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Posted by on Sep 14, 2009 in Health | 33 comments

The Landmine in Obama’s Health Care Plan

o_laugh.jpgFollowing the last round of speeches, we have found out one thing… President Obama has claimed the Max Baucus compromise health care bill as his own. So you can call it the Baucus Plan or the Obama Plan or the compromise, or whatever you like. But this is, at least for now, Obama’s plan. While we still don’t have a full copy of what the Finance Committee is cooking, some of the details have been released to the press, and it includes some eye-opening factoids.

As usual, the largest looming questions focus on how this will be paid for, and now we’re getting a pretty good idea. Check this out.

COST: Under $900 billion over 10 years.

HOW’S IT PAID FOR: Fees on insurance companies, drug makers, medical device manufacturers and insurers. Tax of 35 percent on insurance plans costing more than $8,000 for individuals and $21,000 for families, applied to premium amounts over the threshold. Cuts to Medicare and Medicaid. A fee on employers whose workers receive government subsidies to help them pay premiums. Fines on those who fail to get coverage.

Did you catch that little item they slipped in there? A tax of 35% on plans costing more than 8k in premiums. (Please note… for those of us who get our coverage through our employer, that’s not what you pay out of your check. It’s the total premium paid by both your portion and that paid by your employer.)

My wife and I each have our own plans through our employers so I ran off to check on mine. And guess what? DING DING DING! Yep… mine cost more than 8k annually. This is a “Cadillac plan?” I intentionally took the one with higher deductible levels and co-pay to keep the cost down! And I’m going to get nailed with a tax of more than one third the cost of it? Or my employer is? What could possibly go wrong?

And in case you missed the last sentence there, any American who, for whatever reason, isn’t paying for a health insurance policy from a private corporation out of their own paycheck will now have a fine imposed on them by the Federal government. I can just imaging the Supreme Court taking a look at that one.

Here’s where some of that money is going:

SUBSIDIES: Tax credits for individuals and families making up to 300 percent of the federal poverty level, which computes to $66,150 for a family of four. Households up to 400 percent of poverty line could also get some relief. Tax credits for small employers.

66K? Are you kidding me?

CHANGES TO MEDICAID: Income eligibility levels raised to 133 percent of poverty for parents and children 6 and older. Childless adults making up to 133 percent of poverty would be eligible for the first time. The expansion would be delayed until 2014.

The more I read of this the more I shake my head. We’re spending our time talking about “death panels” and pulling the plug on granny while we should be looking at the specifics of the disaster we’re about to have foisted off on us, even if it doesn’t include the even more crippling “public option.” (For the record, the Obama / Baucus plan does not, as currently written in Finance.)

GOVERNMENT-RUN PLAN: None. Would create nonprofit, member-owned co-ops to compete with private insurers.

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Copyright 2009 The Moderate Voice
  • Kastanj

    “SUBSIDIES: Tax credits for individuals and families making up to 300 percent of the federal poverty level, which computes to $66,150 for a family of four. Households up to 400 percent of poverty line could also get some relief. Tax credits for small employers.66K? Are you kidding me?”Even at this current level, healthcare costs still manage to bankrupt the most Americans, and a majority of these bankruptcies happen to people who have insurance.This is mostly because your system is completely insane. You pay more for a lower chance of getting very good care, rather than paying much less for a guarantee of sufficient healthcare. But if the US wants a system where “even you” can have gold-plated IV stands as long as you work hard enough and isn’t hamstrung by an untimely germ or accident, I guess it’s hunky-dory. Basically, it’s too painful to give up the dream of one day having one of those really fancy hospital beds with a whole team of strangely attractive and ethnically diverse medical specialists having up-tempo discussions about your problem, just like on TV. There are pros and cons with every adjustment of the toggles – it’s just that in the US the equation isn’t generating much consumer surplus, and the producers don’t have an incentive to do anything about that. Monopoly of a few companies is just as bad as monopoly of the state. You’re being reamed, and apparently 70 000 billion Americans are asking for more.

  • Father_Time

    It doesn’t matter.

    Vote for the government run “option” and it will be expanded later into finally a full socialized medicine system. Then we will have proper healthcare costs in line with the rest of the modern world.

    The Republicans just want to delay the inevitable by forcing the creation of a bill, (plan), that will fail as a piece of legislation, or, should it pass, fail as a system.

    The Republican party DOES NOT WANT TO CONTROL COST. It’s just to darn profitable for them and their Insurance/healthcare industry puppet masters. Republicans do not want all Americans to be able to afford healthcare. They want you in debt. It’s better for business.

    • vey9

      “Vote for the government run “option””

      Not going to happen. Here is what we will really get:

      There will be no exclusions for pre-existing conditions.
      There will be lower co-pays and lower deductibles.
      There will be limitless lifetime benefits.
      There will be a choice of plan and doctor.

      There will be no tort reform.
      There will be no financial incentive for people to live a healthy lifestyle and lower the cost of their care.
      There will be no penalty for ignoring doctors’ orders and raising the cost of their care.

      There will be no tax increase.

      The plan will have to bend the health-care cost curve down, but there will be no method to do that.

      To summarize: We will provide coverage for millions more people, preserve or improve existing benefits and in the process reduce the cost of health care.

      So how would we pull off this miracle? We will cut waste, fraud and abuse.

      THAT’S what our Democratic Congresssmen have planned for us and that what we will get.

      I freely admit that I stole this from this column:
      http://www.orlandosentinel.com/news/local/orl-health-care-kosmas-thomas-083009,0,1679971.column

      • Father_Time

        Fine.

        Support it now or support it later. When 4% of the population financially supports the entire U.S. healthcare industry, you will then beg for socialized medicine. At the current rate that should be about 2016.

        Full Nationalized Socialized Medicine is the only answer to cost. The world has already proven it.

        • vey9

          I’m with you. The Congressmen and Senators are not.
          What I see coming down the pike is Part “D” Heavy. Our elected officials will play Santa Claus again and just add a couple more trillion to the debt.

          Right now, we are at about ~80% of GDP to Public Debt (including Social Security obligations). That’s about where we were when Reagan left office. No one knows how high it can go without crashing, but the UK hit over 250% during WWII and suffered badly for many years afterward.

    • CStanley

      Republicans do not want all Americans to be able to afford healthcare. They want you in debt. It’s better for business.

      Of course! I don’t know why I never thought of it that way before. Obviously all successful businesses know that they’ll be much more successful if a large percentage of their customers are buried in debt, or bankrupt.

      • Father_Time

        Apparently so.

        • CStanley

          LOL….alrighty then.

      • Jim_Satterfield

        Wall Street certainly seems very happy with that situation, CS. Without exception “analysts” always support mass firings on the part of publicly held companies, jobs being shipped overseas and jobs being automated out of existence. Those businesses always seem willing to go along, too. Why should they treat health care any differently? You were expecting the wisdom of the free market system to come to the rescue or something? Dream on.

        • CStanley

          The difference is in intent, Jim. You might argue that massive unemployment, debt, or other personal financial hardship on large numbers of consumers is the consequence of actions of business leaders, and that they’re shortsighted when they don’t recognize that.

          But what FT said is that they INTENTIONALLY create those conditions en masse BECAUSE that is ‘good for business.’ That’s the part that makes no sense.

  • Leonidas

    Yes you can keep your current plan under Obama’s plan, it will just cost you 35% more than it currently does.

  • It would be horrifying, Jazz, if what you were interpreting here were actually what the bill (and the article) said.

    That fine isn’t on anyone who fails to buy insurance. It’s a fine on anyone who fails to have coverage. There is a difference.

    So let me get this straight… You would rather pay for a person’s health care coverage than to have them pay for their own? Those who qualify for Medicaid and do not already have private coverage elsewhere are automatically enrolled, so that doesn’t exactly constitute paying “out of their own paycheck.” Basically, all this means is that if you show up in an emergency room without coverage, you pay a fee rather than the cost of your treatment getting passed around to everyone else like it is now. To boot, having a pool of younger, healthy patients helps to offset the cost of covering older, sicker ones.

    There is also a selective exclusion on the cap included in the bill as to the amount you can be charged in taxes. Those affordability credits are not only meant to help families get coverage, but also to offset new costs you might not have had before (like having to buy insurance or maybe a tax you weren’t meant to have). There is also a cap on how much you can pay out of pocket in copays and such per year ($5,000 for an individual and $10,000 for a family). After a person has paid that much, they pay no more. As it stands NOW, insurance plans have a cap on how much THEY will pay per year, and after that, YOU pay the rest. A cap on out of pocket costs means (again) less cost to you.

    Now, if you’re paying $100 more in taxes, but you’re reimbursed $80 in credits and getting $80 in savings on top of that, do you have more or less money in your pocket?

  • Or you could do nothing, Leonidas, and that plan will cost you 60% more in three years.

  • Silhouette

    placeofnopity dot com has an idea to boycott the states who don’t support the public option now. Father Time is right, we are an embarassment to ourselves on the world scene but worse than that, the equivalent of the GOP in other developed nations have figured out that covering their workers without financial worry makes them happier, more productive and guess what? Their companies are more solid and stand the test of time where american companies fold like houses of cards right an left. It’s like we’re rebellious teenagers who want everything and don’t have to sacrafice for it. God I can’t wait to be proud to be an american again..what we’re doing to our poor is utterly amoral and totally shameful.. just not fitting of One Nation Under God at all…

  • Leonidas

    God I can’t wait to be proud to be an american again..what we’re doing to our poor is utterly amoral and totally shameful.. just not fitting of One Nation Under God at all…

    Now there is an idea, lets go back to the healthcare of the founding fathers and personal responsibility. Back when concern with the poor depended on individual charity rather than picking your neighbor’s pocket. If you want to help the poor no one is stopping you from giving of your own money, something liberals seem to fall behind at. Conservatives Have Answered Obama’s CallOn the other hand, the data show that liberals need a nudge to give.http://online.wsj.com/article/SB123258358706104

    People who called themselves “conservative” or “very conservative” made up 42% of the population surveyed, but gave 56% of the total charitable donations. In contrast, “liberal” or “very liberal” respondents were 29% of those polled but gave just 7% of donations.These disparities were not due to differences in income. People who said they were “very conservative” gave 4.5% of their income to charity, on average; “conservatives” gave 3.6%; “moderates” gave 3%; “liberals” gave 1.5%; and “very liberal” folks gave 1.2%.

    Maybe liberals should stop their demagoguery and dig into their own wallets. Giving is much more rewarding than stealing.

    • vey9

      “Now there is an idea, lets go back to the healthcare of the founding fathers and personal responsibility.”

      You die first.

    • Rambie

      Leonidas: “Now there is an idea, lets go back to the healthcare of the founding fathers and personal responsibility.”

      Talk about rose-colored-glasses.

      I’m sure taking our health care system back to leeches and bleedings would be a sure cost saver! Talk about a job creator, with the increase mortality rates you’d need to replace workers more often

  • tidbits

    Mandating how families “must” spend their income is objectionable on principle. To those who do not object on principle to this government imposition, it is also a poorly disguised tax. The approach is ” we won’t raise your taxes, but we will force you to spend $15,000 a year or so whether you want to or not.” This false “non-tax” that is a tax will fall most heavily and disproportionately on the middle class ($80,000 to $200,000) income bracket as a percentage of income.

    Employers are likely to respond to these requirements by subsidizing health insurance for employees only to the government minimum, leaving more to be paid by the individual employee, i.e. the “non-tax” tax increases. And, the actual 35% tax on insurance company premiums over the government inposed limit will be passed on to consumers, further increasing the “non-tax” tax.

    This plan may not cost the governement much, but it will cost consumers and middle class wage earners a bundle. Speaking only for myself, I’d find a pure single payer, national health plan more palatable than what is currently being proposed. The plan currently being considered strikes me as the worst of all worlds, and don’t even get me started on the absence of serious health care cost controls.

  • Silhouette

    Look pal, infrastructure is infrastructure. You stop stealing from me to pave your roads and put out your fires and I’ll not “steal” from you to prop up the health of the backbone of this country: the 50 million uninsured and countless other millions who are screw-insured and going bankrupt. You did remember that 2/3 of all bankruptcies are traced to health care costs? Oh, and epidemic bankruptcies somehow don’t affect infrastructure? Did you fail math in gradeschool? What you and your ilk are proposing is like a death sentence to this country..and ultimately to yourselves. Since your greed has blinded you to the point of insanity, The People are stepping in to lend you a hand. There, there’s my alms for the poor right there…lol..

  • DLS

    ” you can keep your current plan under Obama’s plan”

    That’s if you can still keep it at all — that you aren’t dropped from the plan or that it is out of business.

    The same is obviously true with keeping your current doctor, of course.

    But things like this are neglected as we see many people stooping to ever lower lows out of desperation, frustration, rage at seeing the health care silliness get interrupted. (No wonder we still are seeing a sign of pathology that I suspected we’d see, new threads even today, here and now, about Joe Wilson, etc.)

    Meanwhile, a voice of reason in the Detroit metro media notes that paying for the new health care plan is going to involve — surprise — taxes — obviously. [sigh]

    “He did offer one useful insight. Sachs said there’s no way Obama can pay for his health care plan by cutting waste from the system. Won’t happen, he said. The only way to fund universal health care is with a tax hike, he said.

    Sachs chided Obama for promising not to raise middle-class taxes, saying that has to happen if America is going to combat global warming and provide everyone with a health care card.”

    http://apps.detnews.com/apps/blogs/nolanfinleyblog/index.php

  • DLS

    “Mandating how families ‘must’ spend their income is objectionable on principle.”

    Or what they must drive, or what they must eat, or what they must think…

    But that’s only the part of the iceberg that’s visible, above the water.

    For after all, we’re writing about more controls on how people will be _allowed_ to spend money.

    As if it’s the government’s, and we should be viewed as children given an allowance by parental government, the way so many people creepily view government and how we “should” relate to it.

  • DLS

    “Did you catch that little item they slipped in there? A tax of 35% on plans costing more than 8k in premiums.”

    Oh, yes. I remarked as well that it’s, ahem, ironic (hypocritical) given so many wanting things like this want lavish, comprehensive, all-preventive-care-included minimum health care “packages” for everyone at the same time. They say people “overuse” the expensive plans, but insist on generous packages at the same time. (I guess they are once more exploiting those who cannot manage to notice such obvious things. [sigh])

    “What I see coming down the pike is Part ‘D’ Heavy.”

    Naturally! While Obama and others lied about the need and the intent to reform entitlements, including Medicare, eliminating the “doughnut hole” at the very least will be part of some future “reform” measure (which will be accompanied by hosannahs and worshipful gestures of various kinds by the exploitable).

  • DLS

    “No one knows how high it can go without crashing”

    When we face an impending debt trap, or some time before that, is when there will be a temptation to monetize it by inflation, or default effectively on the debt (including playing games with inflation indexed bonds). Aside from that, the temptation by Santa Claus Demmies is likely already present, and waiting until it’s a more propitious time, for them to supply the real opiate of the masses, a deliberate policy of inflation. (They will revive the “just enough to be a lubricant” rhetoric to accompany lib-Dem “ignore the deficit and debt myths and fake scares” mantras, and will claim their excess inflation levels are “within reason,” even if they resort to price controls and other devices as well to curb the worst consequences.)

  • DLS

    “I’m sure taking our health care system back to leeches and bleedings would be a sure cost saver!”

    Reduction to absurdity (actually, not, but impracticality, in fact) doesn’t require being fancy; “just end Medicare and Medicaid and all other government health programs, and cost savings for government will be at their greatest, immediately” is all one has to say.

    But of course, the real problem is excess and misconduct and other problems related to doing too much of the wrong things, not “not enough” [sic].

  • Silhouette

    Apples and oranges. We’re not talking about introducing some fluffy perk for the lazy masses, we’re talking about covering a vital part of our infrastructure that even all these republicans posting on this thread and elsewhere spamming the boards across the net on behalf of the astoturf drive funded by MedMob. I-N-F-R-A-S-T-R-U-C-T-U-R-E. That’s what this public option is about. It’s saying “hey, if you’re community cannot afford to build and maintain roads, Uncle Sam will pick up the slack. The GOP cares more about the rubber under its cars than it does the baker who makes their bread every morning.

    Public health care, fire care, police care are all parts of our INFRASTRUCTURE that need propping by a Central Unit that is fiscally solvent during good times and bad. The GOP asking us to forego the public option is like them asking us to deregulate the police departments! Yes, the crumbling of our tax base due to health bankruptcies has risen to that level of alarm…We’re talking a NATIONAL SECURITY ISSUE here folks…

  • Davebo

    “People who called themselves “conservative” or “very conservative” made up 42% of the population surveyed, but gave 56% of the total charitable donations.”

    Take out tithing to churches and rerun those numbers. I think you’ll be suprised

  • DLS

    “Apples and oranges”

    Yes, you correctly, if unwittingly annunciated your posting…

    “a vital part of our infrastructure”

    Public ownership and operation of clinics and hospitals would make you correct. Extending federal control and provision to health care itself obviously is not “infrastructure” [sic], just as the extremists who call in to NPR talk shows and nitwit extremist left AM shows are wrong when they refer to banks (or Julienne Malveaux merely to ATMs) as “public utilities” [sic]. It’s a myth that everything is or should be public, “infrastructure” [sic], or “utilities” [sic], etc..

    “need propping by a Central Unit”

    Risible — government is so often the worst case of Too Big to Succeed. Decentralization is superior.

  • DLS

    “Part ‘D’ Heavy”

    [chuckle] AmFlight (health care) Heavy, the jumbo jet the Dems can’t design yet to get it to fly…

  • Leonidas

    Take out tithing to churches and rerun those numbers. I think you’ll be suprised

    Why? You realize all the services for the poor that churches run? Just look at catholic hospitals and clinics for starters. No whats surprising is the audacity of liberals to to claim conservatives don’t care about the poor while they themselves are tightwads and only want to spend the money of others. Of course individuals liberals may be quite generous but on average they make scrouge look like Carnegie. 1.2% indeed. *scoff*

    Stop your whining and dig deeper in your own pocket if you want to be taken seriously and not as hypocrites.

  • redbus

    I’m not sure what the answer is. For those who could afford insurance now, but choose not to get any through their employer, they’ll show up at the emergency room expecting treatment. Bottom line? The cost is shifted onto those who do have insurance, in the form of higher premiums. On the other hand, how do you require everyone to have insurance? That definitely seems intrusive, though I understand Massachusetts already does this. But how do you call a 35% tax “reform”? My employer is barely affording insurance premiums now as it is! Maybe this is a thinly-veiled way to eventually force the single-payer option?

  • DdW

    Since so many are posting links, here are a couple:

    http://www.youtube.com/watch?v=G4TsaHmtgfA

    Watch other at http://www.sickforprofit.com

    Just a different viewpoint. You be the judge

  • DLS

    “Maybe this is a thinly-veiled way to eventually force the single-payer option?”

    Rather than a veil, it (crowding out the private sector; getting everyone used to paying “charges”) has effectively been transparent and accompanied by blazing neon signs or beacons and alarms or horns.

    [shrug] The most susceptible will continue to believe it is all innocuous, instead.

  • Cybercorrespondent

    For once, Obama is right- Watch video
    http://www.newsmaxstore.com/contribute/lav/video.htm
    The public option, stimulus for the politically connected, and green jobs are only some of the tools Obama is using to carry out his master plan. People and businesses have figured out what his plan is and are scared to death of him. You can find more information on my website.
    Cybercorrespondent
    http://cybercorrespondent.blogspot.com

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