilton
@Ailuridae: Please don’t! I appreciate your comments.
John O
@glocksman:
“Within 10 years?”
Yeah, I suppose that’s possible. It’s also possible we’ll all join together in peace and love throughout the world because there’s an asteroid coming our way. Or, more plausibly, that something else very big will be different for both You and Us.
Like I said, if you’re right, that is not a hard adjustment to make, particularly if it is working as planned otherwise.
gopher2b
I don’t feel like reading through all the comments but can someone explain this to me. What’s the plan?
Every dollar over $26,000 for health insurance is taxed at your marginal rate? Does that include the employer paid part?
Who the hell pays more than $26,000 a year in insurance premiums?
Mike Kay
@bayville:
Then you’re arguing in bad faith. At one point you argued you opposed the tax because it could affect middle class workers, now you’re saying you would oppose the tax even if it only demonstrably applied to the wealthy. Like i said at the beginning, the public option Firebaggers are only harping and carping about the Cadillac tax because they didn’t get what they wanted.
Mnemosyne
@The Raven:
That’s not an argument for unhooking employment and health care. That’s an argument specifically for the excise tax in pursuit of the goal of unhooking employment and health care.
So I ask again: who is arguing that the reason to unhook employment and health care is to force patients to use their health insurance more prudently?
glocksman
@John O:
While past performance is no guarantee of future results, the medical inflation rate having been over four times higher than the general inflation rate during the previous ten years means that I’m not pulling my prediction out of my ass, either.
In other words, if the proposed indexing is general rate plus 1%, that’s simply unacceptable.
Mike Kay
@glocksman:
Thanks for the link, and I totally agree.
Ailuridae
@glocksman:
IF they index it to the real rate of medical inflation its attempts to curb future costs would be flawed at the design stage. The point is to provide an incentive to a combination of the employer, the insurance provider, the care provider and the patient using a stick rather than a carrot to get health care spending more in line with inflation. Indexing it to the real rate of medical inflation creates a situation where there is no “there” there.
Tom Hilton
@bayville: I’m not sure what your point is. You’ve been arguing in favor of keeping a regressive subsidy extra-regressive, so you’re not really in a position to mock improvement (making it less regressive) as being not enough.
The Raven
Also, p. 15 of the actuary’s report:
In other words, it’s kicking the can down the road for short-term savings. Meantime, it’s going to make people who have good plans through their employers very unhappy (or perhaps very sick or very broke) indeed.
John O
@glocksman:
I understand that, glocksman.
But I keep reading in most parts credible that this bill will in fact change your future-prediction if it works as intended. I’m just saying worrying about things that far out for things that might happen is not objectively fair.
Ailuridae
@gopher2b:
Current incarnation is that every dollar above the employer contribution per annum is taxes at 40%. So if the threshold ends up being 26K and your employer buys a plan that costs 30K there will be a 40% tax levied on the 4K difference for $1600. The design of the bill is that $1600 would be levied against the insurance company providing the plan (as they after all are making the income) the argument from some quarters is that the entirety of that $1600 would be passed on the the employee. That last option is plainly not rational in any sense.
gopher2b
@Ailuridae:
Hmm, three thoughts (1) Who’s insurance costs that much, jesus. I have two kids and really good insurance and my all in (including employer amount) is less than $15k per year.
(2) I think one of the purposes behind this bill is to force people off of 0$ deductible insurance. This would drive costs down by forcing people to become consumers and not just beneficiaries of health care.
(3) This will hit people who work for small businesses the hardest because their pool insurance costs more so they’re more likely to exceed the threshold without actually having better insurance than someone who works for say Comcast.
bayville
@Mike Kay:
Okay you win. Since you have provided a slew of non-arguments and zero data to support your argument(?) you obviously have me at a disadvantage.
I am glad to see the corporations have succeeded in branding “The Cadillac” term to fuel class envy among us peasants. Congrats.
But the simple truth is that by 2014, a significant percentage of people making less than $80K per year will suffer a trickle down tax thanks to the brilliant excise tax intitiative while, more than likely, their health insurance will decrease in quality.
Call me crazy, but politically, I think that is an insane position for the “Party of the People” to take.
glocksman
@John O:
It may very well may, but considering that I’m both a ‘lower income wage earner’ and not in good health and use my insurance, I really can’t afford to take the gamble that Max Baucus is right.
Ailuridae
@gopher2b:
Hmm, three thoughts (1) Who’s insurance costs that much, jesus. I have two kids and really good insurance and my all in (including employer amount) is less than $15k per year.
Upthread I links to a really good post on the People’s View. CTRL-F on my name and you should be able to find it. Its currently something like 1% of individuals and 3% of families. Some of those are union members in high risk professions, some of those are union members who have historically been in high risk professions but are no longer and a huge portion are just really wealthy people whose employer wants to give them 0% deductible, minimal co-pay insurance.
(2) I think one of the purposes behind this bill is to force people off of 0$ deductible insurance. This would drive costs down by forcing people to become consumers and not just beneficiaries of health care.
That’s certainly some of it. The thing to remember is that both bills currently mandate that all insurers provide preventitive care in their plans at no costs. Its impossible to describe how much of the overall US economy is swallowed by health issues that could have been addressed at minimal cost early but instead were dealt with some time later at great cost.
(3) This will hit people who work for small businesses the hardest because their pool insurance costs more so they’re more likely to exceed the threshold without actually having better insurance than someone who works for say Comcast.
Small businesses are likely to be largely unaffected by this provision for a lot of reasons.
http://www.thepeoplesview.net/2010/01/anatomy-of-cadillac-tax.html – that’s the link I mentioned earlier.
BTD
@Mnemosyne:
Really? You haven’t? Ezra Klein, Jon Gruber – all the luminaries. It is THE argument.
That’s why the EPI wrote a rebuttal.
Interesting that you have never heard that,
Shawn in ShowMe
Even if a company could get away with it legally they risk losing all the customers in that employee pool to a rival insurer that plays by the rules. That’s a quick ticket to bankruptcy.
Bruce (formerly Steve S.)
The FDL/538 smackdown will have more informed participants than any of us could ever hope to be, so my take is more on the — god, do I have to say it? — optics of the thing [rinsing with mouthwash].
Obviously cost control is needed, as well as funding for the new subsidies, and there are several measures for it in the Senate bill, but which one is the most visible? The so-called “Cadillac tax”. Now, sell a bill with tepid cost control measures to the voting middle class. Tell them that some subset of them have to be moved to slightly poorer health plans. Fine, a small sacrifice for the good of the country. Now tell them about the other high-profile cost control measures in the Senate bill. Single payer, public option, or national exchange that will entail a sacrifice from the insurance industry? BZZZZZZZZZZT. Medicare expansion/buy-in that will entail a sacrifice from providers? BZZZZZZZZZZT. Drug re-importation that will entail a sacrifice from drug companies? BZZZZZZZZZZT. Surtax on million dollar incomes that will entail a sacrifice from the rich? BZZZZZZZZZZT. This will be demagogued as a welfare plan for the poor paid for by a tax on the middle class, with the “fat cats” giving up little.
But perhaps the bill will be improved, perhaps we’ll eventually get drug re-importation, and perhaps the Republicans are too stupid and unpopular to to get traction with it. We’ll see.
gopher2b
@Ailuridae:
Excellent link, thank you!!
My default position on taxes has always been to prefer the ones where I get to decide whether and how I pay (e.g. sales, real estate, capital gains).
There are probably fairer ways to raise this kind of income but I think there are other factors at work that the pols dare not raise (like moving people off of $0 deductibles).
glocksman
@Ailuridae:
Then why not tax based on benefit levels and/or percentage of premium paid by the employee (higher percentages would pay less tax or be exempt) instead of cost.
We used to have 100% coverage, both local hospitals in network, and low copays until the last contract 2 years ago, where we went to a single hospital network, 90-10% coverage and higher copays both for office visits and drugs.
The price difference between our old plan and the new one isn’t hard to figure out because my county government’s (link posted above) Welborn option #2 is our old plan.
Current 90-10 + single provider network plan cost: $6216.60 for a single worker.
Current 100% + both available local networks plan cost: $7509.84 for a single worker.
I can see why my employer wanted the 90-10 option as the cost savings spread out among a 1500 person workforce isn’t a small one.
That said, if I wind up paying ‘cadillac taxes’ on my 90-10 plan or worse, the benefit levels drop in order to avoid the tax, then the Democratic party has forever lost my vote.
That may sound selfish and it probably is, but given my $26k/year income, I’d be one heart attack away from bankruptcy under anything much less than I already have.
J.W. Hamner
There are only two options with cost control. Consume less medical care or pay doctor’s, nurses, and hospitals less.
That’s it.
So there are exactly zero ways you can enact cost controls that can’t be portrayed in the same unpopular manner expressed in this thread. Jon Walker can list as many magical pony political impossibility “options” as he wants… they all break down to the same two choices, and he and his FDL ilk are arguing in bad faith when they pretend that their favored measures don’t work out to exactly same thing that they are criticizing. It’s really annoying.
mcc
John McCain
John O
WAAAY OT, but the Colbert “Alpha Dog of the Week” segment got me to order my first Domino’s pizza in what must be 20 years. Maybe 30. I eat frozen pizza, but if I was gonna order one, it sure wasn’t going to be Domino’s. Not to mention their CEO.
Full disclosure, in Chicagoland, you’re much better off going with the local family establishments for pizza.
mai naem
@Mike Kay: If you’re above 50 it isn’t hard to pay above $600 and real easy to pay above $500. I know three people who pay bet. $550-$1000. Single,middle class. Not any great insurance either. One’s got relatively decent drug coverage and okay doc copays($35) but $750 for an ER visit and then a daily copay for several days if you end up in the hospital. The others got some ridiculous deductible($5K annual) and crappy drug coverage. Don’t know much about the last one except its BC/BS. I don’t think a “cadillac” plan is what people envision. Its a plan that people used to be able to get 15-20 yrs ago if they could afford a really good plan.
As far as being a hill to die on. At this point, I dunno, what should a hill to die on be? Should we just do away with the preexisting part of the law since that is about the only decent thing in the bill? Oh, wait, I am being a wacky naive DFH left of the left Rahmbobama hater. I better shut up.
Mnemosyne
@BTD:
THE argument for unhooking health insurance and employment is so that people will go to the doctor less? That’s their main reason? It’s not, say, making sure that people don’t lose their access to health care just because they lose a job?
I have a feeling you’ve misunderstood their argument.
Mnemosyne
@mai naem:
This tax does not apply to them. This is only for employer-sponsored plans. If your friends have private health insurance, they do not pay this tax.
If I misunderstood you and your friends are paying their employers over $600 a month to be covered under their group plan, they may want to have a talk with the human resources department, because they sure aren’t getting a very good deal.
Ailuridae
@John O:
My housemate and I did the same thing (also in Chicago). For a $5.99 pie it was surprisingly good. I hadn’t had Dominos in years’and its undeniably a huge improvement.
DougL (frmrly: Conservatively Liberal)
Classic BTD:
“I do not believe…”
“[…] it strikes me as bad policy.”
“I am fairly skeptical…”
“I believe it will…”
“I think it will…”
“In my view, no.”
All in one post…lol! Nice solid ground you have staked out there BTD.
Ailuridae
@J.W. Hamner:
In fairness to Walker he’s now arguing in good faith and his proposal to link the excise tax threshold to 165% of the federal plan is very reasonable.
BTD
@Mnemosyne:
I’m quite positive I have not.
Look, that’s the main argument. It has nothing to do with “not losing their health care.”
“Bending the cost curve” is the argument for the excise tax. “Bending the cost curve” is the argument for Wyden-Bennett.
This is not controversial stuff. Hell, it makes sense.
I could easily support Wyden-Bennett. The excise tax seem like a bad move to me.
BTD
@DougL (frmrly: Conservatively Liberal):
Is this suppose to mean something? You would prefer opinions expressd as gospel truth as opposed to accurately representing them as subjective views. More likely, you would attack no matter how the view is expressed.
It would be nice if the merits could be discussed.
Some folks clearly do not want to do that.
That’s ok . . . I guess.
DougL (frmrly: Conservatively Liberal)
Yes it would but for some reason that isn’t happening. The people who are laying down the facts are doing so to refute the misinformation being spouted as fact and interestingly they seem to be in support of the bill. The ‘opposition’ is pretty much twisting the details to fit their narrative which serves to keep the misinformed just that way and spreads disinformation to low information voters.
CalD
As I understand it, there are three primary factors driving the astronomical per capita cost of health care in the USA — i.e., the fact that we spend something like $5000 or $6000 per citizen, per year to keep a smaller percentage of our population no healthier than people are in countries that spend more like $3000 a head to cover pretty much everyone.
1. Services cost more.
2. We consume more services (per insured person).
3. Failure to deliver basic preventative care to a large chunk of our citizenry.
Reforming insurance industry regulation, fostering more competition among insurers, getting our pharmaceutical industry in hand and extending basic health care services to more people who lack them now basically attempt to address #’s 1 and 3 above. But short of a full-blown single payer system with some controls on who gets what, item #2 can only be addressed on the consumer end.
I can give you an example from personal experience. A couple years ago I was working for a mid-size corporation with pretty great health insurance. I developed a lump in my neck that my doctor was virtually certain was a harmless lipoma, 99% sure. In fact there was no reason at all to believe it was anything more serious and she quite frankly told me so. But because I had great insurance I ended up getting a $1200 head MRI anyway, just to be 100% sure.
In Canada or Great Britain, I would not have gotten that scan. Nor would I have any problem with settling for 99% certainty now that I’ve gone into business for myself and have health insurance with a much higher deductible. In fact I almost said no that time. But the MRI only cost me like $50 or $75 bucks out of pocket, so I went along with it.
The other problem with “Cadillac” plans as I understand it is that they are functionally a form of tax evasion on the employers part. Companies like to hand out more generous health plans in lieu of paying higher wages because there are tax advantages to doing that. So they say look, here’s a shitty raise but at least we’ve got a great health plan. Go get an MRI.
geg6
I know this thread is dead and I haven’t read it because I’ve already had the arguments. But I will only say that I’m thrilled that the POTUS and congresscritters I worked so hard for are going to fuck me over once again. I have one of these “Cadillac” plans. My employer values it at about $11K. It is not as great as everyone seems to think. My deductibles are high enough that I don’t use the health insurance or prescription plan; I simply don’t go to the doctor. At all. My dental insurance is used for a once a year checkup becuase that’s all I can afford. And now it’s going to be taxed in such a way that we will probably have an even shittier plan that I won’t be able to use either. It will probably cause me to drop the once a year dentist visit. And the idea that I will get a raise because suddenly my employer will be saving a ton of money is the most stupid and naïve notion, one that only people in the Village would fall for. But rich people won’t get taxed and working poor people will have insurance that they won’t be able to afford to use either, so it’s all good! Fuck this. I don’t give a damn about this bill any more. I have concluded that when it comes to big business (including insurance companies) and Wall Street, I am going to get fucked royally no matter who is in office. Obama is good about a few things, but the problem is that he’s not been good about any of the things I care about or that affect me and mine. Doesn’t mean I’d vote for any current Republicans, but I won’t be donating money I don’t have, spending time I don’t have on GOTV, or doing anything other than showing up at the polls on election day for him or anyone else. This is the last straw for me and, among my friends and colleagues, the sentiment is unanimous on that. I am not an Obot; I am a geg6-and-her-people-bot.
Xenos
@J.W. Hamner:
In some states there are insurance commissioners that allow for-profit insurance companies to take a profit of as much as 45%. More commonly for-profit insurance companies take as much as 25 to 30% off the top of every health care dollar, to be spent on overhead like marketing, executive salaries, and dividend payments.
By setting an excise tax you create a pretty hard price point. At some point these insurance companies are going to have to give up on some of their cut if they want to keep any market share. This will bend the cost curve, most certainly.
Also, the union members may have ‘Cadillac plans’, but the real target are the ‘Lamborghini plans’. Those are the ones that are used by corporations to pay out enormous, puffed-up benefits as a way to pay tax-free salary. There has got to be a cap on that sort of thing.
mcc
@Ailuridae: It seems like if the problem with the excise tax is that eventually premium rates will rise faster than inflation this is a pretty easy problem to fix in several ways. Couldn’t we also just give the HHS leeway to set the cost-of-living increase the excise tax is calculated from, instead of indexing it to inflation? That would allow the excise tax to have its hypothetical “cost curve bending” effects while still allowing a trapdoor to keep people from getting screwed in the doomsday scenario.
kay
@Xenos:
Insurance companies are fighting it tooth and nail, so I’m in.
Insurers Expect Big Hit in Final Health Bill
WASHINGTON — The health-insurance industry’s top lobbyist estimated Thursday that insurers will face up to $225 billion in new taxes and fees under a final health bill.
Insurance companies are pressing lawmakers to peel back a new tax on high-value insurance plans that President Barack Obama wants to include in the final bill. They also want to delay an across-the-board tax so it doesn’t kick in until the government begins distributing new subsidies to help lower earners buy insurance.
“Our fees are going to be well in excess of $200 billion, probably in the neighborhood of about $225 or so” over a decade, said Karen Ignagni, president of America’s Health Insurance Plans.
demimondian
@geg6: So you’re single, and your employer claims to spend 11K/yr on you? I suspect that he or she is lying.
Dr. Morpheus
geg6, maybe you should have read this thread rather than publicly humiliated yourself with that stupidly uninformed comment.
YOU WILL NOT BE PAYING THE TAX, THE INSURANCE COMPANIES WILL BE.
And that’s ONLY if you are part of a LARGE EMPLOYER’S POOL, NOT SELF-EMPLOYED OR A SMALL BUSINESS.
And it’s ONLY THE AMOUNT OVER AND ABOVE THE THRESHOLD.
Sorry, but fuck you and the rest of the firebaggers with a truckload of rusty pitchforks with your hysterical disinformation campaign.
The Raven
John, the bottom line is that the main goals of the excise tax appear to be: (1) to reduce short term costs so as to meet arbitrary budget goals; (2) to harm unions; and (3) to create conflict on the left. No-one who seems to know anything believes it will reduce health care costs, despite the marketing.
For those of you who object that this will affect very few plans, and base your information on what employees pay, the tax is on benefit values, rather than cost to the employee, so you’re using the wrong numbers. In any event, the value of the policies taxed rises considerably slower than the cost of health care. So it’s a time bomb.
For those of you who object that asking for a better deal is a pony, I remind you of the following table:
Total spending on health care, per person, 2007:
United States: $7290
Switzerland: $4417
France: $3601
United Kingdom: $2992
Average of OECD developed nations: $2964
Italy: $2686
Japan: $2581
Don’t know about a pony, but it would be nice to not to own a pig.
Mark
I know I’m 1000 comments deep here, but some of the arguments here are nuts.
There are people who have individual insurance and wouldn’t be subject to the tax who are worried about it.
There are people who don’t realize the tax is inflation-indexed and will likely be risk-adjusted too.
There are people who are complaining that 5 years from now, 10% of their health care premiums might no longer get a government subsidy.
There are people who earn well below the 350-400% FPL threshold and would be way ahead under the plan in the exchanges but have yet to internalize that, and so are complaining that their employer-provided health insurance might get a 10% smaller subsidy in 2015.
There’s even someone a few comments up who claims that he had a high-deductible plan that costs his employer $11,000. It. Is. Simply. Not. Possible.
All of you single-payer supporters out there who don’t like the excise tax: the American system is broken. It cannot continue. We cannot devote 20% of our GDP to unnecessary MRIs and third boats for doctors. The easiest way to get single-payer or some version of it is to destroy the employer-based system and put everybody in the exchanges. Asking the government to subsidize your employer insurance indefinitely is not a solution to our problems. Asking rich people to subsidize your employer insurance is not a solution to the problem (though asking them to subsidize the exchanges is).
A lot of comments here sound like the teabaggers: “Keep your hands off my Medicare!” You want the government to subsidize your group health insurance which is highly-regulated to save you money – and you don’t want any cost controls on that subsidy, going so far as to concoct ridiculous hypothetical situations that won’t come in to play for a decade.
Sorry, but while so many people can’t afford insurance or can’t get it at any price, you shouldn’t be excused from paying in to help them get it, and you shouldn’t be worried about the excise tax any more than you should be worried that Obama is going to let the tax cuts for income above $384,000 expire.
Glocksman
@Dr. Morpheus:
Like I pointed out earlier in my replies here, it’s not unreasonable to assume that lower income taxpayers who have the misfortune to either be unionized or work for an employer who decided that healthcare was more important that a fifty cent payraise might feel victimized by this plan.
God knows that Senators Lieberdouche and Bitchdreau didn’t do much to dispell this perception when they said that a tax hike on people making $500k or more a year was ‘unacceptable’.
Fuck that and fuck them.
In other words, take your self righteousness and shove it up your ass.
Sideways. Without lube.
Though if don’t care for that, you can go take a flying fuck at a rolling doughnut.
DougL (frmrly: Conservatively Liberal)
@kay:
I’m hearing about all of the unfortunate middle class and their having to pay out the nose for the “Cadillac Tax” but IMO the people who are really dead set against this are the CEO’s and other executives who have platinum medical plans that are little more than income taken off of the tax rolls.
They and the insurance companies are dead set against this because they are going to be the ones who pay out the nose once that platinum tax-free plan is no longer tax free. They can’t come out and say this directly because nobody will give a shit so it is easier to shill it as a tax on the middle class.
Right now I personally know of three middle class people who will be affected by this “Cadillac Tax” and all three are union members. They are California prison guards and the benefits their union has negotiated with the state are helping to drag California into bankruptcy. What is hilarious is that I have heard about how the horrible auto workers and their unions have destroyed our auto manufacturing sector from all three of these “union” members. It seems that their union is just fine, it’s the other unions that are fucking up the country.
All three are solid gold Teabaggers. Also. ;)
I sure would like a breakdown of private versus public union members and how the “Cadillac Tax” breaks down among them. Toss in the executives and their platinum plans just to fill in any voids. I have a feeling that this would lay it out in a way that the public would better understand. The broad-brushing of how this or that aspect of the HCR bill is going to affect the “middle class” isn’t really informative.
That’s the plan though, a low information voter disinformation campaign.
Ailuridae
@The Raven:
Even for you that post is cravenly dishonest. Do you even know what intellectual integrity is? Are you so fixated on single-payer that you will choose to tell easily refuted lies in every thread here relating to HCR here?
For those of you who object that this will affect very few plans, and base your information on what employees pay, the tax is on benefit values, rather than cost to the employee, so you’re using the wrong numbers. In any event, the value of the policies taxed rises considerably slower than the cost of health care
Everybody is talking about the total value of plans. From the KFF here is where things currently stand:
The Kaiser Family Foundation, in its Employer Health Benefit Survey found that in 2009, the average cost of employer-sponsored coverage for individuals was $4,824 per year, and for families, $13,375 per year. Note that both amounts are little more than half of the prices of health insurance plans where a so-called Cadillac tax would kick in. The survey further finds that that 2% of workers with individual coverage have a plan that costs $8,000 or more in premiums and only 4% of workers with family coverage have plans with premiums greater than $20,000. Given the floor for the Cadillac tax is even higher, $8,500 and $23,000 respectively, a very very very small percentage of workers have plans that are that expensive. In other words, 98% of workers with individual policies from their employers and over 96% of workers with family coverage do not currently fall under this penalty
Currently its less than 2% of individuals and 4% of families with employer sponsored coverage fall into a wider net than the one the excise tax casts this year. Stop repeating the same stupid, easily refuted lies.
Glocksman
@DougL (frmrly: Conservatively Liberal):
Doug.
That’s as of this moment and it also assumes that the ‘cost controls’ in the Senate’s plan will work as advertised.
Personally, for reasons outlined earlier, I doubt that the Senate’s plan will perform as advertised and I also doubt that if it does not, they will fix the problem.
Putting it bluntly, the people who encourage this $13/hr union worker with good insurance to accept this shit sandwich are literally telling me to bet my life* on it.
I’m afraid I must decline.
*Again, I only make $25k/yr, have had 2 major surgeries in 10 years and anything less than a 90-10 plan would literally bankrupt me if I had to be off again for another surgery.
Considering the medical insurance inflation rate over the previous 10 year, do you wonder why I say ‘fuck you’ to anyone who proposes to tax insurance plans over $8k/yr without (and this is important) tying that tax to the medical insurance inflation rate instead of the much lower general inflation rate.
Xenos
The anti-union issues here seem like a red herring. I suppose it helps to claim the bill is anti-union when selling to some blue senators. But if this bill takes an advantage that the unions have bargained for and limits it, the problem only lasts as long as the current contract. And since this bill takes a couple years to kick in, where is the harm?
Unions can go in and negotiate for the lower amount of medical coverage and get the difference in some other benefit or in pay. Pay increases! Now there is an idea… Since the minimum wage has gone up, that should be pretty doable.
Now of course these union members may be like a lot of upper-middle class folks I know, for whom gold-plated benefits are an important social marker and a critical issue over which prestige is measured…
Ailuridae
@DougL (frmrly: Conservatively Liberal):
A huge portion of the people with the Cadillac plans (or larger than you would expect at least) are going to be municipal firefighters who have been getting fleeced into high cost plans for a while now.
Glocksman
@Ailuridae:
Perhaps (probably certainly, as we don’t have much competition here) other areas have lower insurance costs due to competition and other factors not applicable here, but I you’re saying I’m lying WRT the costs in my area, then you can DIAF.
If not and I misunderstood what you were saying, my apologies.
The Raven
@Ailuridae: “Everybody is talking about the total value of plans.”
Actually, no, people cited employee costs right in this thread. See, for instance, les@94. (My apologies, Les. I really didn’t want to call out particular people on this one.) You then go on to cite a Kaiser Foundation summary of current costs. Current costs, as you know very well, are not relevant; it is costs as they rise.
It is not me who is making deceptive statements, here.
Croak!
Ailuridae
@Xenos:
The anti-union issues here seem like a red herring. I suppose it helps to claim the bill is anti-union when selling to some blue senators. But if this bill takes an advantage that the unions have bargained for and limits it, the problem only lasts as long as the current contract. And since this bill takes a couple years to kick in, where is the harm?
Ah reason. My sweet friend reason. To assume that unions are going to get fucked by the excise tax is to assume their leadership is stupid. To assume that in a little less than five years they don’t realize that their plans will be subject to this tax and to push for compensation in different areas. Alas, I don’t think either unions or their negotiators nor their adversaries in the negotiation process are fucking stupid so I don’t think that they will just get run over here.
The Raven
BTW, for people who are objecting that the excise tax is indexed to inflation; it is indexed to the CPI+1%. Rising health care costs have consistently outstripped this index.
Ailuridae
@The Raven:
No, thats not what less argued at all. He just broke the costs into his contribution and his employers contribution. Nice try though.
This is all BS regardless. I was talking about current plans to provide a baseline. Here is a pretty definitive take on where this will leave America in 2019:
http://www.thepeoplesview.net/2010/01/anatomy-of-cadillac-tax.html
As always, you are arguing with an agenda and are wholly misinformed or deliberately lying.
Ailuridae
@The Raven:
The CPI is inflation so its indexed to inflation +1%. Its not indexed to the cost of the increase in health care costs which people are tossing around as the medical inflation rate. Of course its designed to help lower the rate of increase in the cost of health care so indexing it to that doesn’t, you know, make any fucking sense.
Glocksman
@Ailuridae:
I am both a union member and a member of the local’s bargaining committee.
As such, let me dispel a myth or two.
First off, the company’s goal (unsurprisingly) is to hold the total cost of compensation down to to lowest level possible.
Now if you’re willing to tell me why I should frankly risk death due to a stroke because the US Senate is unwilling to tax those with $500k incomes, while taxing those of us who only make $25k or so a year but happen to belong to a union which had the foresight to bargain for the best deal available for their members is acceptable, I might be amenable to reason.
If you can not, let’s just say that I’ll be standing with the Teabaggers in November if healthcare is the deciding issue..
Ailuridae
@Glocksman:
Jeebus, stop with the drama.
I know what the company’s goal is. This puts an effective cap on how much they can spend tax free on your health care. That’s all it does. It doesn’t assure that you won’t have health care.
Now if you’re willing to tell me why I should frankly risk death due to a stroke because the US Senate is unwilling to tax those with $500k incomes, while taxing those of us who only make $25k or so a year but happen to belong to a union which had the foresight to bargain for the best deal available for their members is acceptable, I might be amenable to reason.
Explain a realistic situation where an excise tax on health insurance companies of 40% for plans over 8.5K per individual puts your life at risk due to a stroke. How is this plan going to leave you uninsured?
Glocksman
@The Raven:
Indeed.
Personally I think it’s just as easy for DLC ‘liberals’ to insist that my hard won unionized benefits be taxed while refusing to impose a surtax on the genuinely wealthy as it was for Lieberdouche to do a 180 WRT his previously stated positions and the MSM to swallow it down whole.
If I’m wrong, then the easy fix is to change the Senate plan to reflect the income difference between a Goldman Sachs exec with a $500K income versus that of a union worker making $25k, but who happens to have the same coverage level as the GS asshole thanks to previous generations who struck to insure it was so.
The Raven
@Ailuridae: “No, thats not what less argued at all”
I’m reading him differently from you and reviewing him, I’m not sure which of us is correct. There is no mendacity involved, though perhaps there is error. I recall other posts that seemed to reference employee out-of-pocket expenses.
And the article you cite contains the following quote:
The CBO does not expect that the excise tax will reduce health care spending so what there will be is cost shifting–people will be paying more, one way or the other. Did you miss that paragraph?
BTW, I have not called you misinformed or mendacious. I don’t think you are; I just don’t agree with you.
BTD
@DougL (frmrly: Conservatively Liberal):
Your views as “facts.”
Therein lies the issue.
Glocksman
@Ailuridae:
My larger point is that there is literally a set cap on the level of coverage that is acceptable WRT those of us who have the misfortune to belong to a union that saw this trainwreck coming, while those who benefited the most from the Bush taxcuts (paid for by yours truly) sake away tax free for the most part.
As I’ve repeatedly stated, if the sacrifice level is even remotely equal I have no problem with paying higher taxes.
That said, If I could have 20 minutes totally alone with Lieberdouche and Bitchdreu, I’d gladly pay the tax, because ‘teh base’ would love to pay me a million or more for crippling Liberdouch or Lanbitch.
DougL (frmrly: Conservatively Liberal)
@Ailuridae:
Oh I do understand that people like firefighters are going to take a hit (though there will be an exception for high risk jobs that might apply to them) and the reason was the trading off wage increases for better health plans. While they may not get any coverage losses back as wages there is nothing to prevent them from negotiating better wages to replace the lost benefits at their next contract negotiations.
Glocksman: “Personally, for reasons outlined earlier, I doubt that the Senate’s plan will perform as advertised and I also doubt that if it does not, they will fix the problem.”
I can respect that position but I counter that thought with the point that if something is so bad that it is affecting a large number of voters then the politicians are put on the hot seat to do something about it. We are not going to get a bill that has everything that everyone wants, it just can’t be done even though too many seem to think it can. Any bill is going to have its positive and negative points to it, its winners and losers, there is no way to avoid it.
People want change, they just don’t want it to happen to them if it isn’t what they wanted. I expected lots of yelling about this and I haven’t been disappointed. This plan isn’t perfect but it is a move in a different direction and it has the insurance companies fighting tooth and nail to stop it.
If they don’t like it then it has to have some good aspects to it. Kind of like movie reviews, if they say it sucks then I know that more than likely it is going to be a good movie. ;)
The Raven
@Ailuridae: “Are you so fixated on single-payer…”
No, actually. I think a well-regulated insurance system can work (Belgium, Switzerland, Germany), I think a public option can work (not sure if there’s any current implementations), I think single-payer can work (Medicare), I think a socialized system can work (British National Health Service.) But the Senate plan (and it is apparently the one Obama is backing in preference to the House plan) is none of these, and I think it’s going to prove very difficult to change once enacted.
In any event, this bird has to fly away for the evening. Good night!
Ailuridae
@The Raven:
The CBO does not expect that the excise tax will reduce health care spending so what there will be is cost shifting—people will be paying more, one way or the other. Did you miss that paragraph?
Health care costs isn’t health care quality. That’s largely the issue. As it stands the current situation encourages employers to provide tax-free revenue to insurers who then are far less encouraged to demand cost controls of providers. Providing a ceiling to the untaxed subsidy to private insurance encourages competitors to price plans below the threshold and creates an incentive for market efficiencies that doesn’t exist right now. In a market with 4-5 insurers all will create a plan below the threshold to avoid the tax, they’ll find better ways to deliver services by cutting internal costs and squeezing providers (again, who are the source of the great majority of health care costs in the US().
BTW, I have not called you misinformed or mendacious. I don’t think you are; I just don’t agree with you.
That’s because you can’t find any evidence of me being misinformed or mendacious. I argue in good faith, citing actual facts. You, well, not so much.
BS. Les point is clear. More importantly 75% of the comments here have been between a handful of well informed posters who would never make the mistake you were “addressing”. Much like someone needs to address a single-payer absolutist in every one of these threads who “innocently” thinks that their individually purchased plan will be subject to the excise tax. Its a basic FUD strategy and its entirely dishonest.
DougL (frmrly: Conservatively Liberal)
@BTD:
I don’t headline a blog dipshit. I’m here to ingest, not convince. Press reset and try again.
Ailuridae
@The Raven:
So the Swiss and German plans effectively limit the profitability of insurance providers by treating them as quasi public utilities. The Senate plan, specifically the Franken amendment limits the profitability of health insurance companies by setting medical loss ratios. The Swiss and German systems work but the US system can’t. How’s that?
Ailuridae
@Glocksman:
My larger point is that there is literally a set cap on the level of coverage that is acceptable WRT those of us who have the misfortune to belong to a union that saw this trainwreck coming, while those who benefited the most from the Bush taxcuts (paid for by yours truly) sake away tax free for the most part.
No the cap is on income paid tax free. Its unfortunate that this affects unions disproportionately.
Again, you wrote that the excise tax greatly increased your chance of dying from a stroke. It doesn’t and that’s a pretty broad and easily refuted statement. Please address how the excise tax could leave you without insurance.
Ailuridae
@DougL (frmrly: Conservatively Liberal):
Its strange that he would single you out. As I am here and thrilled to argue the minutae of the excise tax (which I think is a necessary part of HCR but, like the individual mandate, is something that doesn’t thrill me) with anyone.
Is there a blog named BTD that I am not familiar with? Is it a serial killer blog?
DougL (frmrly: Conservatively Liberal)
@Ailuridae:
Armando (BTD) is old news and I know him from the Great Orange Satan Pie War though he probably couldn’t identify me from over there. I have taken my share of shots at him when he comes up (or over) here because he is an easy target, kind of like shooting at the ground. He just thought he saw an opening for a shot at me and took it and the resulting ricochet. ;)
I used to frequently read TalkLeft but I gave that up when that place went off the rails during the
Great PUMA UprisingHillary campaign. Jeralyn tried to right the ship afterward but it still merrily sails along, listing all the way with BTD getting everyone to run to the low side of the ship.BTD does have some good posts at times but they are quickly lost in the sea of stupid ones.
I’m minimally engaged on this issue because I know how the sausage-making process works. I can wish for all I want but there is this pesky thing called reality that my wishes comes up against. I know I’m not going to sell anyone on this issue over the internet so why waste the time? But I do like to nutpick comments and BTD is an easy target.
Of course I am only speaking for myself. ;)
Rick
Well, let’s see. As a liberal I’ve watched Congress give up on:
1. Single payer
2. Public option
3. Government drug price negotiation
4. Drug reimportation
5. Expanded medicare
6. Reproductive freedom unless you’ve got the money
7. Ending anti-trust exemption
Now you want to tax me the same dollar amount as the $6mil/year CEO of my company on my family health plan so:
1. Preexisting condition denials can be enforced by the states
2. Subsidies for “insurance” can be paid to the group of people between medicaid and decent employer insurance, with no guarantee of that amount of money actually providing adequate care
It wasn’t the first hill I was ready to die on or the second but eventually it becomes apparent that if I don’t pick a point to call no more I’ll eventually be arguing that congress can’t take away the lube you’re using to help screw me with.
Mary
John:
I feel that you have really done us a service by posting these honey pot threads on health care, which cause so many misinformers to come swooping into the thread because it helps us sort the truth from the lies. I want to particularly call out those posters from FDL who came in here and misstated basic facts. You are a disgrace. For six months or longer you have touted your site and solicited donations for so-called expert advice which turned out to be untrue in significant respects. One of the posters here, Ailuridae, had the grace to say your house expert, Jon Walker, is now arguing in good faith. Not that we should give a damn, who would ever trust this so-called expert or your website on any matter again?
I want to thank Kay, Xenos, Ailuridae, Memosyne, Tom Hilton, Mike, J.W. Hammer and Mark (and I’m sure I’ve forgotten a name or two from previous threads) for correcting the misinformation and presenting us with good faith, truthful arguments and good solid facts. I can’t tell you how much you have helped me sort out what is going on with the health care bill. Thank you, thank you, thank you.
Mary
And Doug L too. Thank you.
Ailuridae
@Mary:
Thanks
DougL (frmrly: Conservatively Liberal)
@Mary:
Me or the other DougL here? I need to pick a unique handle…lol
If me I would have to say thanks but I am doing little more than nutpicking and talking to the reasonable people here, and that ain’t doing the heavy lifting. I like this place because of the wide variety of opinions and thoughts on varying subjects. This place can shake, rattle and roll but it seems that sanity eventually comes to the top. There are some very talented individuals here who are very knowledgeable on a wide variety of subjects, same with others here who just know how to discuss a topic and cut through the bullshit.
The rest is a road show and who knows who will be performing for us here next week. ;)
Mary
@DougL (frmrly: Conservatively Liberal): You, DougL. You’ve told me before that you are not doing the heavy lifting but you make a lot of good common sense points, not to get too specific.
And as for the heavy lifters here? Wow.
The Other Steve
It’s not really a tax.
It’s just a limit on what you can deduct.
mai naem
@Ailuridae: Actually there is an exception in the Senate plan for the medical loss ratios – there can be exceptions if the folks in charge decide that a particular area needs to have higher loss ratios which in effect means that if you have a Bush-like admin. they can just make up some crap reason to increase the loss ratios. And whoever upthread said they were with it because the insurance cos were fighting it…first the insurance co. has pretty much fought everything tooth and nail. Second, I’m against it because the unions are fighting it. At this point I trust unions over Obama who seems to be willing to give away everything just so that he can have something to sign.
@Mnemosyne: Mike’s quesion was what middle class person pays $600 not whether their portion was $600.
@Rick: This. Says it way better than I would ever be able to say it.
One last thing – I would love the exchanges except you can’t go into exchanges unless you can’t get insurance through your employer so can have an employer give you a shittier than shit plan and you are stuck with it.
The Raven
@Ailuridae: “I argue in good faith, citing actual facts. […] Les point is clear.”
Modest, too. And you always tell the truth, understand everything correctly, and read everything exactly as the author intended. We know because you tell us so.
Personally, when a someone praises their own character and judgement in an argument, I doubt them, and the more they do it, the more I doubt them.
@Ailuridae: “The Senate plan, specifically the Franken amendment limits the profitability of health insurance companies by setting medical loss ratios.”
Ah. That was added very late and I didn’t know about it. That was a very great error and I apologize for it. I agree the F-R amendment it is a very great improvement–in fact it addresses one of my biggest problems with the Senate plan. However, I see a huge problem of enforcement. It also creates a perverse incentive for insurance companies to raise their profits by spending more on care. Returning to enforcement, I have watched the enforcement of financial regulation be reduced and reduced over the past 30 years. We are now at the point where major banks jeopardize the entire world financial system and are rewarded for the behavior. What reasons can you give me for believing that major insurance companies will not be similarly allowed to abuse their customers?
David Dayen, talking to Senator Franken about the issue of enforcement. Includes a consult with former insurance man Richard Escow. Here. Escow’s own remarks on the subject.
Escow:
Mark
Rick@248
Why not enumerate what there is to like about the bill:
1. Establishes the principle of universal health insurance
2. Enrolls everyone in health insurance
3. Community rating (with elimination of pre-existing conditions and such)
4. Increases access to Medicaid
5. Eliminates the federal subsidy for high-cost health insurance plans
6. Limits maximum total health care expenses for individuals and families
7. Attempts to make health insurance affordable for those under 350-400% of FPL (we’ll see how successful it is)
8. Attempts to generate competition among private plans (again, we’ll see how successful it is)
9. Attempts to cut costs in various places that will supposedly not impact care (this has never been attempted before)
As someone with mediocre employer-provided insurance who makes over 400% of FPL, I don’t stand to benefit from this bill in the short-term. But I can see its value. Nobody was going to slay the drug companies, insurance companies, doctors and hospitals in one legislative session.
I understand that you want to keep your employer health insurance. Well, the truth is that even in the medium-term, you can’t. We simply can’t afford to have it – it takes part of your salary, combines it with a government subsidy, and doles it out to the insurance companies and the doctors and the drug companies. If you want to keep that status quo, then we can’t solve this problem.
The Raven
And here we have Escow on (among other things) the number of employee plans affected by the excise tax (one in five.) I like the this Communications Workers of America report (the source, obviously, has a dog in the fight); lots of footnotes and citations, some to peer-reviewed sources.
Mnemosyne
@mai naem:
Mike’s question applied to the situation at hand, which is employer-sponsored plans being subject to an excise tax. Since the tax does not apply to private insurance, his question was what single, childless middle-class person pays their employer $600 a month for insurance.
If you want to change the subject to the high cost of private insurance, we can do that, but we should all be aware that you’re changing the subject away from the excise tax since the excise tax does not apply to private insurance, only employer-sponsored insurance.
(Edited for clarity)
DougL (frmrly: Conservatively Liberal)
@The Raven:
That is one data point I have already read and while it is a data point I would like to see a report about governmental versus non-governmental union members and the way the “Cadillac Tax” would be distributed among them. One in five is 20% of the population, which isn’t really that many, so I would like to see details about how these people are affected (tax distribution-wise) and if they are in the private or public union sector. IMO that would be more useful than a blanket statement like “1 in 5”.
Blanket statistics tend to hide more data than they reveal though I believe that is the intent of them.
@Mary:
Thanks! Yes, the people we have here are excellent to read and engage. It’s a small niche of sane amidst the insanity.
Glocksman
@Ailuridae:
It does if the tax provides an incentive for my employer to offer shittier coverage in order to avoid the tax.
You just aren’t looking at it from the perspective of someone like me who simply doesn’t make all that much money each year, but who had the good luck to work in a union workplace with decent insurance when the health problems started to show up.
If you and the others who support the Senate bill can convince me that I personally will not suffer a loss in coverage or income so long as I remain a lower income union worker then I could change my mind.
IOW, a tax on insurance based on both benefit and income level I could live with.
As it stands, I see the Senate’s bill as a direct attack on those who’ve sacrificed higher wages in order to secure decent health insurance for their families.
Especially as some alleged human beings…er Democratic Senators have gone on record as stating a tax hike on incomes above $500k/yr is ‘unacceptable’.
Glocksman
Thinking about it more, a sort of sliding scale of taxes and incentives that would result in working Americans (obviously non workers would have to have the entire thing paid for) receiving coverage along the 90-10 level I already have might not be a bad idea.
I personally have no problem with the idea of paying higher taxes in order to finance UHC.
My problem is that the Senate seems to have fixated on the one means that both disproportionately affects unionized workers and lets the ones who genuinely benefited from the train wreck of the last 30 years skate away yet again.
What the fuck ever happened to the idea of shared sacrifice?
Of course all of the above presumes that you don’t believe the cost saving estimates issued by proponents of the Senate bill.
Perhaps it’s my inner wingnut speaking, but frankly I do not.
The Raven
@DougL (frmrly: Conservatively Liberal): It’s one in five employee plans, not one in five people. The CWA excise tax report estimates 25 million households by 2019–perhaps 58 million people. A quick review of the report leaves me feeling that its conclusions are plausible: sources are cited, and they are reliable ones: the CBO, the KFF, and so on. See also the Milliman briefing paper by Robert Dobson. Dobson makes an interesting point, and one that is new to me, but seems nearly self-evident once made:
Ailuridae
@Glocksman:
You just aren’t looking at it from the perspective of someone like me who simply doesn’t make all that much money each year, but who had the good luck to work in a union workplace with decent insurance when the health problems started to show up.
If you and the others who support the Senate bill can convince me that I personally will not suffer a loss in coverage or income so long as I remain a lower income union worker then I could change my mind.
You’re arguing from personal experience. Earlier you claimed with the excise tax you would die of a stroke. Defend that statement or admit it was fucking hyberbolic bullshit. Defend your fucking indefensible statement.
Its not an either/or to solve long term health care spending. The excise tax is needed. Increased tax revenues are needed to pay down the deficit.
Also less expensive coverage shittier coverage.
DougL (frmrly: Conservatively Liberal)
@The Raven:
Yes, one in five plans, which is still only 20% of plans. I dropped the ‘members of plans’ because they are the ones we are talking about, not the people who it doesn’t apply to. It’s still next to useless data without some kind of breakdown as I stated above. Same with the numbers affected; how many are in public unions and what is their cost versus the number in unions in the private sector and their cost.
When the spread is 25 to as many as 58 million, someone is not being clear with their data.
mai naem
@DougL (frmrly: Conservatively Liberal):
I may be mistaken but the way I read it, its 25 million households vs. affecting 58 million individuals. Not much of a spread.
BTW why aren’t HSAs eligible? HSAs are usually used by the wealthy for yet another tax shelter. Granted I am going by a CWA report but it does seem objectively obvious that this tax is regressive. What is $2600 in extra tax to Lloyd Blankfein’s $154 million dollar GS compensation vs. $1100 to some woker making $75K?
geg6
Just love how people are telling me that my employer is lying to me and that the cost of my health care plan is impossible. I guess I’m too stupid to read a contract that I sign every fucking July 1. Also love how I’m being told I’m a firebagger because I said I don’t care for the Senate plan the president is pushing. I am not a firebagger. I’m absolutely pissed over this and have decided to quit being an activist over it even as I’ll continue to vote for Dems, so that makes me a firebagger and I can DIAF. And I’m being told I’m nuts, uninformed, and an idiot? Riiiiiight. I just don’t care whether this passes or not. I’m getting fucked either way since whatever happens, I will be stuck with a health insurance plan I can’t afford to use and the wealthiest of the wealthy will feel no pain whatsoever. This is how it has always been for my entire adulthood, so I guess I shouldn’t be surprised. What does surprise me is that I am being savaged by people who are marginally on my side because I disagree with the Senate bill, which is demonstrably worse than the House bill, and am fighting against it. I am puzzled by that and have wonder why. I can only guess that perhaps those who personally attack me either belong in that top 1% of earners who would pay higher taxes under the House bill or won’t be affected by this excise tax so they have no dog in this fight. So forgive me if I dismiss your bullshit. And keep fighting to get the House bill passed. Personally, I trust Nancy Pelosi to fight for me more than Obama, the Senate, or the Senate bill lackeys here.
Xenos
Geg6-
I would not say you are full of it, but I think you overstate the negative affect that the tax would have on you. And I don’t mean to be making an apology for the Senate bill, just that arguing that it is somewhat rational and somewhat fair, and should be an acceptable compromise.
The fact that we are all so insecure in our access to health coverage leads us all to panic at the possibility of change, even when we want it.
I think this whole miserable debate has a valuable if bitter lesson to it – per Fallows, we are going to have to make the system work within the structures we have now. One of those unmovable structures is that big finance and big health are in bed together and have the whip hand over the sausage making in our political process (mixed metaphors are an art). We are not going to get satisfaction through politics, not for decades, at least.
So what do we do? What sort of mischief is appropriate? How to take the battle directly to the enemy? If revolution is necessary, how to do it? Non-violence is, of course, an absolute. But we need to start fighting, somehow.
DougL (frmrly: Conservatively Liberal)
Good morning! Life’s a bitch, then you die.
Carry on. :)
kay
@geg6:
I believe you that it costs 11k, and you’re not happy with the services, because one of the big arguments is that people with the more expensive plans don’t have better outcomes.
You’ve said in past discussions that you can’t really access this plan you have, geg, and I believe that too. You’re basically healthy and you go around the plan (to university health services) for basic preventative care, because it’s less expensive.
So I have to ask why you want to spend 11k a year on it. You’ve said you don’t have any real role in negotiating this contract, and that’s not unusual either, but you must have some entity that acts on your behalf, if you’re being presented with a contract to sign every July.
They’re not serving you very well if they’re presenting you with a plan that costs 11k a year that doesn’t even remotely serve your needs.
Say the Senate bill goes in. The bargaining entity that (purportedly) represents you goes in knowing the terms have changed. The insurer, or your employer if they’re self-insured, have a different set of wage terms to move around the board. If your side can’t make you come out at least even you need a better negotiator.
The plan never had 11k of value to you, in any practical sense, and if you’re paying 11k a year for 2 pairs of eyeglasses and a prescription card someone is coming out way ahead in that deal, and it’s not you. You have insurance out the ass but you end at up university health services. They can call it a “great plan” but what’s so great about it?
My bottom line is you’re not even happy with this plan you have, and you’re paying through the nose for it. Who benefits from that situation? Who benefits from the tax break?
lawguy
Well, let’s see. Here in SE Ohio about 60 miles from WV, in a mostly non-unionized area a plan provided by the county where I work costs $17,000.00 this last year. It has large deductibles and large co-pays, so…………Your point would be that……in large cities with unions the tax is on the union workers in one form or another.
Tax the middle class but not the wealthy. My bet is that when all this stuff goes into effect (with no improvements) you’ll be doing the “who could have predicted” dance, just like with Iraq.
Mary
Here is Senator Kerry confirming that the so-called progressives who are arguing against the excise tax are making right wing arguments in order to kill the bill. http://www.huffingtonpost.com/john-kerry/why-this-progressive-is-s_b_414968.html
I am sure it killed Arianna Huffington to have to print this to counter some yahoo named Escow who is suddenly the go-to source for our “progressive” friends from FDL–those “progressives” who are so enlightened that they have explicitly decided to make common cause with right winger Dick Armey’s teabaggers and right winger Grover Norquist. Dick and Grover, of course, have been conducting manipulative grass roots lobbying forever.
geg6
@kay:
There is no entity that bargains for me. I am not union; I am considered professional staff. I am presented with a contract every July 1. I either sign it and keep my job or I don’t and lose my job. I would prefer to have the cash as part of my salary. Since I don’t use the insurance, it is worthless to me but I am not allowed to opt out. I have no leverage whatsoever in the situation. My salary and benefits are dictated to me and there is no negotiation on my part, my department head’s part, or the faculty union’s part since I’m not faculty. Knowing how things work around here, I know that the Senate bill will not make anything better. What will undoubtedly happen is that I will get another plan with much higher co-pays than the one I already have. This has been the MO ever since I got here over a decade ago. When I first was hired, we had a choice of 10 different plans. Those plans were eventually whittled down to two about 5 years ago. Three years ago, we were informed that there would be no more choices, that we’d all be on one plan. Since 2004, I have had no more than a 1.5% raise. In 2008, we were informed that we would have no raises (and understand that I don’t get paid a lot to begin with). And my contribution to the premium for health insurance has steadily increased from the $30 I paid when first hired to a little over $100/mo. This may not seem like a lot of money to some, but $100/mo. is a lot of money for me to pay for something I can’t use. I do not expect to see a penny in increased salary from any purported savings the university will supposedly save.
As I said above, I really don’t give a damn any more about this. I’m going to get screwed no matter what happens. I just want to move on. Perhaps a thorough screwing of the banks and investment firms through a financial reform bill will make me feel a bit better (though I have no hope of this either). But I won’t forget this. Nor will I forgive those who promised things like no tax hikes on the middle class and public options of some sort for HCR. I’m a Dem through and through, but I’m not stupid nor am I a patsy.
Mary
I’m sorry you don’t have a union, Geg. Unions are good. I wish we had more unions. A union would be able to get you gains in your paycheck in light of the new law.
geg6
@Mary:
I agree. But the faculty union and the union representing the maintenance and custodial staff have no desire to organize mid-level professional staff like me. I come from a tradition of union. My father was a steelworker and my maternal grandfather was a local organizer for the USW when they first began organizing the steel industry back in the 1930s. He was beaten to a pulp numerous times and my mother grew up in a home where there were death threats on a regular basis. My sister, a faculty member at another university, is a member of the AFT. My brother-in-law, a secondary school teacher, is a member of the NEA. Believe me, I’d be thrilled to be a union member. My fellow mid-level professional staff at state universities here are members of the state employee union. Since my university is one of the four state-related universities (nominally public, but get less than 10% of funding from the state), we don’t qualify for the state employee union. Rock and a hard place, that’s where I sit.
kay
@geg6:
All good points, and as we’ve discussed before I want the excise tax because I think it’s a way to decouple you from the system you’re in, where you have no choice but to accept a purportedly high value insurance policy that doesn’t have a lot of value to you, year in, year out, although it would have value (I hope) if you got really slammed with a serious illness.
I’d also like to start thinking about this in a different way. This doesn’t apply to you, but it really is true that more expensive care doesn’t equal better care. I’ve had state insurance, I’ve had federal insurance, I’ve had a private policy, and I’ve had no insurance. The best quality care I ever got was at a county health center where I paid cash on a sliding scale. It was comprehensive in a way that the “medical model” is not. They treated the physician as the expert, and almost as a case manager. The care was actually delivered by allied professions. I would choose that type of team approach to care. I prefer it. I want a Bernie Sanders clinic. Sign me up. I’ll be the test case.
I want them to address the inequity with a tax on high income, in addition to to the excise tax. It’s now almost beyond question that our economic and tax policy over the last ten years benefited the top 5%, and it’s time for some redistribution.
We distributed it UP.
If free market folks object to that, I’d like to repeat: we redistributed it UP. Deliberately. As we found out, they weren’t all that competitive, and they got lots and lots of help to rake in those big paydays. We can deliberately send it down.
Mary
Geg:
Do you think it’s possible that a lot of your your doom and gloom comes from a right wing grassroots lobbying campaign directed against you?
I was all doom and gloom too, before I realized that I was being manipulated.
The right wing thrives on fear and unhappiness and the message that the Democrats are hopelessly corrupt and no better than the Republicans.
They conduct sophisticated lobbying campaigns selling this message and they co-opt “useful idiots” on the left to help sell their message to people like you and me.
kay
@Mary:
I think it’s probably unlikely that there’s going to be a dollar for dollar exchange, because we’re talking about insurance.
Geg wasn’t getting a straight 11k in value, because that’s not the nature of insurance, to her. She was getting 11k worth of protection against a loss.
There will be losers. The high value plans (again, I hope) are probably great for people with serious medical issues. They actually get all that 11k in value every year, and maybe more. Those people will lose, if taking the policy down to 8500 means they lose coverage on what is essentially extraordinary use.
geg6
@Mary:
Um, no, I do not. I have read the text of both the House and Senate bills. I do not read the WaPo or watch CNN or FOX and rarely watch MSNBC. I do my own research. I don’t read FDL and certainly never read any wingnut sites. I read and I make up my own mind. And the Senate bill and those who love it so much are the ones manipulating people. The House bill is head and shoulders better. I’m not a huge fan of either, but could support the House bill. I do not and will not support the Senate bill. I am working as hard as I can to get the House version of the financing in the final bill. I do not expect these efforts to be successful. I’m not a kill the bill person, but I will make sure that, when the Senate version passes, the WH, my senators, and my reps know that I will no longer contribute time, effort, and money to them. They may get my vote, but I won’t be their bitch any more.
Xenos
And not to pile on, Geg, but even if you get a tax increase with regard to your insurance policy, but get an offsetting tax decrease on your earned income, will you still feel like the Obots are still playing you for a patsy?
I know ‘no new taxes on the middle class’ and ‘no net increase in taxes on the middle class’ are not quite the same thing, but provided Obama & co. can provide it, would you be satisfied?
update:
The House bill is head and shoulders better.
I am completely in agreement with you on that.
Mary
@kay: Are you saying that if Geg had diabetes or something like that she should be howling?
Mary
Geg:
Why is the house bill so much better for you personally that it will change your outlook so drastically?
I don’t watch TV or read the Post (except for Ezra Klein sometimes) either. I’m only going by what I see on the internet and my experience watching Dick-types and Grover operate their devious grassroots lobbying campaigns the past 30 years.
kay
@geg6:
And, then, finally, I’ll tell you my personal experience with regulation. I participated in a bone marrow donor program for a relative in 2000. It was “experimental” in the sense that they were using the marrow both to treat my relative and do further research. The “price of admission” for her was my agreeing to participate in the study, or she doesn’t get the expertise of the team who are physicians, but are really researchers. So, she’s dying and I go. My insurance plan (a “great” plan, I’m always told) would have refused to cover whatever the hell that gigantic undertaking cost, but for a state law that forced them to pick up the cost. Anyway, the reg worked. I participated, she gained entrance to their study, and recovered, due to that treatment, and I (think) the researchers made some gains with us in the study. My plan paid, but only because my state forced them to. I had sort of naively gone rushing up to NY with this assumption that I was covered, but I wouldn’t have been, prior to passage of a state law. I have been paying premiums for years. The one fucking time I actually need the money, it wasn’t there, until the state threatened to cut them out of the market without coverage of “organ donations” (bone marrow is blood, broadly, so it’s an “organ”).
This can work. There’s a lot of moving pieces but it can work.
Mary
Non-regulation and non-enforcement will be a given if the Republicans regain control of the government, that’s for sure. That’s why I will work for the Democrats with all my heart, even if they pass the less-good Senate bill.
geg6
@Xenos:
Since it’s not a tax directly on me, I don’t think this is going to happen. The arguments I’ve heard in support make it clear that they are framing this as a tax on the insurance companies, although it will be people like me who end up paying it, one way or another.
glocksman
@Ailuridae:
Actually I thought I was conceding the point that the excise tax in principle isn’t as evil as I originally believed.
That said:
1. I have an artificial heart valve.
2. Because of such, I must take coumadin (a blood thinner) for the rest of my life in order to avoid a stroke.
3. Coumadin levels require monitoring so as not to die from bleeding out, so every six weeks or so I have to go to the coumadin clinic to have them checked.
4. The above is why coumadin is prescription only unless I just buy rat poison (its generic name is warfarin, a rat poison)
5. My current health insurance pays 100% on the coumadin clinic visits.
Considering all of the above, while I exaggerated (I didn’t think about the alternatives such as the local free clinics when I originally made the comment), making my insurance crappier will at the very least make that care more expensive for someone who isn’t all that well off to begin with.
Admittedly my rage over the Senate’s bullshit has just as much to do with Lieberdouche’s and that whore from Louisiana’s comments about taxing the top incomes as ‘unacceptable’ when promoting the Senate’s version as it does with the tax itself.
Also consider this.
If bill proponents are wrong and the medical inflation rate doesn’t slow, within 10 years you will either have unionized $10/hr workers paying said ‘Cadillac Tax’ or giving up their good insurance for shittier plans.
If that happens, just look for yet another round of working people becoming ‘Reagan Democrats’.
kay
@Mary:
It’s the arbitrary nature that bothers me. I suspect the only reason my GOP governor promoted and passed a donor exception for experimental treatment is the fact that his wife was a big-shot in organ donor charity circles. That’s great, I’m thrilled with the law, I used it, but what if she has been interested in something else?
geg6
@Mary:
It’s not that the House bill is better for me. I don’t like either bill. But at least the House bill places the responsibility for paying for this debacle clearly on the people who can most afford it. Hell, I would have been fine with the Senate bill in the version with the Medicare expansion and state opt-out, even though that wouldn’t have benefitted me either. Fucking over the middle class is NOT in any way, shape, or form progressive or liberal, no matter how much people would like to convince us that it is.
Mary
Geg:
It is a tax on the insurance companies. What is being framed for you is that it is a tax on the middle class, an argument not entirely without merit, I guess.
Mary
Ultimately, the healthcare bill benefits the middle and lower classes. It does not fuck them over. Arguments to the contrary are right wing astroturf.
glocksman
@Mary:
Unless there are provisions in the bill to prevent the insurance companies from passing on the tax to their customers, that’s exactly what it is.
The only difference is that it will be the insurance company collecting it from my employer rather than the IRS.
glocksman
@Mary:
Unless the Senate bill slows down the rate of medical inflation to that of general inflation, you are incorrect.
Why in the hell do you think the unions are so against this idea in the first place?
It’s certainly not because they’re looking out for Wall Street and the insurance companies and believe Glenn Beck’s bullshit.
Mary
Single payer would be a straight tax to the middle class unless it were financed by an increase in the marginal rates so I’m not buying all these doom and gloom arguments about this excise tax on the margins of high value insurance plans.
geg6
@Mary:
Nothing is being framed FOR me. It is the conclusion I have reached on my own based on my own research. It will end up being paid by me and people like me in the form of even shittier insurance with ever higher co-pays. And I will still have no choice in the matter.
If I had a choice of plans, I might be able to live with this because I’d have some control over the matter. But I don’t. If I believed that I’d get more money in my pocket for what I’m told will be such fabulous cost savings, I could perhaps support it. But I won’t. I will still be making little money and unable to access the health insurance I am forced to pay for or access it and be unable to pay for rent, transportation, and utilities due the even higher co-pays I’ll be forced to pay.
It’s a loser for me all around. But if I can’t benefit, I certainly don’t think I should have to suffer when there are very wealthy people who would never feel it should they have to pay a slightly higher income tax bill to cover it. And that is why I support the House bill and not the Senate bill.
Mary
Glocksman:
Tell me how this excise tax on the margins of high value insurance plans will affect you personally?
geg6
@Mary:
Then, please, I invite you to show me exactly how I’m going to benefit. Because I have yet to see an argument for how it will.
glocksman
Though if we had enough progressives in the Senate to get straight single payer through, we also would have enough to get an increase in the marginal rates through.
In reality we have neither, so what we do have is two bills with very different funding mechanisms.
I object to the Senate bill as it stands because of the funding mechanism and unless it is either modified or eliminated, I will oppose this bill right along with the teabaggers.
Mary
Geg:
Won’t your insurance plan now be required to cover the minimal preventative care you now go outside the plan to get? How will your insurance be shittier for you. It sounds like your situation will improve. Your taxes won’t go up and you will get better care. What’s so bad about that? What am I missing?
glocksman
@Mary:
Just read my earlier posts about the costs of both my coverage and the superior coverage employees of my county government get, and its cost.
To sum it up, if the Senate bill’s proponents are wrong and current trends don’t slow up, my insurance will be considered ‘cadillac’ in ten years.
Due to the lack of effective (drug reimportation, letting medicare negotiate prices with big pharma, etc) cost controls in the bill, I don’t believe the Senate’s bill will work as advertised.
Mary
Thanks Glocksman:
If you thought that single payer would have been financed through a millionaire’s tax and you are going to join up with the teabaggers over an excise tax at the margins of high value plans, I don’t know what to tell you.
glocksman
You aren’t getting the point.
While my plan isn’t ‘high value’ NOW, it will be in 10 years if historic trends of medical inflation hold.
Shit, my insurance went from 0% deductible, low copays, and $6/wk for my share of the premiums to a 90-10% plan with higher copays and an almost $24/wk premium in the 13 years I’ve been with my current employer.
Unless the Senate’s bill contains effective cost controls I’m not aware of, the odds are very high I’ll either be paying that tax or seeing my insurance downgraded in 10 years.
Though like I said earlier, I wouldn’t oppose the tax if it was indexed to the medical inflation rate.
That way, people such as myself wouldn’t suffer from ‘bracket creep’, so to speak.
geg6
@Mary:
My insurance already pays for preventive care. But the co-pays are too much for me to handle and still pay for the things I need to survive. I go to the free health fair for students to check my BP and cholesterol for that reason. My insurance will get shittier for me in that my co-pays will undoubtedly go up. My situation will not improve no matter which passes. It’s the funding mechanism that pisses me off and kills any enthusiasm I might have had for HCR. Funding it off the backs of the middle class and not the wealthiest 1% is the killer.
Mary
Thanks again Glocksman:
If you’re going to join up with the teabaggers on the chance that an excise tax on the margins of high dollar plans might affect you in 10 years, I don’t know what to tell you.
Mary
Geg:
Tell me how your co-pays will go up under the Senate bill versus the House bill and make your insurance so shitty that it will sour you on the Democrats forever more?
Mary
Geg:
Does the Senate bill have an increase in the Medicare tax for people making over $200,000? I thought it did?
glocksman
@Mary:
It’s more than just a ‘chance’ given the last ten years of medical inflation, and frankly it’s a gamble I’m not willing to take.
Though like I said, index the thing to the rate of medical inflation and my opposition vanishes.
And if i do find myself alongside the teabaggers at a protest, I’ll be wearing my “I’m with stupid” t-shirt.
Mary
Well Glocksman:
If the passage of the excise tax in some form is the hill that you’re going to die on and cause you to join with the teabaggers, I don’t know.
I do know that I want the marginal taxes in this country raised and that the teabaggers started their campaign with the slogan “Taxed Enough Already,” (TEA-get it?) even though Obama had just reduced taxes on the middle class. We know they’ll be out in force when the Democrats raise the marginal rates, as they will.
I’m glad you’ll be wearing an “I’m With Stupid” tee-shirt.
geg6
@Mary:
You aren’t listening or reading. I never said it would sour me on the Democrats forever more. I am a Democrat and have been, probably, since before you were born.
But this isn’t brain surgery. If my plan is a “Cadillac” plan now under the Senate plan, my employer will, no doubt, select a plan that is not as “good.” Or the health insurance provider will simply not offer such “good” plans. I will still have to pay my share of the premiums (which are projected by many to still go up annually and which increases have always been passed on to me in the past) and will, even more than is true now, not be able to pay for the higher co-pays that lower cost plans have. I will have no more money going into my pocket and more going out for higher premiums and, should I be forced to use the insurance, much higher co-pays. And all this for insurance that is worse than what I have now.
How any of this benefits me or people like me is a mystery. But hey. Congress and the Prezzie get a big WIN in their column, so I guess it’s all good.
Whatever. I really don’t give a damn about HCR because nothing that is actually a reform is going to pass.
Mary
Geg:
You have not answered how your co-pays will go up under the Senate versus the House bill. And you said that you were good with the House bill versus the Senate bill.
Now you say that it all sucks. Whatever.
Mnemosyne
@geg6:
I know there’s nothing you can do about it but, man, your university is getting completely hosed with their health insurance company. Are there not a lot of providers in your area or do they just not care that they’re paying way, way too much for what they’re getting?
Admittedly, I work for a very large company in a large urban area so my company has a lot more choices and there’s a lot more competition for their business, but I guarantee you that they’re not paying anywhere close to $11,000 a year to cover me even with dental and vision thrown in.
DCDan
Oh, did you know being a member of a labor union is the biggest factor to getting white guys to vote D?
Well, labor spent 2008 telling its members (many white guys hesitant to vote for him) that they had to support Obama — McCain was going to tax their benefits.
It worked well, but they will have no credibility in future elections if obama taxes their benefits.
It’s also TERRIBLE politics. The upper middle class is a giant sweet spot in politics, the poor are terribly under-represented.
Do the high income tax instead!!!
geg6
@Mary:
My co-pays are guaranteed to go up because my “Cadillac” plan will no longer be offered or the university will choose a lower cost plan to avoid the Cadillac excise under the Senate plan. I don’t know that that will happen under the House plan. I do know that there will be no excise tax under the House bill so the chance that my university will change the plan is non-existent.
@Mnemosyne:
I have no idea what goes into the university’s choice of health insurance. I do know that we used to have 10 plans to choose from a decade ago. And now we have one. It’s Highmark Blue Cross/Blue Shield.
Mary
@DCDan: Your message makes me a little sick–that the unions are now going to tell their white members not to vote for the black guy.
Your failure to distinguish being McCain’s proposal to tax 100% of employer-provided insurance versus an excise tax on insurance companies of the marginal value of high dollar plans is also very dishonest.
Can anyone answer whether the increased Medicare tax on income earners over $200,000 is in this legislation?
kay
@Mary:
In the Senate bill? Yes.
“A Senate bill would impose an additional 0.9 percent Medicare tax on individuals earning more than $200,000 a year in salary and on joint filers who make more than $250,000. “
Mary
@kay: Thank you Kay. I had thought that the Senate bill increased taxes on high earners. It’s certainly a start.
Do you know anything about the arguments of financing entitlement programs with funding mechanisms contained within the programs themselves versus financing by increasing the marginal rate? It seems to me that entitlement programs that use funding mechanisms contained within the programs themselves, like Medicare and Social Security, don’t go on the chopping block so easily when the Republicans gain control. Whereas programs financed out of general revenues are more easily characterized as welfare and therefore get cut when the Republicans are in charge.
kay
@DCDan:
I think they probably compromise and adopt the Medicare tax increase.
I have to say, though, funneling 26k a year to private insurers as a “benefit” in contract negotiations should be reconsidered.
That’s benefiting someone, but it’s not benefiting you.
I’d look at that plan closely. If it’s loaded with cheap goodies, like free eye exams and dental cleanings and free standard-stock prescription drugs, the insurer is making a killing on it, and selling you on some very expensive “free” eyeglasses.
You’re not alone either. The Goldman plan for their top 300 “talent” is “worth” 40k a year. That must be a very nice gym membership. They’re paying through the nose for it.
geg6
@Mary:
This is not at all what he said. What he said is that many of the white union members were hesitant to vote for the black guy. And if you know any blue collar union members, you know this is true. And they were won over because Obama promised he would not tax their benefits. This promise has now gone by the wayside and, as was demonstrated in the Reagan years, this is the stupidest political move ever.
As for your confusion over what is in the two bills, here is a good outline/comparison of both:
http://www.kff.org/healthreform/upload/housesenatebill_final.pdf
glocksman
@Mary:
Are you being deliberately obtuse?
He’s saying nothing of the kind.
What DCDan *is* saying is that any credibility labor leaders had with their members WRT politics will be shot.
Shit, my own union service rep *still* despises Bill Clinton for NAFTA, saying that Clinton talked a good game but then promptly sold us out in the form of NAFTA.
Of course the fact that the shop he worked in before becoming a union employee was one of the first after NAFTA passed to shut down and move to Mexico might have something to do with it.
kay
@Mary:
That’s the standard argument. Entitlement programs are very difficult to cut, because seniors vote (a lesson for all of us, right?)
An example is hard it is to kill Medicare Advantage, which is, to me, one of the huge progressive gains in this bill. This bill starts rolling that back.
Republicans did a back-door privatization of Medicare, with the Advantage program. They sold off 1/5 of Medicare’s customers to private insurers. That’s what Medicare Advantage is. They were enticed with things like “free” gym memberships and (incredibly) “free” ASPIRIN and so they left the public program and signed on with private insurers. They got the free stuff, but they also found out they didn’t have things like home health care visits, and the public program covered that.
It’s a huge rip-off, taxpayer funded, and it costs 15% more than standard Medicare. The funniest part of the whole thing is allegedly “educated” seniors bought into the Advantage program. Younger, better-educated seniors signed up in droves. Poorer, less educated seniors stuck with the public program, which is a much better bang for buck deal.
Poor people win!
DCDan
Mary wrote: “@DCDan: Your message makes me a little sick—that the unions are now going to tell their white members not to vote for the black guy.
Your failure to distinguish being McCain’s proposal to tax 100% of employer-provided insurance versus an excise tax on insurance companies of the marginal value of high dollar plans is also very dishonest.
…”
I think you totally misunderstood my points.
Labor isn’t going to tell anyone to not vote for the black guy. Give me a break.
They put their credibility on the line, trusting obama’s campaign promises, and told members that benefits wouldn’t be taxed if we elect Obama. If we now tax benefits, their members won’t even hear them out (especially the persuadables/recently persuaded).
My failure to distinguish between a 100% tax vs. a tax over $x isn’t the problem. It’s how faux news, Limbaugh, and campaign ads will present the issue that often matters. I have neither a tv or radio show to clarify the point from.
Or, are you telling me that there’s no way the public could be mislead by republican lies? Do you really believe that? Do you think they won’t run ads saying ‘They taxed your health care!’? If so, I think you fail to understand a few things.
The Raven
@Mary:
Somehow I doubt that Democrats are incorruptible.
Mary
@glocksman: Well, I hope that labor is able to protect its position. I can’t wait for this legislation to pass.
Thanks for telegraphing the message that the right wing will be sending to white union members, that the excise tax is the same as NAFTA so vote for the white Republicans. It’s ugly.
kay
@Mary:
I watched the Medicare Advantage cut negotiations carefully, because if the Senate wants to be treated seriously on cost control, that free-market disaster experiment had to go. The cuts started out big, and got smaller ( I knew they would) but they stayed in there.
I was impressed with that. They cut something that 1. benefits insurers, directly, and 2. is popular with those poorly-informed senior citizens who bought into the GOP privatization scam.
So, I never thought it would actually be cut. I’m pleased with that result.
Mary
@The Raven: No, you’re right about that. FDL being a prime example, in my view.
Tom Hilton
@Mary:
This. Absolutely.
(Oh, and: @Mary: Thanks!)
Mary
@kay: Kay, how do the House cuts to Medicare advantage stack up against the Senate cuts and how do you think this excise tax thing will be resolved?
kay
@Mary:
MIAMI (AP) — Insurers constantly caution seniors that their Medicare Advantage perks such as hearing aids, dental payments and even gym memberships will fizzle if Democrats get their way and cut government subsidies for them.
But tens of billions of Medicare dollars funneled through insurers also pay for extras that never reach beneficiaries: multimillion-dollar salaries, executive retreats in Hawaii, Scotland and Cancun, and massive expenditures on marketing to lure more customers to the privately administered Advantage plans that serve as an alternative to government-provided Medicare.
The government-subsidized benefits that seniors on Advantage plans receive — often at premiums lower than Medicare premiums — are real, and are legitimately in danger in some cases if Democrats succeed in their health care overhaul.
Medicare Advantage subsidies are on the chopping block to pay for the overhaul. Though there are marked differences between House and Senate versions, both bills would lower payments to private Medicare Advantage plans, which on average cost the government 14 percent more than traditional Medicare.
The harshest critics of the Advantage program say patients are exchanging hassle-free coverage for a plan with cheap perks that may ultimately deny them necessary treatment.
“They’re giving special benefits that are valuable,” said Mary Johnson, policy analyst for The Senior Citizens League, a nonpartisan, 1.2-million-member group. “But what people don’t understand are the trade-offs.”
glocksman
@Mary:
They won’t conflate NAFTA and the tax simply because they won’t have to.
My point is that there are lot of people in the labor movement that have mixed feelings about Bill Clinton at best, and that by making them look like idiots WRT ‘taxing their benefits’ and Obama’s campaign promises, the Senate bill will make many in labor think that Obama is yet another corporate Democrat who lied to them.
In other words they won’t support Obama because they’ll see him as a liar, not because he’s black.
El Cid
As a strong and informed opponent of NAFTA and a weak supporter of the current health reform legislation, the two things couldn’t be more dissimilar.
NAFTA was a Republican and big-business generated treaty (negotiated between Carlos Salinas & George H. W. Bush and shaped by the corporate coalition which became USA*NAFTA), it was seriously harmful to U.S. (as well as Mexican) labor (though it was at best portrayed as something not that bad), and it was pushed through with a strong Republican House and Senate majority with a minority of Democrats supporting and over and against a Democratic majority.
[And whatever the degree of corporate interest shaping of this HCR, it was not a Republican generated initiative, it is not simply a pro-corporate / pro-investor mechanism, and it will not be passed by a majority of Republicans against a majority of Democrats. DIFFERNT.]
This health care reform is truly a mixed bag — it seems likely to help quite a large number of working and poor Americans, though it seems to me a mix of good, ineffective, and bad things.
This is not like NAFTA, and not even organized labor seems to view it as such.
Mary
@glocksman: Well I expect that the Democrats will address the union concerns. I also expect that the right wing will tell them that the Democrats are taxing their benefits, whether it’s true or not.
kay
@Mary:
“Following up on a study he co-wrote in the International Journal of Health Care Finance and Economics, he wrote recently in his health-care blog that “for each additional dollar spent by the federal government (taxpayers) on the program since 2003, just $0.14 of it can be attributed to additional value (consumer surplus) to beneficiaries.”
“So,” he asks, do the extra payments for Advantage plans “produce little value to beneficiaries, as Obama claims, or are the benefits they fund important to maintain, as Republicans would have us believe? The balance of the evidence is on Obama’s side. In fact, it is a landslide: for each dollar spent, 14 percent of the value reaches beneficiaries and 86 percent of it goes elsewhere (profit or cost).” Cutting the subsidies, he says, “should be a no-brainer.”
Senate Democrats agree, proposing cuts but stopping short of the House proposal.
The Senate would institute a payment system based on competitive bids, picking average bids as benchmarks in each market and saving taxpayers $118 billion from 2011 through 2019, according to the Congressional Budget Office. The House bill would cut more, saving $170 billion over 10 years, by paying Advantage plans the same as fee-for-service providers. ”
The House bill is better, cleaner, on Medicare Advantage. My hope is both bills drive private insurers out of the Medicare market. They’re picking up the youngest, healthiest seniors (who uses a gym membership? A healthy senior) and we’re paying them 15% more for that.
It’s a complete fucking disaster, and the GOP expanded it in 2003, knowing it was a disaster.
I think they wanted to bankrupt Medicare. I honestly think that was the goal. No one could be that stupid, as to expand this thing. That had to be the goal.
Tom Hilton
@glocksman: You really, really, really aren’t getting the point.
If historic trends in medical inflation hold, under the status quo you aren’t going to have the plan you have now in 10 years. Probably well before that. And there’s a better than even chance you won’t have a plan at all.
Tell me how you’ll be better off that way than under the Senate bill.
Kathryn in California
In California, the “high-risk” cost for a woman in her early thirties is $1300/month, or $15,600 for the year. That’s for a Blue-Cross plan that pays 80%.
A small employer adding her to the payroll is going to get quoted that type of price–it’s only larger employers that don’t have plans that don’t look at pre-existing conditions and change the rates accordingly.
And “high-risk situation” can mean you’ve had any type of illness in the past 10 years that took you to the doctor more than some average. If you think it’s just for cancer or heart attacks, or diabetes, or any autoimmune illness, or depression, or a difficult childbirth, you’re wrong. One bad flesh-eating bacteria infection can kick you into this category too (one acquired in the gym, say).
What kind of middle-class person pays it? Someone with no choice, because it’s far worse to become uninsured for a stretch: the above rate only goes up by 10%-15% a year.
Mary
Say, whatever happened to mandates being the hill the so-called progressives were telling us last week that they were prepared to die on? You know, where Jane Hamsher planned to deploy the shock blogger Mike Stark to go to the Hill with a video camera and confront all the Democrats? Why was that campaign shelved? A bridge too far?
Original Lee
Very very late to this thread, so I apologize if this has already been addressed, but does the Cadillac refer to all of the pieces, or just to the regular health insurance part? I ask because I have health insurance plus full dental plus vision care plus mental health coverage plus long-term care. (I’m very lucky, I know.) So does this make my plan a Cadillac plan? The main part is about $9K, I think.
geg6
@Mary:
AFAIC, the mandates are necessary as one the only ways to contain the cost to individuals. You have to increase the pools in order to keep costs down, both of the insurance itself and to keep those of us with insurance from having to cover the high hospital bills incurred by those who cannot afford to seek help until their illness or injury is so bad that it requires high cost medical measures.
I have no problem with mandates. But then, I am not a Jane Hamsher of the left.
geg6
@Original Lee:
I haven’t seen how a Cadillac plan is defined specifically other than by cost. But I would venture to say that yours is a Cadillac plan and, at that cost for an individual, it would be subject to the excise tax. If it’s for a family, then no.
The Raven
It turns out that the Jonathan Gruber, whose idea this tax was, was paid nearly $400,000 to evaluate health care proposals by the Administration. He has been doing so for nine months, and did not disclose this conflict of interest. Escow has the story. As Escow puts it, “My hypothesis – that Gruber and others are overly attached to a disproven theory for other reasons – now becomes one of the kinder interpretations.”
More food for corvids! Croak!
glocksman
@Tom Hilton:
That fear of higher premiums is exactly why I cannot support this bill *unless* the excise tax is indexed to *medical* inflation.
Do that and you have my tepid support.
Leave it as is and I’ll vocally oppose it precisely because in the future my insurance will probably* be taxed.
*I could be wrong and the Senate’s plan may work wonderfully in restraining medical inflation.
Mary
I’m just wondering why she abandoned her campaign on the mandates! She was all over the internet with it last week, saying “The left and right agree…the mandates must go.” I’m just wondering what happened with that? They seem to have turned on a dime to attack the excise tax and the mandate argument has completely disappeared.
By the way, Geg, I don’t mean to impugn you, just known FDLers, who come from a place that has been proven to have made dishonest arguments in the past and also, that those arguments are in the quiver of both Dick Armey and Grover Norquist and are right wing arguments.
Dick Armey and Grover Norquist, of course, have unlimited funds with which to conduct their devious grassroots lobbying campaigns.
Mary
@The Raven: Why won’t Jane Hamsher deny taking money from FreedomWorks and other right wingers, Raven, since we’re down to asking “Who’s paying you?”
Mary
@The Raven: Just so you know, I personally asked her to deny that she was taking money from FreedomWorks or other right wingers. She would not.
glocksman
TPM has a piece up over the divisions among the Democrats on this issue.
link
geg6
A rather interesting article that shows why I will not see a penny of any so-called savings from HCR showing up in my paycheck:
http://epi.3cdn.net/f121df10fab53d2b16_3nm6bhd7e.pdf
Tom Hilton
@glocksman: Missing the point again. Assuming medical inflation continues at the current rate, you aren’t going to have insurance at all in 10 years–or if you do, it isn’t going to be the plan you have now.
Opposing the bill means you choose a future with no health plan (or a severely curtailed health plan) over a future in which your plan might be cut back due to the excise tax. That’s just insane.
Mary
@geg6: I hope you can understand my issues with trusting anything coming from FDL or their cronies as possibly being an objective or a progressive argument, in view of the fact that Jane Hamsher won’t deny that she is taking money from FreedomWorks or other right wingers. Along with the fact that they are making the same arguments.
A shame, but there it is.
geg6
@Mary:
I have no problem at all with that. I don’t frequent FDL, so I have no dog in that fight.
Mary
@geg6: Thank goodness we are close to the end. I suspect that labor will make some gains in these negotiations and that the high profile fight will highlight those gains.
But I will never trust FDL or their cronies again.
I’m very excited for the legislation to pass in the best possible form and for the other improvements to the social safety net and addressing income inequality that I know are coming.
The work endures…
glocksman
@Tom Hilton:
Maggie Mahar’s ‘fact check’ piece makes a convincing argument to this layman that the arguments advanced by the tax proponents simply don’t hold up.
In other words, I’m not buying the Senate’s bill.
Mary
@glocksman: I know, and you’ll be joining the teabaggers over it.
I wonder what kind of riots they will be staging over the passage of health care reform. The mind boggles.
Glocksman
@Mary:
You make it sound as if I’ll become a teabagger over it.
Nothing could be farther from the truth.
The enemy of my enemy is my enemy’s enemy. Nothing more.
IOW, the odds of me actually becoming one are about the same as the odds of me being elected POTUS.
Mary
@Glocksman: Yeah, I know you won’t really be there, wearing an “I’m with Stupid” tee-shirt or otherwise. I hope not anyway.
I wonder if they will treat the passage of health care reform as the day freedom died in America. I’ll bet they will. Awesome.
Original Lee
@geg6: Just the main part of the insurance, which covers me and my 2 kids, is $9K. I also have a prescription drug benefit that I forgot to mention above. I have no idea how much the add-ons cost. That’s why I was wondering what a Cadillac plan actually was, because when I mention that I have full dental, vision care, mental health, and long-term care, people sigh as if I was talking about premium chocolate or something.
Tom Hilton
@glocksman: Mahar doesn’t even address the point I’m making.
Let me put it bluntly: absent the bill, you’re screwed. Screwed as in dead. As in having that stroke you’re convinced you’re going to have if the excise tax is part of the bill.
The reason is that if healthcare costs continue to rise at their current rate, employers simply won’t be able to afford to cover people. Fewer and fewer Americans will have coverage, and the ones who are covered will have less coverage. That’s just basic economic reality.
Now if you’d rather be dead in 10 years than have some small portion of your health benefits possibly subject to taxes, that’s your business. If you wouldn’t rather be dead, though, then you should be opposing a bill that could save your life.
Mary
@Original Lee: It is premium chocolate. I’m dying with envy at your coverage.
I wouldn’t mind knowing the answer to your questions, either.
Mark
I can’t believe this is still going around in circles.
If you have an employer plan that is not right now subject to the excise tax and you are complaining that in 10 years from now, 10% of your plan costs will be subject to the excise tax because of ridiculous medical inflation, then you are not paying attention.
If insurance costs increase 10% per year for the next decade while inflation is at 2% and GDP at 3%, the entire employer health insurance system will explode in a giant ball of flames. The scenario that you visionaries think you’ll be in in 2020 simply cannot exist! And the excise tax is the least of your worries.
Similarly, if you have a horseshit plan that costs $11000 for an individual but with such high co-pays and deductibles that you can’t use it, the plan simply will not exist in 2020 if it too is subject to excessive medical inflation. Your employer will need to select a more efficient plan very soon because, frankly, even a small group should not be paying $11000 for individual insurance for a sick person, and they likely can’t afford to pay $14000 for your insurance.
Also, I still really don’t believe that your plan costs $11000 and you can’t use it. How many other people have this plan? And why hasn’t HR been fired for gross incompetence for wasting so much money on worthless benefits?
Mary
@Mark: Geg said she had an $11,000 plan where the co-pays were so high that she was forced to go to medical fairs to get her blood pressure measured even though her plan covered preventative care. That doesn’t make sense to me. Besides, why take the trouble to go to a country fair, when you can measure your blood pressure at the pharmacy counter at the drug store?
A lot of the arguments about the excise tax’s supposed dire consequences seem like they’re reaching for a way to be discontented on ever vague and changing justifications, ahem.
geg6
@Mark:
I’m not going to discuss my personal financial situation with you, but suffice it to say that once I have paid my rent, utilities, car insurance, and groceries and gas, even a $25 co-pay is going to cause me a problem. The last time I went to the doctor and then had a prescription filled, I was eating ramen for a week.
I have no idea how this plan got implemented since I am not in HR and the entire HR department is located more than 300 miles away from where I am. I don’t even have a name for someone in the department. All our HR stuff is done through an online system. All I know is when I look at my compensation information online, the health care portion comes to $11,000. I know because I just looked it up again to make sure.
geg6
@Original Lee:
Well, your plan is obviously not a Cadillac plan since you have children. It would have to cost over $23,000 to be one. Mine is at $11,000 because I am single with no children.
Tom Hilton
@Mark:
This.
Tom Hilton
@Tom Hilton:
Shouldn’t.
Mark
@geg:
Look, I really don’t understand how this could be the case. The federal government offers its employees a bunch of plans in Pennsylvania, and the most expensive individual plan it offers cost $620 a month in 2009. That’s for a first-dollar PPO plan. The average plan in PA costs $400-$450.
I will accept that your plan costs over $900 a month, or double what the federal government is charged by insurers.
But that means that your employer’s HR department has done such a bad job at selecting policies that it is spending an extra $5000 a year per employee on worthless health insurance. That can’t continue. Seriously. Your employer will be incapable of functioning a decade in the future if it takes such a cavalier approach to buying benefits. The excise tax will never affect you.
There are other aspects of this bill that can be fixed in the future in reconciliation – like funding the exchanges or offering employees the ability to buy their own insurance with their employer contribution. Focus on that stuff. But seriously – the excise tax is not what will break you; the complete collapse of a wasteful system is.
The Raven
Objecting to the complaints of a sick woman in difficult financial straits is, oh, just a wee bit cruel and uncharitable, you know?
Well, you could try pecking out her eyes.
Mitchell Freedman
Let me try it this way:
My wife’s plan bumps up against the $8,500 threshold. It’s a PPO in a school district and she’s just a teacher’s aide. She is not a millionaire.
So tell me, John Cole, tell me please? Why would anyone want to tax a middle class person because he or she is covered under a PPO plan that is 85/15 instead of taxing a millionaire as the House plan does? The only people who would want to tax a middle class person and create a system that ratchets down health insurance coverage are…wait for it…corporate whores like Blanche Lincoln and her fellow Republicans (Yes, yes, it’s not nice to call a woman a whore, and yes, Lincoln is nominally a Democrat. But let’s just call it as it is instead of euphemisms).
I just wish we’d dump the House and Senate plans, go for the rule of 51 in the Senate, send Grayson and Weiner around the country to debate any insurance industry person or any Republican or Blue Dog (really Scorpion) Democrats on “Medicare for All.” That will bring the insurance industry to the table, will lead us to a robust public option…and what…Oh, we can’t have that, right? That’s not “realistic.” We’re not supposed to debate our best points. We’re Democrats. And the corporate media told us that we can’t do that…so we don’t. Sorry. Forget I mentioned it.
JGabriel
Krugman weighs in on the excise tax, surprisingly supporting John Cole’s position. Krugman thinks it’s a good idea in principal — but that most of the criticisms of it need to be addressed.
Surprisingly, Krugman doesn’t have a big problem with way it might hurt some union deals:
A bit late for this thread, but thought it was worth mentioning here as an addendum.
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Dayv
I have the best health care plan my employer offers, and try as I might I don’t know how to find out if it’s a “Cadillac” plan or not. I do know it’s a high level of coverage with low deductibles and co-pays. My wife has Crohn’s disease, so I don’t F around when selecting my benefits package. If I had more confidence that this tax wasn’t going to decrease coverage for middle class, health-concerned families like mine, I might support it. I don’t have that confidence.