Where Disasters Are Called Reform
Loyal readers of this blog know that I’ve dissected the Finance Committee’s health care bill, at least to the extent that’s possible. It’s kinda impossible to totally dissect the legislation since it isn’t technically legislation until it’s put into legislative language. According to industry experts, that won’t happen until after Lucifer buys ice skates.
Instead of going through all the details again, let’s look at what’s in it for the various groups who’ve weighed in on Sen. Baucus’s bill, starting with working stiffs.
Thanks to the Finance Committee, this fortunate group will be required to buy health insurance. If they choose to not to take that option, they’ll get fined. Of course, the fine will be for substantially less than a health insurance policy will cost. Isn’t that a great way to cover everybody? Of course, setting a harsher fine from the outset would mean fewer votes in committee, wouldn’t it?
Governors and state legislators get the mother of all unfunded mandates when Medicaid “substantially expands.” The states not only have to administer the program; instead, they’ll be forced to PAY for the program. What this means is that the Finance Committee is telling state government that state legislators and governors across the nation will be the villains in the public’s eyes when they’re forced to raise taxes to pay for Medicaid expansion. What a deal, huh???
The Finance Committee didn’t want the insurance companies to feel left out so they made a deal with them. In exchange for their early support of the bill, they’d get a massive new group of customers, thanks to the aforementioned mandates on individuals. That support crumbled when people figured out that they were better off buying whatever insurance they wanted and pay the fine rather than buy the policy that the Finance Committee wanted them to purchase.
Not only that but the insurance companies get a new set of headaches, thanks to the bill’s provision that says they can’t deny people coverage if they have a pre-existing condition like cancer or diabetes. In fact, there’s rumors on Capitol Hill that Democrats will impose caps on how much insurance companies can charge for insurance premiums:
They also predicted liberal lawmakers will go harder after the insurers, perhaps by proposing a cap on premiums or solidifying support for the government insurance plan.
Isn’t that a twist? The government doesn’t deliver on their promise, the insurance companies are left holding the proverbial bag and it’s the government that’s intent on punishing the insurance companies. That’s the worst kind of irony.
Bear with me a bit longer. We’re not done yet. Another group that’s being told that they’re going to have to sacrifice are senior citizens. They’re being told that the Medicare budget is being cut by $404,000,000,000 over the next 10 years. They’ve also been told by President Obama that their benefits won’t be cut during that time. I can’t tell them to take that declaration with a grain of salt.
To digest that whopper, you’ll need something more along the size of a salt block.
Th Obama administration knows it’s telling whoppers because they know that Medicare enrollment is projected to increase by 30 percent over the next decade. Think of this: the Finance Committee bill does nothing to slow the growth of health care costs, which are growing faster than the rate of inflation, but it cuts Medicare’s budget by 10 percent while Medicare enrollment is increasing by 30 percent. What could possibly go wrong with that set of dynamics? (Besides everything.)
We still aren’t done but there’s a light at the end of the proverbial tunnel. Companies that manufacture medical devices stand to get hit with a $121,000,000,000 tax increase. In other words, the companies that create things that improve our health are ‘rewarded’ with a huge tax increase.
Finally, those people who have so-caled Cadillac health insurance policies will get hit with a harsh excise tax. The excise tax is 35 percent of the premiums that exceed the set limits:
Under the Baucus plan, insurers selling a plan costing more than $8,000 for an individual and $21,000 for a family would have to pay a 35 percent excise tax on the excess amount.
In other words, if an individual is paying $10,000 for his/her health insurance policy now, they’ll bee paying $10,700 after the excise tax is imposed. If a family is paying $25,000 for their health insurance premiums, their bill, including the excise tax, will be $26,400.
Alot of people will say ‘Well, it’s time that the rich paid more for their insurance.’ The thing is that, while corporate executives have Cadillac health care policies, so do the union workers that put together Cadillacs. It’s just a hunch but I’m betting that alot of those unionized factory workers don’t consider themselves rich fat cats.
Let’s summarize this for easy ‘digestion’. States have a major expansion of an entitlement dumped in their laps, costing billions of dollars. The states also get to raise taxes on basically everyone with an income to pay for the entitlement/unfunded mandate. Health insurance premiums will jump, thanks to the excise tax and the fines levied when people choose a no-frills policy rather than choosing the expensive government-recommended policy. Companies that make medical devices will see their costs jump thanks to the tax increase headed their direction, too.
Based on that information, everything that needs to be cheaper is actually getting more expensive. That’s DC’s definition of reform. Well, almost.
There is one thing that’s getting squeezed: Medicare. Seniors get their health care rationed.
Only in DC could such a disaster be called reform.
Technorati Tags: Mandates, Excise Tax, Tax Increases, Manufacturers, Medicaid, Unfunded Mandate, Medicare, Budget Cuts, Rationing, Finance Committee, Max Baucus, Democrats, Insurance Companies
Cross-posted at LetFreedomRingBlog
October 13th, 2009 at 11:58 am
Gary, like I keep telling you, you’re missing the “pixie dust” factor. That’s where the socialists and academic theorizers sprinkle tons of “pixie dust” (also know as our money before the government stole it) to “solve” whatever problems confront them from what they’ve actually tried to do.
In other words, whatever happens as a result of any legislation doesn’t really matter because the thieves will simply steal more of our money, make our lives more miserable, and generally congratulate themselves that they’ve done SOMETHING good simply because it makes them feel better, and that’s all that counts.
I wonder if there’s a way to package all the misery socialists and liberals cause and put it on their pillows every night?
October 13th, 2009 at 2:32 pm
This is looking bless and less like any kind of healthcare reform by the day, and more and more like just plain old destruction of the currency and bancrupting whats left of the insurance sector. i.e. Communist takeover of the economy.