St. Louis Today editorial: "Cadillac" tax (which Obama says is a GOOD IDEA) hurts middle class

[Bluebear]

Most people have a good idea what they’re getting when they buy a car. Spring for a Cadillac, you get a large, luxurious automobile. Pay less for a Kia, you get basic, practical transportation.
That’s not the way it works with health insurance. You can easily pay for a Cadillac policy and wind up with Kia performance.

Now, Congress wants to start taxing so-called “Cadillac health insurance” plans. In theory, it’s a good idea. In practice, a lot of middle-class people will wind up paying for Kia policies.
The tax has been favored by some economists and conservative politicians for a long time. Presidents Ronald Reagan and George W. Bush and Republican presidential candidate John McCain proposed such a tax. Now President Barack Obama and Senate Democrats are calling for a Cadillac tax to help pay for health care reform.

Most Americans get insurance through their jobs. Unlike pay, insurance benefits aren’t taxed.
The idea behind that was to increase the number of insured Americans, a social good. But there are drawbacks.

For one, the tax exemption is regressive. People who benefit the most are those with high incomes who pay the top tax rates. They can best afford to buy insurance, even without the tax break.
It also encourages some companies to offer overly generous health insurance coverage, which insulates people from the true — and very high — cost of care.

A tax would prod companies to provide less expensive policies, often those with higher deductibles and co-payments. Studies have shown that even relatively modest co-pays drastically reduce the amount of care people get, without leaving them sicker.

So what’s not to like?.... read further at:

http://www.stltoday.com/blogzone/the-platform/published-editorials/2010/01/cadillac-health-insurance-tax-hurts-the-middle-class/

[Craftsman]

1. It will. And it is a bad idea.

[stray cat]

2. It may control spending but it means less in terms of benefits

but does anyone really think we can get coverage for the majority of Americans without more than only the uber rich sacrificing? Wealth redistribution may also mean taking it from the middle class

[Lasher]

4. This very measure takes from the middle class.

The 40% excise tax will affect a minority of taxpayers. But of those it does affect, a majority makes less than $200,000, according to the Joint Committee on Taxation.

http://www.politifact.com/truth-o-meter/statements/2009/oct/21/sarah-palin/sarah-palin-health-care-reform-taxes-middle-class/

And I do think we could get coverage for everyone (not just the majority) without spending any more than we do now. We're spending more than enough already. The problem is how we're spending. Canada's per capita expenditures, for example, are about half of those in the US. They insure everyone and their results are better.


http://www.yesmagazine.org/issues/health-care-for-all/1503

And why is this so? The biggest reason is, we are the only industrialized nation on earth that does not have universal health care. And this HCR bill will not change that.


http://blogs.ngm.com/blog_central/2009/12/the-cost-of-care.html

[Bluebear]

7. indeed.

[mdmc]

3. cadillac plans = good access to affordable health treatment

jalopy plans place profits before treatment, and increase profits by placing barriers to treatment.

Our elected officials have a cadillac plan.
Every citizen in the free world has a cadillac plan.
Yet, we have, in America, jalopy health plans that place profit before treatment.

ps- Studies have shown that even relatively modest co-pays drastically reduce the amount of care people get, without leaving them sicker. lets see these studies.

[Jeff In Milwaukee]

5. Oh Dear God...

I do wish people would learn the basics about this subject before posting opinions. The editorial is a mash-up of urban legends and outright nonsense.

Their take is that we're paying way to much for insurance (Cadillac Cost but Kia Coverage) and there's some truth in that. But the Cadillac Plans that will be taxed (with taxes paid by the insurer) are plans that typically have Health, Dental, Vision coverage along with no deductibles and very small (if any co-payments). These are plan that cost more than $23,000 for family coverage -- all of which is paid by the employer.

By way of example, I have family coverage with a $2,500 deductible and it costs my employer about $4,500 per year - I pay the other half. So my fairly decent coverage costs $9,000. We're nowhere even within shouting distance of the $23,000 maximum.

And they don't even understand the tax implications of all this. When you give a high-income employee benefits in lieu of wages, those benefits go untaxed. So if employers eliminate the Cadillac Plan and replace it with wages, it will be high-income persons who pay more in taxes, since the income tax is progressive.

[Bluebear]

6. I think I will take my Union's opposition to this over "Jeff from Milwaukee"

[TheKentuckian]

8. Oh its more laughable trickle down talk. The theory has lots of evidence of fail

The last thirty years is enough for me but you keep believing ole Unka Ronnie.

Replace with wages! That's rich!!! You ought to do a comedy club, you'll be a riot.