roosting chickens or "change we can believe in"? - PeachParts Mercedes-Benz Forum

LUVMBDiesels · #1 11-24-2009, 05:53 AM

here is an article from the NYT that shows how the Senate's plan to go after "Cadillac" healthcare plans is going to cost people like school teachers and other unions that have negotiated great coverage for their members. Funny now they are up in arms about the taxes associated with "Universal" health care, but they were the ones who supported the President in every thing he has done so far...

Health Reform - Is Tax on 'Cadillac' Plans Fair? - NYTimes.com@import url(http://graphics8.nytimes.com/css/article/screen/health/print.css); November 23, 2009

Health Reform: Is Tax on 'Cadillac' Plans Fair?

By THE ASSOCIATED PRESS
Filed at 4:38 p.m. ET

Schoolteacher Kinzi Blair makes only $46,000 a year, but she has what many would consider a ''Cadillac'' health plan, now targeted for a big tax increase by health reformers.
She has $10 copays and no deductible. She gets generic prescription drugs for $10. Her plan covers mental health acupuncture. It covers speech therapy for preschoolers and in vitro fertilization. counseling, organ transplants,
Sound pretty good?
It surely must to millions of Americans who pay high deductibles, hundreds of dollars for prescription drugs or who have no insurance at all. Blair's circumstance illustrates the debate over taxes and fairness when it comes to health reform.
''For me, it's security,'' Blair says. ''I'm thankful I'm in a job where there is health insurance.''
Taxing plans like hers is unfair, says Blair, a kindergarten teacher in San Jose, Calif. Like 57 percent of Americans surveyed in a recent Associated Press poll, she favors a new income tax on wealthy Americans, which the House would impose in its bill to pay for expanding insurance coverage to millions.
But the Senate takes a different approach, including an unprecedented tax on the health insurance of people like Blair. The Senate plan would also increase the Medicare cosmetic surgery. payroll tax for high-income Americans and tax elective
The tax on high-dollar health plans would hit only a few very wealthy Americans and many more in the middle class, experts agree. But it also might bring down health care costs by discouraging companies from offering coverage with so many benefits.
Whatever method is chosen to pay for health reform, Congress and President Barack Obama must persuade Americans about its fairness. When it comes to taxes, Americans are hard to convince.
The Senate Democrats' bill, unveiled last week, would impose a 40 percent tax on insurance premiums above $8,500 for an individual and $23,000 for a family. Those thresholds represent the total paid by both employer and employee.
Blair's premiums cost $11,000 so her insurance company would be taxed 40 percent of the premium that exceeds $8,500 -- a total tax of $1,000.
The Senate bill also would increase the Medicare payroll tax to 1.95 percent on income over $200,000 a year for individuals and $250,000 for couples.
Most Americans don't know whether the tax on health plan premiums would hit them or not, says John Desser, a health policy adviser to John McCain during his presidential campaigns who now coordinates public policy for eHealth Inc., an online marketer of health insurance.
''I don't think most American have any idea what the cost of their premiums is. And I don't think most Americans know that the cost of their insurance could go up as a result of this legislation because we're making it more fair for people who have been treated unfairly in this system,'' Desser says.
The idea is that taxing high-cost health plans would discourage unnecessary health spending and pay for reform out of the health care system itself.
Blair's health plan would be taxed under the Cadillac tax proposal. Here's how her plan stacks up with an average one:
Blair's annual premium (paid entirely by her employer): $11,000.
Average U.S. premium for employer-sponsored individual plans (usually split between worker and employer): $4,824.
Blair's annual deductible: $0.
Average U.S. deductible for HMO plans: $699.
Blair's office visit copay: $10.
Average U.S. copay: $20.
The numbers cited above for employer-sponsored plans don't reflect people who buy their own health insurance. They usually buy plans with high deductibles, around $2,000, and low monthly premiums -- that's the only way many people whose employers don't provide health benefits can afford insurance at all.
Many Americans never think about the fact that health insurance premiums are now tax-free by law. Employers don't pay taxes on what they contribute, nor do workers pay taxes on their portion of premiums. And self-employed workers can take a deduction for their premiums.
Tax-exempt health insurance is an accident of history. During World War II, the government froze wages, so employers lured workers with health benefits. Employers' contributions were made tax exempt. Congress later made sure the tax exemption became law.
The system has led to ''bloated'' health benefits for some with coverage for ''in vitro fertilization, marriage counseling and acupuncture,'' says economist John Goodman of the National Center for Policy Analysis. The Dallas-based conservative think tank favors private solutions over government involvement.
Taxing wealthy Americans to pay for health care -- as the House bill would do -- is bad for the economy, Goodman said, because it would take money out of the system that could be used to invest in growing businesses.
Goodman doesn't like the Senate's proposed tax, either. He'd rather give everyone the same lump sum tax credit for core health insurance, as John McCain proposed when he was running for president, and let people use their taxed income to buy more insurance if they chose.
''The big mistake that Obama made in all of this is not explaining that we have a big mess on our hands and we ought to solve it in a way that, as much as possible, treats everybody the same,'' Goodman says.
One of the arguments for the Cadillac tax is that companies would spend their money to pay higher wages instead of providing rich benefits. Or so the thinking goes.
''The notion that there will be a corresponding increase in wages? You walk into a teachers' lounge or a break room in a factory and say that, you get laughed out of there. Maybe they'd chase you out of there,'' says Rep. Joe Courtney, D-Conn.
The House bill includes a 5.4 percent tax on individuals making more than $500,000 and families making more than $1 million. Courtney says that's the fair way to pay for reform.

LUVMBDiesels · #2 11-24-2009, 05:54 AM

...

''This is a slice of American society that has gotten a very good ride over the past 10 years,'' Courtney said.
Higher health insurance premiums in the Northeast have made many of Courtney's constituents potentially subject to the Cadillac tax. The Senate Finance proposal adjusts for some regional differences, but the adjustment is ''feeble'' and expires too soon, Courtney said. And he doesn't think a higher threshold for firefighters and others in risky jobs is high enough.
Losers would include small businesses and companies with older workers, says Paul Fronstin, director of health research for the nonpartisan Employee Benefit Research Institute. Small businesses lack purchasing power and older workers drive up the cost of health premiums.
But the Cadillac tax does raise revenue, Fronstin says, ''and it has to come from someplace if you want to pay for health reform.''
Tax analysts for Congress say the 40 percent tax on very generous health plans likely would be passed on to consumers, in Blair's case raising her annual premiums by $1,000.
Or perhaps her benefits would be cut instead and she'd have a higher deductible and higher copays. She recently spent $50 on an emergency room copay after she sprained her ankle slipping in the dark on a phone book that had been delivered to her porch.
Blair was grateful then she had insurance. The ankle sprain reminded her what it was like to be uninsured when she was a preschool teacher in her 20s. She was afraid to go inline skating with friends back then.
''Is it going to get to the same point where I'm worried I can't go to the emergency room?'' she says about rising premiums and copays.
She says she doesn't know the answers or what lawmakers should do. Is it possible to rebuild a health insurance system without some degree of tax unfairness? Or is somebody going to get hurt, no matter what, so that uninsured people, like she once was, can get coverage?
''It's definitely a fairness issue,'' she says.

What did you think? That "Universal" health care meant FREE Health care?
Let's see what happens when the unions mobilize against this (if they have time to do so...)

Txjake · #3 11-24-2009, 08:40 AM

Yep, I wonder how people think all that hope & change is now?

dynalow · #4 11-24-2009, 08:48 AM

Quote:

Originally Posted by Txjake

Yep, I wonder how people think all that hope & change is now?

How about the younger generation????.....you know, the ones that will subsidize the old goats. Whay say ye, all you 20 somethings???

Health 'reform' that burdens our young
By Robert J. Samuelson
Monday, November 23, 2009

One of our long-running political stories is the economic assault on the young by the old. We have become a society that invests in its past and disfavors the future. This makes no sense for the nation, but as politics it makes complete sense. The elderly and near elderly are better organized, focus obsessively on their government benefits and seem deserving. Grandmas and Grandpas command sympathy.

Everyone knows that the resulting "entitlements" dominate government spending and squeeze education, research, defense and almost everything else. In fiscal 2008 -- the last "normal" year before the economic crisis -- Social Security, Medicare and Medicaid (programs wholly or primarily dedicated to the elderly) totaled $1.3 trillion, 43 percent of federal spending and more than twice military spending. Because workers, not retirees, are the primary taxpayers, this spending involves huge transfers to the old.

Now comes the House-passed health-care "reform" bill that, amazingly, would extract more subsidies from the young. It mandates that health insurance premiums for older Americans be no more than twice the level of that for younger Americans. That's much less than the actual health spending gap between young and old. Spending for those age 60 to 64 is four to five times greater than those 18 to 24. So, the young would overpay for insurance that -- under the House bill -- people must buy: Twenty- and thirtysomethings would subsidize premiums for fifty-and sixtysomethings. (Those 65 and over receive Medicare.)

Not surprisingly, the 40-million-member AARP, the major lobby for Americans over 50, was a big force behind this provision. AARP's cynicism is breathtaking. On one hand, it sponsors a high-minded campaign called "Divided We Fail" and runs sentimental TV ads featuring children pleading for a better tomorrow. "Join us in championing your future and the future of every generation," ended one ad.

Meanwhile, AARP lobbyists scramble to shift their members' costs onto younger generations. For example, the House health legislation improves Medicare's drug benefit. That would help the half of AARP members who are over 65. The other half, those between 50 and 64, could benefit from the skewed insurance premiums.

Although premium changes would apply mainly to people using insurance "exchanges," the differences would be substantial. A single person 55 to 64 might save $3,490, estimates an Urban Institute study. By contrast, single people in their 20s and early 30s might pay about $600 to $1,100 more. For the young, the extra cost might be larger, says economist Diana Furchtgott-Roth of the Hudson Institute, because the House bill would require them to purchase fairly generous insurance plans rather than cheaper catastrophic coverage that might better suit their needs.

Whatever the added burden, it would darken the young's already poor economic prospects. Unemployment among 16- to 24-year-olds is 19 percent. Peter Orszag, director of the Office of Management and Budget, notes on his blog that high joblessness depresses young workers' wages and that the adverse effect -- though diminishing -- "is still statistically significant 15 years later." Lost wages over 20 years could total $100,000. Orszag doesn't mention that health-care "reform" might compound the loss.

AARP justifies the cost-shifting as preventing age discrimination. Premiums based on age should be no more acceptable than premiums based on medical expenses reflecting race, gender or preexisting health conditions, it says. The House legislation bans those, so it should also ban age-based rates. AARP dislikes even the 2-to-1 limit. It thinks premiums for someone 22 and someone 62 should be identical. (In insurance jargon, that would be full "community rating.")

This is unconvincing. All insurance aims to protect against risk -- but within groups facing similar risks. Put differently, most insurance is risk-adjusted. Auto insurance premiums vary by age; younger drivers pay higher rates because they have more accidents. Homeowners' policies for similar houses cost more in high-crime areas. This is not "discrimination"; it's a reflection of risk and cost differences. Insurers that ignored these differences would soon vanish because they'd suffer heavy losses and lose customers.

On health insurance, we may choose to override some risk adjustments (say, for preexisting medical conditions) for public policy reasons. But the case for making age one of these exceptions is weak. Working Americans -- the young and middle-aged -- already pay a huge part of the health costs of the elderly through Medicare and Medicaid. These will grow with an aging population and surging health spending. Either taxes will rise or other public services will fall. Already, all governments spend 2.4 times as much per capita on the elderly as on children, reports Julia Isaacs of the Brookings Institution. Why increase the imbalance?

It's true that premiums for older people would be higher. But this might have a silver lining: Facing their true health costs, older Americans might become more eager to control spending.

http://www.washingtonpost.com/wp-dyn/content/article/2009/11/22/AR2009112201237.html?wpisrc=newsletter&wpisrc=newsletter&wpisrc=newsletter

#5 11-24-2009, 08:55 AM

The politics make sense. A fairly small percentage of U.S. workers belong to unions (getting smaller every day). These groups have better than average health care provided on a before tax basis, essentially untaxed income. Most people have less generous coverage. People who buy their own insurance normally have to use post-tax money. It probably makes sense to have everyone use post-tax money to buy health insurance; which would probably end up costing me a couple $1000 per year.

#6 11-24-2009, 09:03 AM

Regarding the geezers, I think it's necessary that both SS and medicare eligibility ages be increased significantly. The current "retirement" ages are much too low to be sustainable.

I also do not see much advantage in cost shifting from geezers to younger people, that is not going to grow the economy.

JollyRoger · #7 11-24-2009, 11:09 AM

Quote:

Originally Posted by Txjake

Yep, I wonder how people think all that hope & change is now?

This was offered as an alternative to taxing the rich. Are you now in favor of that?

The truth is, you are in favor of nothing. Here you guys are, arguing the opposing points of the plan as if you have some sort of stake in which financing device ultimately becomes law. Since the current stance of right wing America is to be against everything, why should you care one way or another? Since running away is your choice, this has become a thing for Democrats to decide, please step aside while we clean up the utter mess you people left this world in. Since we are a lot better at compromise, I am sure in the end an equitable financing method will be chosen, preferably on the backs of the SOBs who robbed this country into penury with their phony "tax cuts" which was nothing more than a huge wealth transfer based on deficit borrowing.

JollyRoger · #8 11-24-2009, 11:14 AM

Quote:

Originally Posted by Craig

Regarding the geezers, I think it's necessary that both SS and medicare eligibility ages be increased significantly. The current "retirement" ages are much too low to be sustainable.

I also do not see much advantage in cost shifting from geezers to younger people, that is not going to grow the economy.

That and a means test for SS would solve a lot of problems. Sending Wall Street robber barons who retire with millions of money robbed from the rest of us a check every month makes one think of vomit.

#9 11-24-2009, 11:22 AM

Quote:

Originally Posted by JollyRoger

That and a means test for SS would solve a lot of problems. Sending Wall Street robber barons who retire with millions of money robbed from the rest of us a check every month makes one think of vomit.

I would set the means testing much lower.

LUVMBDiesels · #10 11-24-2009, 11:59 AM

Good luck getting AARP to agree to means testing.

" I pay into SS for 50 years how dare you deny me the money I put into the system... "

As for health care, all this reform makes me sick... Why not go after the real things that need reforming. I have repeated them 100 times but "here he goes again" to paraphrase RR...

1) Working conditions in the hospitals for nurses are worse than a WV coal mine -- fix it

2) Schedules for nurses and interns/residents have got to be made better

3) End the crazy malpractice suit payoffs (tort reform)

4) End pre-existing conditions

5) Allow for INTERSTATE competition among insurance companies

6) End the system of having insurance pools made up of each employer's employees. Make the pool the entire base of the INSURANCE COMPANY's clients and spread the costs there. I would be interested in seeing how an individual's costs would be if the insurance pool went from say 55 people to 550,000...

7) Make insurance portable. Since it will no longer be tied to an employer's pool, you can shop for coverage that best suits YOU and take it with you...

... then you can remove the employer contribution and make health insurance similar to auto insurance.

And it did not take me 2000 pages to write this...

daveuz · #11 11-24-2009, 02:11 PM

Quote:

Originally Posted by LUVMBDiesels

Good luck getting AARP to agree to means testing.

" I pay into SS for 50 years how dare you deny me the money I put into the system... "

As for health care, all this reform makes me sick... Why not go after the real things that need reforming. I have repeated them 100 times but "here he goes again" to paraphrase RR...

And it did not take me 2000 pages to write this...

"By now, the full draft of Reid's bill that had circulated in the corridors and landed so prominently on Republican desks has been published in the Congressional Record in the official and conventional manner.
The type is small and tight. No hernias will be caused by moving this rendering of the bill around. Unfurling it on the Capitol steps would not be much of a spectacle.
It's 209 pages." http://www.rr.com/news/topic/article/rr/9000/9591538/SPIN_METER_Legislation_inflation_grips_GOP

JollyRoger · #12 11-24-2009, 03:15 PM

Quote:

Originally Posted by Craig

I would set the means testing much lower.

Perhaps the real solution is for SS to kick in when an individual runs out of other assets. It was originally meant to be an insurance program, not a pension, that would seem more appropriate to me.

#13 11-24-2009, 03:23 PM

Quote:

Originally Posted by JollyRoger

Perhaps the real solution is for SS to kick in when an individual runs out of other assets. It was originally meant to be an insurance program, not a pension, that would seem more appropriate to me.

That might work, but it wouldn't provide much incentive for saving unless the benifits were pretty small.

732002 · #14 11-25-2009, 10:12 AM

Quote:

Originally Posted by Craig

That might work, but it wouldn't provide much incentive for saving unless the benifits were pretty small.

I agree, Why should I be punished for good behavior. Paying off our
house, wife and I both maxing out 401Ks. It is very possible for a 401K
to reach $1M per person by age 65-70.

Kind of like FAFSA student aid. If we had spend our money on new cars,
vacations..... we might qualify but since we have assets, saving and
home equity we don't qualify.

I would get rid of the SS wage base $106K. I believe you don't pay SS
on earning above $106K so high incomes end up paying lower percentage.

#15 11-25-2009, 10:25 AM

I think the wage base is somehow tied to the cap in benefits so it might be difficult to change it, but I am concerned about means testing being a disincentive for savings. I'm not a big fan of 401k plans because I don't plan on having a reduced income due to retirement, certainly not by age 65 or 70. Maybe it would be easier to just increase the eligibility age by at least 5 years.