Tax on Health Care Will Erode Coverage for Middle Class

[IndianaGreen]

Tax on Health Care Will Erode Coverage for Middle Class

by Tula Connell, Jan 4, 2010

A new year brings with it lots of hope.

Let’s hope 2010 brings a health care reform bill that does not penalize working families with a tax on their coverage. Because right now, as New York Times columnist Bob Herbert aptly describes it, there is a ”middle-class tax time bomb ticking in the Senate’s version” of the health care reform legislation.

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.

Jon Walker at Firedoglake took a look at a report released in December by the Centers for Medicare and Medicaid Services, which found the health care tax “will result in most people getting worse health insurance from their employer, insurance that covers less.” Walker translates the report’s conclusions this way:

Your employer will reduce what your current insurance plan and put in place high co-pays and deductibles. The result is that many people with employer-provided health insurance will see their insurance get much worse. For younger, healthier employees, possibly getting less comprehensive insurance but maybe higher wages (I think it is very doubtful that there is a pure dollar for dollar passthrough), this might be a decent deal. For older, less healthy employees this is a very bad deal. They will be forced to pay much more out-of-pocket for their health care.

More cost, less coverage for working families. Yet portraying the tax as only affecting ”Cadillac plans,” purposely obscures how it will harm America’s working families.

Or, as Herbert puts it:

The tax on health benefits is being sold to the public dishonestly as something that will affect only the rich….

http://blog.aflcio.org/2010/01/04/tax-on-health-care-will-erode-coverage-for-middle-class/

[FreakinDJ]

1. Not "Change I can believe in"

[defendandprotect]

2. That seems obvious ....

[mn9driver]

3. This will turn hundreds of thousands of union members against Obama.

It's fascinating to me that Obama is so committed to making his base stay home next year, and in 2012 also. I strongly believe that even a "centrist" Democrat is at least a little better than any GOPer, but it's getting harder and harder to justify supporting this kind of crap.

[IndianaGreen]

4. When push comes to shove, people will vote their pocketbook issues

If the outcome of HCR is crappy and expensive insurance, together with a tax on health benefits for working Americans, the workers will retaliate at the polls. That's just a fact of life!

[GinaMaria]

7. Center would be a move in the right (Left) direction.

We seem to have two conservative parties to choose from right now.

[doc03]

5. It will also erode support for Democrats in 2010. n/t

[Odin2005]

6. That's the point.

The Corporatists have wanted to destroy the Middle Class since FDR.

[johnaries]

8. Oh, bullshit. First of all, if you can afford a $23k plan you AIN'T

"Middle Class".

Secondly, these "Cadillac Plans" have extremely low or no co-pays or deductibles. So if an employer replaces the "Cadillac Plan", that simply means you'll be payint the same co-pays and deductibles as everyone else, which are also limited by the Bill.

So, bullshit.

[Jeff In Milwaukee]

9. And here's the other thing....

These plans are often provided to employees in lieu of pay. So let's be clear on one point. Any amount spent on a Cadillac Plan could have been included in my salary -- but I would receive a more modest insurance option.

So my employer has $10,000 that he could put on my paycheck or he could provide to me as a healthcare benefit. YOUR employer has the same option.

My employer puts that $10,000 into my insurance plan. YOUR employer puts it in your paycheck.

I don't pay taxes on my $10,000. YOU pay taxes on yours.

WTF?!

[dugaresa]

10. The cost of a good health insurance plan for an employee at a large company is about $24K

as Jeff posted, the employer pays half or perhaps more of this plan as a benefit.

My spouse worked for a company with a plan like that and it was great, our cost out of pocket was around $700/month before my spouse left that company. The company covered the remainder.

If they levy a tax on such a plan it means that the employer may drop the plan or pass more of the cost to the employee.

This could affect a lot of middle class workers across the board who work for companies large and small that offer such nice benefits.

[Hell Hath No Fury]

11. My Mom had one of those plans --

back in the day. She made an OK, lower-middle class salary which was made up for by excellent health benefits. As someone who had extreme health issues that required many high cost medical intervetions, having her benefits reduced/copays increased would have broken her.


So, no, not "bullshit".

[busymom]

12. Wrong. Wrong, wrong, wrong....

We have a cadillac plan...and my husband earns a nice income. We pay ~$1700 out of pocket per person in our family per year with a max family out-of-pocket payment of ~$6500 before our insurance kicks in. That is no low or no co-pays/deductibles. Oh...and my husband is a physician.

Every physician in the hospital system (large) has the same plan for their families.

Speak only of what you know, please!

In case you are wondering, we aren't visiting the bank to swim in our money (though the banks are plenty interested in the payments we make on the $150,000k student loan payments, etc. The $1700 definitely effects how we can access health care. In other words, we go to the doctor only when truly necessary and it is not easy on our pocketbooks (contrary to popular opinion around this dump!)