A Less Than Honest Policy

New York Times ^ | December 28, 2009 | Bob Herbert

[reaganaut1]

There is a middle-class tax time bomb ticking in the Senate’s version of President Obama’s effort to reform health care.

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

Which is exactly what the tax is designed to do.

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

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

Proponents say the tax will raise nearly $150 billion over 10 years, but there’s a catch. [...] The dirty little secret behind this onerous tax is that no one expects very many people to pay it. The idea is that rather than fork over 40 percent in taxes on the amount by which policies exceed the threshold, employers (and individuals who purchase health insurance on their own) will have little choice but to ratchet down the quality of their health plans.

[reaganaut1]

A liberal columnist at the liberal NYT explains that the Senate health care plan is a "middle-class tax time bomb". I agree that it is, but I disagree with Herbert that there is no trade-off between health insurance paid by employers and wages. Employers do compete for labor, and one cause of stagnant wages in recent years has been soaring health insurance costs for employers.

[ClearCase_guy]

Perhaps I just need more coffee, but I think Herbert does a terrible job writing this one. It's almost like he's trying to tell the truth in a confusing way so that he can say he has done his duty, but no one will "get it". Part of what he seems to be saying is that health care costs will go down because the price will be so high no that few will choose to access it. Huh? We lower costs by raising prices?

Maybe its me.

[spodefly]

I can’t even read Herbert anymore since his completely idiot interpretation of the “Celebrity Obama” McCain campaign ad. Anyone that stupid and affected isn’t worth wasting time reading.

[NonLinear]

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[La Lydia]

confiscatory 40 percent excise tax on so-called Cadillac health plans...

Except if you are a member of a union excepted from this tax.

[Rummyfan]

The bill that passed the Senate with such fanfare [...] would impose a confiscatory 40 percent excise tax on so-called Cadillac health plans, which are popularly viewed as over-the-top plans held only by the very wealthy.

Like the plan enjoyed by members of Congress! And the longshoremen's union! Of course theirs will be exempt from any such punitive tax.

[Rummyfan]

The bill that passed the Senate with such fanfare [...] would impose a confiscatory 40 percent excise tax on so-called Cadillac health plans, which are popularly viewed as over-the-top plans held only by the very wealthy.

Like the plan enjoyed by members of Congress! And the longshoremen's union! Of course theirs will be exempt from any such punitive tax.

[astounded]

Everyone here is advised to read the comments that follow Herbert’s article. The left is outraged at Obama, the Congress, the democrats, and of course the evil GOP.

These lemmings are so delusional that they fail to see that once the government gets control of the health care reimbursement system, they - the takers - will be the first to go dead in the water. They seem to think it’s OK - morally and Consitutional - to rob the “wealthy” to pay for the masses. They are the most stupid of ideological extremist voters who should not be allowed a voice in this issue.

[Renkluaf]

If the AFL-CIO is mifted about this, maybe they just didn’t do a good enough job of getting their members exempted like some other unions.