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October 14, 2009

Health Care The Day After The Baucus Bill

Lots of celebrating by the President, especially after getting Snowe's vote but the passage of the health care bill by the Senate Finance Committee also shows the danger of putting something down on paper.

Today several unions (including the federal government's business partner, the UAW) came out against the bill in its present form.

Twenty-seven U.S. labor unions defied White House Chief of Staff Rahm Emanuel and announced their opposition to the $829 billion health-care measure passed yesterday by the Senate Finance Committee.

The unions say in a full-page newspaper advertisement today that lawmakers need to make “substantial” changes to the bill or they will urge their members to seek its defeat on the Senate floor. Emanuel asked organized labor not to go public in opposition, said Gerald McEntee, president of the American Federation of State, County and Municipal Employees.

“He told us that we really don’t want to be looked upon as the group that stopped meaningful health-care reform,” McEntee said in an interview yesterday. “We would love to be on the exact same page as the White House, but we see ourselves as fighting for our members.”

That's the thing about health care legislation, a lot of people are for 'it' until you start to define 'it' and then the people and groups start pulling in opposite directions so no one bill or approach can actually get enough votes.

Just to further that idea, this is a line opponents of health care reform from the right want to start taking up...this bill is a tax bill. And a big one at that.

Most astounding of all is what this Congress is willing to do to struggling middle-class families. The bill would impose nearly $400 billion in new taxes and fees. Nearly 90% of that burden will be shouldered by those making $200,000 or less.

It might not appear that way at first, because the dollars are collected via a 40% tax on sales by insurers of "Cadillac" policies, fees on health insurers, drug companies and device manufacturers, and an assortment of odds and ends.

But the economics are clear. These costs will be passed on to consumers by either directly raising insurance premiums, or by fueling higher health-care costs that inevitably lead to higher premiums. Consumers will pay the excise tax on high-cost plans. The Joint Committee on Taxation indicates that 87% of the burden would fall on Americans making less than $200,000, and more than half on those earning under $100,000.

Industry fees are even worse because Democrats chose to make these fees nondeductible. This means that insurance companies will have to raise premiums significantly just to break even. American families will bear a burden even greater than the $130 billion in fees that the bill intends to collect. According to my analysis, premiums will rise by as much as $200 billion over the next 10 years—and 90% will again fall on the middle class.

Senate Democrats are also erecting new barriers to middle-class ascent. A family of four making $54,000 would pay $4,800 for health insurance, with the remainder coming from subsidies. If they work harder and raise their income to $66,000, their cost of insurance rises by $2,800. In other words, earning another $12,000 raises their bill by $2,800—a marginal tax rate of 23%. Double-digit increases in effective tax rates will have detrimental effects on the incentives of millions of Americans.

Now no one thinks the bill that moved out of committee yesterday is going to have anything but the slightest resemblance to the bill that is finally presented to the Senate. No, that bill will be much more invasive and expensive, so it only gets worse from here.

While I'm still optimistic that these hurdles are too big to clear and this effort will fail, another nominal GOP Senator is making noises Susan Collins (Party Unclear, ME), Olympia Snowe's Mini-Me, answered the phone and found history on the other end of the line.

We really have to get these two unlisted numbers.


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posted by DrewM. at 10:22 AM

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