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Health Care for America Now has a new set of TV and print ads out today. They focus on the issue I discussed yesterday – the Finance Committee’s ill-conceived “excise tax” or “Cadillac” tax:
The idea for the “Cadillac” tax or “excise” tax is based on the false notion, common in health policy circles, that if only people in America felt the cost of their health insurance in their wallets, they would use less health care and thus lower costs for everyone. Proposals eliminating or adjusting the tax exemption people get for health care at work (the cost of your health plan through work is not taxed as income, as other benefits often are) aim to correct this “problem” and tax people with “gold-plated” or “Cadillac” health care plans – supposedly richer than the average family – who are spending beyond what’s necessary.
Policy wonks also love this idea because it raises a ton of money, helping pay for health reform. Policy wonks miss what America gets.
The cost of your health care plan is not directly related to your income. Plenty of people who make solidly middle-class wages have “Cadillac” health care plans. Why? Their union may have negotiated a better plan for them, or they may have taken the job specifically for the benefits. Either way, as the CWA report makes clear, a “Cadillac” tax does not just affect the rich. Under the Senate Finance proposal, 40% of health care plans in this country would be eventually taxed.
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All this begs the question: Why tax the very people health care reform is supposed to help to pay for it?
The middle class doesn’t need another tax hike. Health reform should indeed be paid for, but it should be paid for by those in society who can most afford it. And indeed, that idea is popular. Most Americans support paying for health care reform by increasing the surtax [pdf] on those households making more than $350,000 per year.
Here’s the TV ad:
There’s a right way and a wrong way to pay for health care. Raising taxes on the middle class is definitely the wrong way.
(also posted at the NOW! blog)
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16 Comments
Here’s a link to that polling: http://hcfan.3cdn.net/52c826151b17aab455_ezm6bxf04.pdf
bullshit. stupid policy wonks may love it, but none of the ones i read do. you’re just reading the wrong ones.
don’t know. we can provide comprehensive universal healthcare to every person in america. and that’s first dollar coverage – no deductibles, no copays, no coinsurance for about what we pay right now in total national healthcare expenditures. no increase in cost is necessary.
so, you’ll have to ask the folks who want to increase our total national healthcare expenditures and impose taxes to pay for it. which btw, includes the people who support obama’s plan to impose individual mandates on the middle class. that’s a big fucking tax hike too.
oops. that would be you.
eh, individual mandates do not have to be a tax hike if insurance is affordable. If done wrong, then I’m with you, it’s the wrong way to go.
what’s the dollar amount on your idea of affordable? serious question.
The caps in the House bill and the HELP bill get pretty close to that number, though they’re expressed as a sliding scale of percentage of income, so it’s hard to describe in words. But basically about 1% of income for those at the federal poverty level up to about 8-10% of income at 400% of the poverty level.
well then, for those who are affected, that’s a 1% tax on those at the federal poverty level and up to 8-10% tax for those at 4x the poverty level. alternatively the tax is whatever the penalty for noncompliance is.
that’s a tax. you may call it affordable (i disagree), but it’s still a tax and if i understand correctly it will be enforced by the irs.
p.s. thanks for the reply.
No, it’s not a tax, because that’s lower than the level most pay for health care right now. So I’m not sure how it’s a tax…
As for your above question, it’s a good one. I’d also throw in ideology. The people at the top are often fairly right wing personally, and that’ll lead them to lead their businesses and take positions in the certain way.
it’s a tax to the people affected by the mandate — people who don’t now buy health insurance, or who might choose not to buy health insurance in the future. as much as a 10% income tax to a middle class person for the premiums alone, if i understand correctly.
p.s. lower than the level most people pay for healthcare? what do you mean by that (and what’s the data to back that up)?
additional thought on taxes….
since obamacare can be expect to increase the cost of insurance generally (due to community rating, guaranteed issue, etc — good things, but they do have a cost) that can also be considered a tax.
People who don’t by health insurance now don’t spend $0 on health care costs. So when you average it out, there’s a good chance it comes out even.
right way to pay for health care
I have a question, somewhat tangential to this topic but clearly related, that I haven’t seen tackled directly here or anywhere: Why isn’t corporate America supporting single-payer health insurance?
The trade off for employers would be health insurance costs for higher taxes. Despite the T-word, businesses would, contra Reagonomics, save money. Obviously, that means every US business that’s not in the health insurance sector.
The closest I’ve come to an answer to this was from CNBC where one of the parrots claimed that corporate America is afraid that if they support single-payer and the destruction of the health insurance biz, there’s no reason to believe that their industry would be safe from future government intervention.
That’s not satisfying for a variety of reasons, but maybe someone here has a better explanation.
I think corporate America isn’t clear on how much money they’d save. Also, their health insurance fringe benefits create a barrier to employee turnover that they like.
Jason, I was glad to see HCAN come out for progressive taxation to finance the program.
financing by healthcare by premium cost is not progressive. a graduated payroll tax would be (as is the surtax portion) but not premiums and not a flax tax on employers.
That’s right, it’s not. We prefer to pay for health care by taxing the rich.