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| Politics Forum Index » Democrats (House) Politics Forum » For those of you insured, White House promotes tax on... |
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| Leroy N. Soetoro... |
 Posted: Mon Nov 02, 2009 9:52 pm |
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http://www.wsws.org/articles/2009/oct2009/heal-o27.shtml
A top White House economic adviser argued Monday that cutting government
health care costs is key to addressing the federal budget deficit, and
that taxing so-called Cadillac health care plans is an essential part of
restructuring the system.
Speaking before the Center for American Progress in Washington D.C.,
Christina Romer, chair of the Council of Economic Advisors, said, “It’s
fiscally irresponsible not to do health-care reform…. To bury our head in
the sand for even one more year and pretend that the problem of rising
government health care expenditures will go away is simply untenable.”
Her remarks highlight the fact that the Obama administration’s view of an
overhaul of the US health care system is based, not on expanding and
improving care for millions of ordinary Americans, but on slashing
government spending and defending the profits of the insurance companies
and pharmaceuticals.
Senate Democrats, in close cooperation with the White House officials, are
working to reconcile health care legislation adopted by two Senate
panels—the finance and health committees—which must then be reconciled
with legislation from the House of Representatives. The Obama
administration has broadly endorsed the Baucus plan, the $900 billion bill
passed by the Finance Committee headed by Max Baucus, Democrat of Montana.
Under the Baucus plan, more than $200 billion would be raised through
taxes on so-called Cadillac plans. These are plans costing more than
$8,000 annually for individuals or $21,000 for a family, which would be
taxed at a 40 percent rate for the coverage exceeding these cut-off
levels.
While touted as a tax aimed at an elite segment of the population, in fact
unionized employees are among the largest holders of such policies. These
plans—which often offer more generous coverage and lower deductibles—have
been gained in bitter contract disputes, often at the expense of wages
increases and other benefits. An estimate by the Congressional Joint
Committee on Taxation calculated 37 percent of family policies and 41
percent of individuals would fall into this category by 2019.
While the taxes on these plans would be levied against the insurance
companies, they would undoubtedly pass the costs on to insured employees
in the form of raised premiums or reductions in coverage.
During his presidential campaign, Obama attacked his Republican opponent,
Senator John McCain, for advocating such a tax, likening it to an indirect
tax on health care benefits received by workers. But the White House is
now energetically promoting it.
Christina Romer stated Monday that the Cadillac tax is “probably the
number one item that health economists across the ideological spectrum
believe is likely to stem the explosion of health care costs.”
She added, “A policy along these lines, designed carefully, will encourage
both employers and employees to be more watchful health care consumers.”
In other words, workers will have to pay more out of pocket for health
care, and therefore will consume less. This will lead to reductions in
treatments and services, along with a general deterioration of medical
care for millions of individuals and families covered by these plans.
“Opt-out” public option
As deliberations continued on the details of health care legislation to be
brought to the full Senate for a vote, Senate Majority Leader Harry Reid
(Democrat, Nevada) announced Monday that he would support an “opt-out”
version of a government-run “public option.”
Under this proposal, a public option would be included in the insurance
exchange where individuals and families would be mandated to purchase
insurance coverage, but state governments could choose not to participate
in the plan.
While the Senate health committee’s bill included a public option, the
Finance Committee instead included health care cooperatives in its version
of legislation. Reid’s pledge to include the “opt-out” version of the
public option makes a mockery of what is already a toothless measure.
At its best, the public option would serve as a dumping ground for those
people without employer-provided coverage who could not afford to purchase
private insurance on the exchange, and it would inevitably provide
substandard benefits. However, even this fig leaf of reform has been
vehemently opposed by the insurance companies, who see any government
intervention into the private insurance market as a threat to their
profits.
There were indications Monday, however, that the Obama administration is
likely to be unwilling to back even the watered-down “opt-out” version of
the public option. The Huffington Post on Saturday cited Democratic
congressional sources who said that Obama is “actively discouraging Senate
Democrats in their effort to include a public insurance option with a
state opt-out clause.”
In its place, the White House is reportedly pushing for an alternative
policy that would see the public option “triggered” if the insurance
industry failed to hold down costs and meet certain as yet undefined
benchmarks. The cosmetic “trigger option” has received some support from
the insurance industry, as the measure would pose little threat that a
government-run plan would ever come into existence.
Senator Olympia Snowe of Maine, the only Republican Finance Committee
member to vote for the Baucus plan, has also indicated she might support
the trigger option. In cynical fashion, the Obama administration has
courted her support for some version of final legislation to lend a veneer
of bipartisanship to the health care overhaul. In any event, Obama and
numerous administration officials have repeatedly stated that the
president is willing to sign legislation that does not include any form of
a government-run option.
The major Congressional versions of health care legislation being debated
in the House and Senate all have common features that will serve to boost
the profits of the health care giants. They each include an individual
mandate, requiring individuals and families to purchase insurance or pay a
penalty. At the same time, there are no restrictions on what private
insurers can charge.
In the interest of remaining “deficit neutral,” the legislation will slash
hundreds of billions of dollars from the Medicare and Medicaid programs
for the poor, elderly and disabled.
The plans also provide limited government subsidies to assist with the
purchase of premiums paid to the private insurers.
While Obama pledged to fight for “universal health care” during his
presidential bid, the health care legislation now being promoted by the
White House would leave an estimated 17 million US residents, including 8
million undocumented immigrants, without health insurance.
Health care industry profits
The health care industry, while historically opposing measures that would
require people to purchase coverage—fearing they would be burdened with
providing coverage to less healthy and less profitable segments of the
population—has entered into the process of revamping the system from the
standpoint of maximizing their profits.
The Los Angeles Times notes, “The first public sign of the industry’s
shifting stance came in November 2006 when the [insurance industry] trade
group came out in favor of universal coverage with its reform plan.”
Insurance lobbyists poured millions of dollars into the health care
“reform” efforts. Senate Finance Committee Chairman Max Baucus raked in
nearly $1.5 million in 2007-2008 from lobbies representing hospitals,
insurers, pharmaceuticals and other health care interests. According to
the Center for Responsive Politics, members of the House “Blue Dog”
coalition have received nearly $3 million from the insurance industry
since 2006.
Representatives of America’s Health Insurance Plans (AHIP), the industry
group, have been invited to the White House to consult with top Obama
administration officials. AHIP top lobbyist Karen Ignagni and other
industry figures have testified before Congress, and have shot off
numerous studies and reports to congressional offices to oppose measures
considered unfavorable to the insurance companies’ bottom line.
The result is a plan supported by the White House and congressional
Democrats that will provide the health industry with millions of cash-
paying customers, will not restrict prices charged for premiums, and is
highly likely to bar any effective government-run public option.
The LA Times writes, “As President Obama’s push for a health care overhaul
moves toward its final act, the oft-vilified health insurance industry is
on the verge of seeing a plan that largely protects its financial
interests.”
In advance of the enactment of new health care legislation, the insurance
industry is jacking up premiums, particularly for small businesses, which
employ about 40 percent of the private workforce. The New York Times
reports that small businesses are seeing premiums rise on average about 15
percent for the coming year, double the rate of the previous year. “That
would mean an annual premium that was $4,500 per employee in 2008 and
$4,800 this year would rise of $5,500 in 2010,” according to the Times.
Insurance companies are under continual pressure from Wall Street to raise
premiums to boost profits. The Times quotes Michael A. Turpin, a former
senior executive for the insurer UnitedHealth, who says insurers are now
“under so much pressure to post earnings they’re going to make hay while
the sun is shining.”
--
Nancy Pelosi, Democrat criminal, accessory before and after the fact to
Rangel's tax evasion. |
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