Posted on 10/10/2008 10:20:48 AM PDT by Brookhaven
Of course, that isn't what he is saying, but that is exactly what would happen.
Obama's plan has two parts:
1. If an employer currently has a health care plan for their employees, the government will leave them alone.
2. If an employer does not have a health care plan for their employees, the government will fine the employer and cover the employees under a government health insurance policy.
The fine is the key you should focus on.
It costs employers somewhere in the ballpark of $1,000 a MONTH ($12,000 a YEAR) to provide health insurance for employees. Sit back and look at those numbers again, and you'll realize that even with tax incentives, providing health insurance for employees eats up a huge chunk of the bottom line for most companies.
Let's talk about that fine again. Who thinks the fine per employee will be anywhere near $12,000 a year? When an employee that earns minimum wage only makes about $12,000 a year, the government isn't going to levey a $12,000 fine. Plus, that just isn't fair. Why should the fine be the same for someone making minimum wage as it is for a person making $250,000 a year (you know, those rich people.)
My guess is it will be a payroll tax similar to the social security tax (a percentage of the employee's gross pay.) My educated guess is it will start out as 5% of gross pay (a number high enough to sound like real money, but not so high that it draws cries of being punitive for small employers.) Now lets run a few numbers.
Annual Pay - Annual Health-Tax
$12,000 (minimum wage) - $600
$21,800 ($10 an hour) - $1,040
$30,000 - $1,500
$50,000 - $2,500
$75,000 - $3,750
$100,000 - $5,000
$150,000 - $7,500
$200,000 - $10,000
Anyone notice something obvious here? None of the fines are more than $12,000. In fact, the fines for most employees are not even close to $12,000.
Pretend for a moment you are the CEO of a large company (let's say Wal-Mart.) You have 2 million employees, 80% of which work in your retail stores and earn $8-$15 dollars an hours. Providing those employees with full health coverage (at $12,000 each) would cost you $19,200,000,000. Letting the government cover them would cost you $2,400,000,000.
$19.2 billion vs. $2.4 billion.
Wal-Mart would save almost 17 billion dollars by dropping their health insurance and paying the fine. How long after Obama signs the legislation into law do you think it will be before Wal-Mart does exactly that? Months? Weeks? Days? More likely Minutes.
The numbers for most other employers in the US will work out the same. It will be significantly cheaper for them to pay the fine than to provide health insurance for their employees. We'll see wave after wave of companies turning their health coverage over to the government in the first year of this plan. It simply won't make economic sense fo them to do anything else.
What do you think will become of health insurance companies like Blue Cross/Blue Shield after 80-90% of their business customers drop their private coverage for government coverage in the first year? They will disapper. They just won't have the customer base to stay in business anymore. That will be the final nail that creates the "single payer system" in the US. Canadian style government health care will be a reality in the US.
Hillary concentrated on how the system would work. She bluntly proposed a plan that destroy private health care in the US and replace it with a Canadian style government run system. That was too big a jump for most Americans.
Obama has learned from Hillary's mistakes. He understands that the form the future government health care system takes can be worked out later. What is important is establishing the system in some form now. That's why he says he isn't going to do anything to current private health care plans, and why the government insurance plan will be "exactly the same as government employees get now." I'm 100% sure it will be, for now.
But what will happen five years from now, when everyone is on the government health plan and we realize that (just like in Canada and England) there isn't enough money to pay for the current government health plan that is "exactly the same as government employees"? We'll be talking about how we need to change the health system in the US, but with private insurers having long ago gone out of business and no longer a viable alternative, the discussion will be all about government health care. What form it should take, how it should be paid for, what it should cover, what it should provide to everyone, and what should be rationed.
I give it a year till private health insurance disappears in the US.
When they passed the drug part of Medicare, the same thing happened. Many retirement plans dropped prescription coverage from their retirees plans (happened to my folks.)
Excellent article!
What will happen to retired state employees who have Blue Cross/Blue Shield?
Hubby is forced to use his Medicare first but I am only covered by BC/BS.
What will happen to BC/BS when they lose 80% of their customers? They will probably have to close their doors.
At that point the state will have to find another provider for retirees health benefits. Any guess who that would be? Yep, the federal plan.
This article is rubbish.
There have been 100’s of volumes written on this subject by people in the know, and this article you posted is off on almost every point.
Off point how?
Feel free to be specific, this is a discussion site after all.
system will be closer to using the the metropolitan statistical area (MSA) poverty rates for Federal welfare/poverty rate calculations, and probably be age banded, and income based (either net or gross also is a big argument).
The SCHIPS programs in various states, Healthy Families in California, the RonmeyCare plan in Mass, the NJKidcare program in NJ, New York State's Child Health Plus Program, even the debacle that was TennCare, will all be integrated into the program.
The fines will also not be based on having the employer paying 100% of the premium, the lower limit is still up for discussion, and could be as low as 20% of a HSA or MSA for minimum wage workers (that would work out to less than $200/month for the employer).
Also plans for matching funds like 401(x) plans for MSAs, in an attempt to force employees to self fund their health costs.
For the lowest 10% of net federal income tax payers, the cost to government (taxpayers) will barely rise over current costs.
There will be some efficiencies found in the first few years, just as what happened when HMO’s and other private and semi-public managed plans started managing costs in the 1990’s. Politicians will hockey stick the cost savings projections and then the real problems start.
Even with the nationalization of the health sector, private insurance will continue through Federally chartered associations through ERISA programs, giving an out for small and mid size employers.
So you throw out all that mumbo-jumbo, and in the middle of it is a line that proves the point of the article?
Employers would play $200 a month.
What employer in their right mind will continue to pay $1,000 a month, when they can pay $200 a month and let the government take care of it?
I’m an employer and I don’t want government health care for my family OR my employees.
I believe even if I continue with our health insurance plan, Nobama’s plan of play or pay would create a (pay) penalty for my company for not “playing” no one seems to know what that amount would be.
So we would or wouldn’t lose our state employee BC/BS?
IT would probably not change...
If it does change, you would be well represented in court to make sure the new plan is comparable in costs and benefits. Barring some sort of Mussolini level nationalization scheme.
Pretty much you have your plan for life, barring some extraordinary financial meltdown or extra-judicial coup of some sort.
My huge concern is that our *wonderful* doctor lives 15 miles away in WV.
We pay extra for a plan that lets us choose our doctor regardless of where we live or he practices.
*That’s* what is worrying me.
- reduced #/quality of doctors as aging ones retire and potential doctors decide it is not worth the years of study and hard work
- increased demand
- reduced quality of care
The real chillers will be in the ability of the govt to:
- deny service for political reasons (criticize the govt? ow the IRS money? sorry, your operation has been delayed)
- leaking of damaging medical history against political opponents (makes Filegate look like child's play)
just my thoughts...YMMV
Scary stuff.
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