"President Signals Flexibility on Health Plan Tax"

[Clio the Leo]

President Signals Flexibility on Health Plan Tax

By SHERYL GAY STOLBERG and STEVEN GREENHOUSE
Published: January 11, 2010
WASHINGTON — President Obama told union leaders at a private White House meeting on Monday that he remained committed to taxing high-cost insurance policies as a way to drive down health costs. But he also signaled that he was willing to amend the proposal to “make this work for working families,” a senior administration official said.

The excise tax is a major point of contention as White House and Congressional negotiators seek agreement on a final version of a sweeping bill that would extend health coverage to more than 30 million Americans. The Senate version of the bill includes such a tax on employer-sponsored health benefits; the House version does not. Union leaders deeply oppose the tax.

Mr. Obama’s remarks, at an hourlong session with a dozen labor leaders in the White House Roosevelt Room, came just hours after the new president of the A.F.L.-C.I.O., Richard L. Trumka, delivered a speech at the National Press Club in which he criticized the tax as a “policy that benefits elites” and warned that Democrats would pay a price at the polls if it was enacted.

Privately, Mr. Obama and the union officials used Monday’s session to search for a sort of compromise, said a union leader who was briefed on the discussion. This official, who said the tone of the meeting was friendly, said it was clear that there would be some sort of excise tax in the final bill, but that the president “threw out some new concepts” in how it might be designed.

The 40 percent excise tax would apply to any cost above $8,500 for individual policies and $23,000 for family plans; the Congressional Budget Office has estimated it would generate $149 billion in tax revenues over 10 years, which would help Mr. Obama meet his goal of passing a health bill that does not add to the federal deficit.

More...
http://www.nytimes.com/2010/01/12/health/policy/12health.html?ref=politics

[sui generis]

1. good for families. Since I don't have a right to define my family

it's pretty much just a bunch of noise.

[Captain Hilts]

2. The goal posts are constantly moving.....nt

[MadHound]

3. The only way to make this work for working families is to tax the rich, directly

I also noticed the contradiction in this little article, specifically "President Obama told union leaders at a private White House meeting on Monday that he remained committed to taxing high-cost insurance policies as a way to drive down health costs. But he also signaled that he was willing to amend the proposal to “make this work for working families"

You can't have it both ways, either you do away with the excise tax and or you don't. In the first case, you help the working class, in the second case, you hurt the working class.

This is excise tax is going to kill the middle class.

[LiberalFighter]

7. How does one drive down the health costs by taxing the policies?

Unless, it encourages more people not to use their health care.

Unless, it encourages more people to die sooner.

[karynnj]

11. You are speaking of constraining the cost of plans that far exceed

the average cost. What this would do is give insurance companies the incentive to tweek plans as they start to drift above the limit to stay below it. The reason is that for every $1000 they get to keep above the threshold, the companies must pay $1400. This would push them to find efficiencies - some of which may come from lowering administrative costs which they need to do anyway. The reason there is an incentive is easily seen - imagine one company offers them a $23,000 plan and the other a $24,400 plan - given the insurance company gets only the additional $1000, it might be hard to sell it as worth $1400 extra.

[LiberalFighter]

16. What is to keep the insurance companies to downgrade the plan when they reduce the costs.

The only constraint I see is the cost of the plan itself. Not the profit margin. Or is there?

[karynnj]

20. Yes there is 85% of the premiums/ payments have to go to

actual medical expenses. This means that administration and profits are limited to 15%. If you effectively limit the premium cost - this is 15% of a fixed number.

[levander]

24. Or, the easy way is just to reduce benefits...

For them to do it the way you describe, there'd have to be some incentive for the insurance companies over just reducing benefits.

Why would they do it the way you suggest and not just the easy way?

I could see it if this were an effort to across the line make insurance policies less expensive. Then, the focus on reducing costs becomes much more of an issue. It's everywhere. But, this is just the cream at the top.

Why wouldn't they just reduce benefits?

And note, this is the Center for Medicare Services conclusion on the tax:

Another provision that would tend to moderate health care cost growth rates is the excise tax on high-cost employer-sponsored health insurance coverage in section 9001 of the bill. In reaction to the tax, many employers would reduce the scope of their health benefits. The resulting reductions in covered services and/or increases in employee cost-sharing requirements would induce workers to use fewer services.

They don't say nothing about the excise tax causing insurance companies to offer more services for less money...

Source: http://www.cms.hhs.gov/ActuarialStudies/Downloads/S_PPACA_2009-12-10.pdf">Click

[karynnj]

10. It signals that he will back changing the thresholds as to when the tax takes hold

Something Pelosi and liberals in the House and Senate have argued for for months. It is not black or white, excise tax or no excise tax. The fact is saying this is for the "elites" is ridiculous and spewing polenmics on the part of the labor leader. The elites are the people initially taxed on this - the union concern is that they may edge above the tax at some point in time. (ie people with $40,000 plans will have the insurers charged $6,800, if your plan was $25,000 (higher than any current union plan) - it would be charged $800.)

My guess is that this is bluster on the part of the unions. It is hard in the current environment to make contract gains. This is something they can point to when the limits are revised upwards - something that everyone from Pelosi to Stabanow to Kerry have fought for for months. What will likely happen is that the union energy will help Pelosi/Stabanow/Kerry etc get this improved to the limit where it can still pass the Senate. Then it will be a win/win situation.

[MadHound]

19. This isn't bluster on the part of the unions, this is genuined rage,

Which I share wholeheartedly. There are many plans out there above $25,000 currently, mine included.

But rather than simply going through all this hassle about taxing the plans, let us make it clear, concise and to the point, tax the goddamn rich rather than fucking around with plans, policies and language that will ultimately lead to the destruction of the unions and the working class. Is that now too much to ask from this party, this Congress, this president? If so, then it is definitely time for me to move on from this party because it has become fucked up beyond all recognition.

[kenfrequed]

4. What I hate is...

That the insurance lobby, through its pawns eliminated Single payer, the Public option, the public option with a delay, the public option with triggers, and medicare for all.

While labor, an actual constituency with votes(and not merely a lobby donating money), has to negotiate a tax down that is destined to affect working class people.

Really irritating.

[Rosa Luxemburg]

22. give the lobbyists a big surprise by

taxing the people they are lobbying for!!! We can also arrange a special lobbyist tax too?

[shadesofgray]

5. "New concepts"? I think it's a new concept for a Democratic president who

can't win without union support treating the unions like they have to put up with this "compromise" shit in the first place.

A very disturbing, disgusting, concept, in which the definition of "compromising" is "getting screwed."

[thesquanderer]

6. Flexibility? We're getting really good at bending over. (n/t)

[Laelth]

8. Oh, isn't that sweet.

Obama has signaled his willingness to compromise with labor, although he remains committed to hurting labor (taxing negotiated health care benefits). Compromise with labor? You have got to be kidding. I want him supporting labor and occasionally compromising with the right wing.

I am so angry I could spit nails. I thought we elected a Democrat.

:dem:

-Laelth

[LiberalFighter]

9. Why was it necessay for the union to get into this before he was willing to amend it?

I wonder how far he is willing to amend the proposal?

I would think with his background as a community organizer that he would had pushed hard for HCR. I'm wondering who is driving this.


And I wonder if the other groups supporting HCR have laid this out right. Meaning what would be the cost savings to employers that pay for their employees' health care, savings to the employees that pay for all or part of their health care, savings to local and state government budgets because the cost would be lower, savings to taxpayers because taxes could be lower. What would also be the savings with streamlining the process of submitting bills when it only involves one entity to send it to? There are probably other savings that can be accomplished if they really wanted HCR.

[Clio the Leo]

12. How do you know he wasn't willing to amend it before yesterday?

.... you got a source on that?

[LiberalFighter]

15. I hadn't heard anything that suggested that might be the case.

And if the labor unions needed to meet with the President about this issue it would suggest that it wasn't on the table before this. Labor unions and the AFL-CIO have representatives on the Hill that normally work the rooms. It is rare that labor needs to meet otherwise.

[freddie mertz]

17. Well, the prez is the one who's been pushing it to the House, right?

He's made it clear that he thinks this tax on benefits obtained through collective bargaining is just the thing to "reduce costs."

To his shame, IMHO.

[Generator]

18. How about freaking Nancy Pelosi

you know leader of the HOUSE, who actually has some members that actually support you know PEOPLE instead of only big pharma, insurance companies and their own career.

http://tpmdc.talkingpointsmemo.com/2010/01/pelosi-obama-committed-to-unpopular-excise-tax.php

House Speaker Nancy Pelosi just returned to the Capitol from a health care meeting at the White House. Walking toward her office, I asked her whether the Senate bill's "Cadillac tax" on high-end health care plans, which both the Senate and White House are pushing, would be a hard sell in the House.

"It's not a very popular initiative in the House or in the public," she said. "It's something the President is committed to, and we'll see how it works out."


It would have been nice if he was committed to something he did fucking campaign on. He is is a total liar.

Good God. You see sunshine when we are fighting the rain every day against this guy. Obama was supposed to you know, be on our side. Don't you find it hard to keep convincing yourself he's on your side, when everything says the contrary?

[freddie mertz]

13. Just drop this lousy tax. Like you promised, Mr. president.

I heard you in the campaign.

[Bluenorthwest]

14. Like the mandates he claimed to oppose this too

this man of high blown morals. He needs to be a man of his word. The politicians who run around shouting about their faith and how they are bigots for God are always in the end the most blatant liars in DC. Look at Edwards...'my father was a deacon, my traditional marriage views are simply a part of me." Which part of him, he did not say. Every word spoken by such men is a lie.
During his campaign Obama not only opposed this tax and the mandates, he mocked and ridiculed those ideas and those who held them.

[Rosa Luxemburg]

21. The easy way is to TAX THE INSURANCE COMPANIES DIRECTLY

increase tax on insurance companies 10 fold. After all how much profit are they making at our expense and lining the pockets of the fat cat CEOs?

http://www.forbes.com/lists/2009/12/best-boss-09_CEO-Compensation-Health-Care-Equipment-Services_9Rank.html

[ibegurpard]

23. Not good enough

the whole stinking bill that came out of the Senate needs to die and they need to start over.