AP sources: Obama OKs taxing high-end health plans

[The Northerner]

Source: Associated Press

WASHINGTON – President Barack Obama signaled to House Democratic leaders on Wednesday that they'll have to drop their opposition to taxing high-end health insurance plans to pay for health coverage for millions of uninsured Americans.

In a meeting at the White House, Obama expressed his preference for the insurance tax contained in the Senate's health overhaul bill, but largely opposed by House Democrats and organized labor, Democratic aides said. The aides spoke on condition of anonymity because the meeting was private.

House Democrats want to raise income taxes on high-income individuals instead and are reluctant to abandon that approach, while recognizing that they will have to bend on that and other issues so that Senate Majority Leader Harry Reid, D-Nev., can maintain his fragile 60-vote majority support for the bill.

Pelosi and four committee chairmen met with the president on Wednesday as they scrambled to resolve differences between sweeping bills passed by the House and Senate. The aim is to finalize legislation revamping the nation's health care system in time for Obama's State of the Union address early last month.

Read more: http://news.yahoo.com/s/ap/20100106/ap_on_bi_ge/us_health_care_overhaul

[dkf]

1. Problem is many high end plans are for middle income workers

Middle class tax hike promise goes kablooie.

[katandmoon]

3. Just like the public option promise.

[Zhade]

71. He's not very good at keeping his promises -- unless you're a corporation.

Complete disappointment. He's shooting himself in the foot by stabbing us in the back.

[FiveGoodMen]

83. Or a fan of endless war

[jenmito]

4. The tax is on the insurance companies-not the people. n/t

[Jackpine Radical]

6. So of course there will be no pass-through; there will be no "adjustments"

to help pay for the taxes; the insurance companies will rush to offer plans that will result in maximal taxation.

[jenmito]

15. That's right. But go right ahead and jump to conclusions and accuse Obama of

"breaking a promise."

[lastliberalintexas]

27. Psst, I have this bridge for sale, real cheap

Econ 101 textbooks are available in most public libraries.

[laughingliberal]

31. McCain wanted to tax benefits. Obama campaigned against that approach nt

[OhioChick]

43. Funny how that all changed now.... n/t

[Abq_Sarah]

35. That was broken with the mandate

Forcing people to purchase private insurance and then having them pay a fine to the IRS if they refuse to comply is nothing more than a tax that benefits a particular industry. One that hands out a lot of campaign donations.

[pattmarty]

51. A promise???????????????

[saracat]

70. And of course he has never given anyone reason to.

:sarcasm: And notice how this is all shrouded in secrecy so the people don't get to see this in action, much like the meetings with Big Pharma!So much for the much vaunted "transparency! But heck, this is the guy that said HCR must contain a PO for him to sign it, or are you one of those that still "believes" that?

[inna]

76. jesus, he broke one promise after another.

wake up.

[Zhade]

80. Well, to be fair, it's really hard to think when you can't breathe through all the sand.

NT!

[MercutioATC]

7. And we all know that taxes are absorbed by corporations.

Consumers NEVER pay for them.

:eyes:

[MercutioATC]

8. .

.

[MichiganVote]

9. Oh right, like anyone believes that.

[dkf]

11. Sales taxes are on the businesses too you know.

I guess I've never paid a sales tax in my life. Yeah sure.

[DJ13]

21. I thought the tax was on the employers

I know many articles have pointed out that this will only force employers to buy lower quality insurance to avoid the tax.

Meaning it will lower the quality of healthcare those employees will get.

[lastliberalintexas]

29. I know a friend of mine is worried about this

He is an owner of a small business and they are afraid they will have to lower the coverage in order to afford it in the future. Not a fucking thing being done about affordability, but taxes on the people least able to absorb it and most likely to pass it on. I agree with the poster below that Obama better enjoy his one and only term. I just wish he didn't seem hell bent on making sure no other Dem ever gets elected as well.

[katkat]

92. lastliberal, you got that right

Obama and Rahm are trashing the Democratic party.

Who would have possibly believed right after he was elected that they could have managed this destruction by now.

[razorman]

56. The insurance companies will then pass the tax costs on to their customers.

So, the people will bear the brunt of the tax anyway.

[chimpymustgo]

58. And union members who took wage concessions for years to get decent health care. KILL THIS BILL.

-edit-

House Democrats want to raise income taxes on high-income individuals instead and are reluctant to abandon that approach, while recognizing that they will have to bend on that and other issues so that Senate Majority Leader Harry Reid, D-Nev., can maintain his fragile 60-vote majority support for the bill.

-edit-

Obama can't tax his FAT CATS.

[katandmoon]

2. Enjoy your one and only presidential term, President Obama.

[MichiganVote]

10. Got that right. Look like this administration is gonna cost me more than the last one.

[Jackpine Radical]

5. Shit, Shit, Shit,Shit, Shit.

"High-end" plans are what everyone should have. No deductibles, no copays, no annual or lifetime limits. Goddamit, fuck, sonofabitch, the rich win again.

Come and tell me about that pony I didn't get, you motherfuckers.

This is the reverse-Candida outcome: The worst of the worst...

[Crzyrussell]

26. Maybe it is

social justice, punishing those who have really good healthcare

[Psephos]

45. I think you got it exactly backwards n/t

[MercutioATC]

12. He's looking like the "Manchurian President", isn't he?

Campaign as a "Change" candidate and then, when elected, serve his corporate masters well.

[laughingliberal]

32. Yeah, he is. nt

[MannyGoldstein]

13. "Blue Collar Union Health Plans" Is The More Accurate Term

Sucks to not be rich, I guess.

[glitch]

28. +best answer. nt

[Guilded Lilly]

14. Clear it up for me someone...

this is a tax on the INSURANCE companies. yes?

The House bill was for taxing individuals...yes?

No?
Someone step up and clarify please :)

[dkf]

16. Like a sales tax is on the business not you.

Yup. That works. Not.

[Abq_Sarah]

36. As a SBO

I can confirm this. Every time we're used as a piggy bank, the cost is passed on to consumers. In the end, this tax hurts employees more than anyone. As always, shit rolls downhill.

[jenmito]

17. You are correct.

:)

[Proletariatprincess]

18. This is a sell out.

I hope the Labor Movement is as outraged as it should be now after it gave Obama a pass on the EFCA when he promised to fix health care first. Obama sold out the workers pure and simple. Don't expect him to be any better when EFCA finally gets to congress.
Richard Trumpka are you seeing this? It is time to declare war on this administration. No more nice guy. No more labor peace. We been had....again.

[kelly1mm]

41. I told my union I will exercise my "Beck Rights" if they support even

one political candidate that supports this bill if it includes this tax on union benefits and will urge others to do the same.

[katkat]

93. what's a beck right? n/t

[dmallind]

19. Why is progressive taxation great for income in cash and not OK for income in benefits?

All of DU thinks people who make more dollars need to pay more tax. So do I . Why is that any different from making income in benefits?

[PurityOfEssence]

68. Because this is a middle-class tax

A significant number of people who work for a living making middle-class wages will be taxed here, and that would NOT be satisfactory to many people here. That's why there's outcry.

This is how Reaganite reactionaries split the serfs against unions and affirmative action. It's the same thing all over: divide and conquer by instilling resentment against people who are getting an unfair break. The deal here is not to even things out, the deal here is to find a way to shut people up and take away their hard-gotten gains.

For many union workers here, this proposal gives them NOTHING, potentially takes away coverage, and takes away money. We (and yes, that means my family) are called upon to pay yet another bill and not only not really get anything from it, but potentially see our coverage somewhat reduced.

An ethical justification for progressive taxation is to accurately bill those who are getting so much out of society and have them pay for what they get. An unethical bill is to gouge whomever one can get away with gouging.

You'll note that there's no threshold put in this provision, and that reeks of the same kind of conservative leaps of logic of the past. The crappy argument was that if the rich didn't pay so much in taxes, they'd invest more. What wasn't done was tying the two together and only letting people get a tax break if they used the money to invest, which they don't necessarily do. In this case, the argument is that some people are freeloaders for having the gall of having gotten themselves a decent health plan, and they should have their fortune appropriated for the common good. If this was so, there would be a cap on income in the proposition, but there isn't.

This is nothing short of divide and conquer to foment resentment among the have-littles, and it shows the deep, cynical side of this administration and many of our Democratic Legislators.

It also smacks of the pissy anger that often comes up against tax write-offs for home mortgage interest. Those of us who have honorably worked hard and paid into the system are justifiably wary of constantly being used as the well of financial support for the system. Beyond all that, many of the people who will be hit by this are living with a delicate balance in their personal finances.

[RUMMYisFROSTED]

91. +

[amandabeech]

20. So much for organized labor helping out in this fall's campaigns.

Or in 2012, if not much changes.

Unions have bargained very hard for good health benefits and have given up wage hikes to maintain them. I can't imagine that this will go down well.

How much has to be sacrificed in order for the health care box to be checked?

[paulsby]

40. my union is strongly against this

and if this goes through, he will lose support

[amandabeech]

46. I really wonder who has Obama's ear.

It seems as though the traditional constituencies don't.

I guess it is the banksters and their insurance company friends.

This is very disappointing.

[Zhade]

77. Remember, this is the Orahma administration.

He's a corporatist through and through. He won't be getting my vote again.

[defendandprotect]

22. Rather . . . Obama and the Dems should have been creating a health care

plan under which ALL members of Congress would be included ---

"High end" -- what the heck does that mean?

Companies have steadily been cutting back on health care -- passing more costs

onto employees --

Here in my town, they are bombarding the police with cuts in pay and benefits!

They use lawyers as union busters!!

So, anyone who is lucky enough to have health care will pay taxes on those benefits?

What sense could this possibly make even if it only meant that our members of Congress

would be paying those taxes?

Anyone have anything good to say about this?

[FrenchieCat]

23. Isn't this a way of getting rid of the double tier insurance coverage plan......

so that instead of those who can get it having this "superior" health care insurance plan, this will end up bring basic care to become more the norm?

I don't get why there is this "cadillac" plan shit, and I'm all for discouraging it.

Why aren't folks asking more questions on this, instead of assuming they know what
this tax is all about?

Who exactly is being taxed, and what will be the unintended consequences
of taxing insurance company for offering "Royal" "Elite" "Millionaire" coverage,
taxing them possibly out of existence?

[laughingliberal]

33. It is based on the cost of the premium whether it's called 'cadillac' or not

Has nothing to do with the coverage involved. A lot of people over 50 or companies that have a lot of employees over 50 have premiums high enough to be taxed for some pretty basic type coverage.

[christx30]

86. Yep

And with premiums constantly going up, pretty soon, nearly anyone that has health care is going to have to pay taxes on this care. The only people that won't be taxed are the people that don't have heath care. Except that the individual mandate will take money from there too.
You've got to hand it to the congress critters. They may not know much, but they know how to screw over the voters. Expect everyone's pay checks to get smaller and smaller.
So, be grateful for what you are allowed to keep to support your family.

[Kokonoe]

34. My understanding is its superior because you actually get coverage.

The employer is under union contract to provide insurance.
Because you cannot be dumped, and preexisting conditions must be paid for.

Thats why its too expensive.

[area51]

94. Last I heard,

they can still drop you for pre-existing conditions if they call it fraud.

Every day, 273 people die due to lack of healthcare in the U.S.

Find out more about single-payer.

[chimpymustgo]

59. Read up. This is total bullshit.

http://query.nytimes.com/gst/fullpage.html?res=9C02E0DE1638F93AA15751C1A96F9C8B63

A Less Than Honest Policy

By BOB HERBERT
Published: December 29, 2009

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 on Christmas Eve 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. It's not expected to raise this money directly. 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.

These lower-value plans would have higher out-of-pocket costs, thus increasing the very things that are so maddening to so many policyholders right now: higher and higher co-payments, soaring deductibles and so forth. Some of the benefits of higher-end policies can be expected in many cases to go by the boards: dental and vision care, for example, and expensive mental health coverage.

-edit-

We all remember learning in school about the suspension of disbelief. This part of the Senate's health benefits taxation scheme requires a monumental suspension of disbelief. According to the Joint Committee on Taxation, less than 18 percent of the revenue will come from the tax itself. The rest of the $150 billion, more than 82 percent of it, will come from the income taxes paid by workers who have been given pay raises by employers who will have voluntarily handed over the money they saved by offering their employees less valuable health insurance plans.

Can you believe it?

I asked Richard Trumka, president of the A.F.L.-C.I.O., about this. (Labor unions are outraged at the very thought of a health benefits tax.) I had to wait for him to stop laughing to get his answer. ''If you believe that,'' he said, ''I have some oceanfront property in southwestern Pennsylvania that I will sell you at a great price.''

[daa]

64. A "cadillac" plan is over 23,500.

If you are a diabetic or cancer survivor and can only get insurance for more than 2 grand a month you have a cadillac plan and it will be taxed. Nice eh?

[karynnj]

97. You do understand that is part of a bill that will eliminate pre-existing conditions

In addition, it does not apply to plans you purchase yourself.

[daa]

99. And will not lower the cost of existing plans

whether you have a preexisting plan or not. Or did I miss the part of teh bill that has competition?

[daa]

65. A "cadillac" plan is over 23,500.

If you are a diabetic or cancer survivor and can only get insurance for more than 2 grand a month you have a cadillac plan and it will be taxed. Nice eh?

[Zhade]

78. You're misinformed. First off, unions EARNED this coverage.

They worked for it, they bargained for it, and they gave up pay raises to keep it. Now your hero wants to penalize them for it.

The term "cadillac" is as much a misnomer as "welfare queen". And it looks like you fell for it.

[eilen]

24. Yeah, I saw that story on Yahoo

and seriously, the first thought that came to my head was "what a fucking asshole." Not the usual when I'm thinking of the president. These are usually the words reserved for Joe Lieberman.

[lastliberalintexas]

25. Way to outmaneuver LBJ

He only turned the South over to the republicans with the signing of the Civil Rights Act, Obama is trying his damndest to make sure no Dem ever gets elected again. At least the Civil Rights Act was worth losing votes over.

[glitch]

30. Nevermind, who needs actual votes from citizens?

The corporatists have abandoned the batshit crazy Republicans, they have no where else to go.

[bertman]

37. Another day. Another capitulation.

K & R

[JelloSka]

38. Instead of him saying it on CSPAN, he sent anonymous aides to the Press

Promises, promises.

[Goldstein1984]

39. I'm just going to wait and see what happens

I've contacted the White House, my senators and my congressman by phone and email to explain with the plan can and cannot have if they want my campaign support and vote when they are next up for reelection.

This is the kind of bill upon which politicians build legacies. I can certainly base my support for a candidate on whether the final product works for Wall Street or Main Street.

It's taken me a few weeks to make the decision, but the final form of health care reform is the make-or-break issue for me.

[Harry Monroe]

42. I'm a union member and have one of these so called "Cadillac" insurance plans

So, he wants to tax our moderate plans instead of taxing the rich? Fuck you Obama!! You are fast becoming dead to me!!

[Katya Mullethov]

72. When you try and soak the rich

Eventually , you end up being "rich" .

[PSPS]

44. I sure hope this will be Bush's last term

[Iowa]

47. Twelve long disastrous years of Bush/Obama... the national nightmare continues.

[Hardrada]

48. How do they think they will avoid massive civil unrest over

all this corporatist cruelty? Or widespread strikes and slowdowns?

[Zhade]

79. American Idol, McDonald's and XBox.

We're too spoiled to fight back.

[w4rma]

49. Obama is screwing up. The Senate can bend. (nt)

[pattmarty]

50. KILL THE BILL!!!!!!!!!!!

[madrchsod]

52. another serious lack of judgment by obama/rahm

giving the republicans another hammer and nail shows a serious lack of political judgment.

[Cass]

53. How exactly will this tax work....will these plans now be taxed as income?

So, for example, if an employee makes $50k/yr salary but his or her health plan costs the employer $10k/yr the employee's income is now figured to be $60k and taxed accordingly?

What is considered a "cadillac plan" under this bill - is it based on premium amount or plan benefits? Some people pay enormous premiums due to pre-existing conditions, age, etc and those plans are certainly not "cadillac plans" - they are minimal or standard coverage plans but with a big price-tag.

I'd like to know why Pres Obama decided to draw a line in the sand on this particular facet of HCR especially since he campaigned against a similar proposal from McCain during the campaign. It would have been nice if he would have taken such a forceful stand on other aspects of HCR like a public option.

[nightrain]

54. it just keeps on getting worse and worse, in order to pass "something"!

Obama is making HUGE policy errors. Watch him self-immolate... so sad... This is what happens when you get in bed with the corporations...

[freddie mertz]

55. With every step, the Rahm/Obama team break promises and betray the people...

Who put them in office (though I NEVER voted for the Rahm-bot), the better to feed the maw of their corporate masters.

I was never overly optimistic, but this is much worse than we expected, or deserved.

A pox upon them, and a pox on the Dem House if they don't stop this thing now.

[MrsBrady]

57. I'd like to know how much this tax is? does anyone know?

that way I know how much we need to adjust our budget.

The union is pissed, I heard.

Does anyone know how much the tax is?????

[Realityhack]

60. The version passed...

would be 40% on the portion of the health plan's cost in excess of $8,500/year for individuals or $23k for families (IIRC). But there is always a possibility that those numbers could change as it is only in one of the bills to be reconciled.

[daa]

61. Obama Backs Cadillac Tax as Pelosi Faces Discord on Health Bill

Source: Bloomberg

By Laura Litvan and Kristin Jensen

Jan. 7 (Bloomberg) -- President Barack Obama is pushing U.S. House Democrats to drop their opposition to a tax on high- end insurance plans as lawmakers try to craft a final health- care measure by early next month, a Democratic aide said.

The president expressed a preference for a Senate proposal to tax so-called Cadillac plans in a meeting yesterday with House Speaker Nancy Pelosi and top party lawmakers, the aide said. The White House meeting came on the eve of a conference call Pelosi plans for noon today with her chamber’s Democrats.

Pelosi is facing resistance as she tries to resolve differences in House and Senate bills that would mark the biggest changes to U.S. health policy in 45 years. The Cadillac tax is opposed by labor unions, which are among the party’s strongest backers, and 190 House Democrats.

“I realize the White House has a timeline they want to meet here, but particularly on the tax issue, there is great potential for blowback,” said Representative Joe Courtney, a Connecticut Democrat who’s helping lead opposition to the tax.


Read more: http://www.bloomberg.com/apps/news?pid=20601087&sid=a8G4txqEyxMI&pos=8

[Dr.Phool]

62. WTF is a "Cadillac Plan"?

Is it the same bargained for, health plan I had when I was working? You know, a plan that actually paid for something?

Blowback is right. They're going to find out just how bad they don't need that union support this year and in 2012.

[WriteDown]

63. Substitute the word "cadillac" for "union". nt

[Efilroft Sul]

96. Exactly! People are using Frank Luntz-type terminology here. N/T

[karynnj]

98. Only 3% of all plans qualify as Cadillac plans - many of those are not union plans

So, there are MANY union plans not affected and many non-union plnsa that are.

[highplainsdem]

66. Great. Another president who thinks his base is "the haves and have mores."

Lovely way to pay back all that union support he was given...

Good for Pelosi for making it clear that this is Obama's choice, and distancing herself from it.

[tomp]

67. boy, this guy really sucks.

not voting for obama in 2012 with or without this heinous tax.

but this shows obama is a liar. obama has publicly stated that americans already pay enough to ensure care for everyone, and even with that we are low on the totem pole of quality care. it's not about the money except in giving more to insurance companies. i don't know how anyone can still support this asshole.

[Zhade]

81. His lie about not campaigning on the PO proved that. With video evidence.

I shouldn't be, but I'm stunned how many promises he's broken. I thought, maybe a couple -- but this is insane.

[saracat]

69. Except those Cadillac Plans aren't really Cadillac abd this is breaking another promise to the union

The Unions are the ones most hurt by this.

[DebbieCDC]

73. Wow more change!

[Vidar]

74. More union busting from Bush Lite.

[shireen]

75. what does 'high-end health insurance' mean? nt

[Zhade]

82. Whatever they want it to mean, as long as it benefits corporations over us.

NT!

[shadesofgray]

84. Next up: privatizing social security

[w4rma]

85. I wouldn't be surprised. Obama is already privatizing public schools at a brisk rate. (nt)

[katkat]

87. Obama Urges Excise Tax on High-Cost Insurance

Source: New York Times

President Obama told House Democratic leaders at a meeting on Wednesday that they should include a tax on high-priced insurance policies favored by the Senate in the final version of far-reaching health care legislation, aides said.

Read more: http://www.nytimes.com/2010/01/07/health/policy/07health.html

---

And when you heard he'd taken a break from Mount Olympus to talk to the people actually putting together the healthcare bill, you thought he was going to push the public option, you silly, you.

[ixion]

88. yeah, they're taking their time with this scam...

I'm sure it will be a most efficient screwing for the middle-class taxpayer. :grr:

[Ed76638]

89. What is it with politicians and political suicide?

Is Obama really that big of a goddamn nub?

[AzDar]

90. Let's face it, he's becoming a nightmare. Promise after promise is being broken.

Principle after principle is being abandoned. :grr:

Won't get fooled again.

[newspeak]

95. I'm sure many have seen the graph since the 1930's on progressive tax

on the wealthy. Since Reagan and his great trickle on scheme, the wealthy have not paid their fair share for our infrastructure or the wars we fight in their name or the profits they make from those wars. Remember when * stated publicly that he was cutting their tax, because they don't pay it anyway (another words they find ways around not paying their fair share). I love the way they have labeled these health care packages "cadillac" benefits, as if the wealthy are the ones who have these benefits.

If they are going to pass this bill-which I think is a bad bill as written-then tax those who have been making a killing for over thirty years-not those workers who have consistently lost ground in the last thirty years.