NYT credits Sen. Kerry for insurance reform mentioned tonight by Pres. Obama.

[wisteria]

"To help raise revenues to offset the cost of overhauling health care, Mr. Obama took a stand on an issue about which he has equivocated for months. He endorsed the idea of imposing a fee, or tax, on health insurance companies for “their most expensive policies,” which typically go to business executives and other high-income people.

Proponents say the idea, which originated with Senator John Kerry, Democrat of Massachusetts, would encourage employers to buy cheaper, less generous coverage for employees, thereby reducing excessive use of medical services."


http://www.nytimes.com/2009/09/10/health/policy/10health.html

[karynnj]

1. I don't like the description in the second paragraph

This affects plans only above $20,000 some - which is substantially above the typical family plan that is $12,000 - $16,000. If all the employers moved to the highest plan that doesn't incur the tax, there is no revenue stream. In reality, the employers would likely continue to buy it and pay the tax, which they might pass on the employees.

By less generous, they tend to mean plans that have no co-pays and pay for almost everything. I question though whether a business executive would be more reluctant to see a specialist if his/her policy had the $50 co-pay that is common for specialists. These are high income people you are speaking of - so I don't think co-pays that to these people are small will cause them to think twice before making an appointment.

- this is in addition to it sounding bad that they want companies to be less generous.

[wisteria]

2. I don't necessarily like that sentence either. And, I also don't see it working in that way.

However, corporations and those with money can be very, very conservative in their spending habits and it could be, they will in fact, pull back and choose cheaper coverage. But, even if this does work out the way you suggest it will, they will pay the tax and if they pass it along to the employee- it will be someone who can well afford the additional cost. I would bet that our Senators have insurance coverage that closely resembles what is termed Cadillac plans,I wonder what they would chose, cheaper insurance or large premiums?

I think something might be missing in the description. I would like to see the entire proposal.

Oh, and I made sure I posted the information on this idea only applying to high end insurance coverage that is offered to wealthy employees. It could easily be misinterpreted.

[karynnj]

3. I agree on all points you made

The tax on the marginal part above the threshold if passed on would STILL mean they are paying less than most others because they have far lower (or non-existent) co-pays and deductibles etc - and, in general, they are also far wealthier than average.

Thanks for posting the link - it is good that they are crediting Kerry as it is an important contribution to the overall bill.