Kaiser Health News: Obama Backs 'Cadillac Tax' In Final Health Bill (pop the champagne!)

[Bluebear]

President Barack Obama "told House Democratic leaders at a meeting on Wednesday that they should include a tax on high-priced insurance policies favored by the Senate in the final version of far-reaching health care legislation, aides said," The New York Times reports. "The White House has long expressed a preference for the excise tax on high-cost plans, which health economists say could be an important tool in controlling long-term health care spending for the government and for individuals and families. But House Democrats have resisted the idea, which is also strongly opposed by many organized labor groups — an important part of the party's base — because the tax may hit a number of more generous union-sponsored health plans"

The Associated Press: "House Democrats want to raise income taxes on high-income individuals instead but recognize that they will have to bend on that and other issues so that Senate majority leader Harry Reid can maintain his fragile 60-vote majority support for the bill. ... The House wants to increase income taxes on individuals making more than $500,000 and couples over $1 million, which would raise $460 billion over 10 years to pay for the bill. The Senate wants to tax insurance companies on plans valued at over $8,500 for individuals and $23,000 for couples, raising $150 billion. ... In the end the House likely will have to accept the insurance plan tax at some level — say starting with plans valued at $25,000 or more, with carve-outs for certain union professions — but it might not happen without a fight" (Werner, 1/7).

The Washington Post reports that "skeptics continue to raise questions about who would be hit hardest and whether health-care spending would be limited as much as proponents say" if the tax is implemented. "Health analysts recently questioned the assumption that the tax would target only the most lavish insurance packages, nicknamed 'Cadillac plans.' The analysts, writing in the journal Health Affairs, found that some less-generous plans could be taxed because they are costly for other reasons. The location of an employer and the type of industry, for example, have as much to do with the cost of plans as the generosity of the benefits and the kind of plan. Smaller businesses, especially those with a preponderance of older workers, tend to have higher premiums, as do certain industries, including the health-care sector" (MacGillis, 12/7).

Los Angeles Times: "Wednesday's meeting, the second in two days, was part of a White House effort to take a more active role in healthcare negotiations as they reach their final stage. … A Senate aide who requested anonymity because he was not authorized to discuss the closed-door meetings said that the White House had signaled it would 'convene and run' meetings from now on as lawmakers strive to reach a consensus, reflecting a 'significant uptick' in the Obama administration's involvement. The Democratic leadership welcomes a more hands-on White House, as Obama's imprimatur could provide political cover to members casting a tough vote in an election year" (Nicholas, 1/7).
http://www.kaiserhealthnews.org/Daily-Reports/2010/January/07/Cadillac-Tax.aspx

[berni_mccoy]

1. Because it's a tax on the Insurance Company.

[Xithras]

6. Read the Senate bill. It's an excise tax, designed to be passed on to the buyer.

It's no different than the excise taxes you pay for a new car or on your phone bill. They'll tell you that the cost is $X, but when you actually write the check, it's for $X plus Y% because of the excise taxes and fees. It's a government tax that is collected by the seller.

This meme that it's an "insurance company" tax is bull, and is being perpetuated by people hoping that the average person doesn't "get" how taxes work.

[grantcart]

20. link please

I have seen nothing that indicates that the tax will be added back to the buyer, in most cases both the employer and employee.

[Xithras]

31. Here you go. Links and irrefutable evidence! Buyers will pay the tax, not the ins co's.

A quick Google turned up these three, and dozens more...

http://www.nytimes.com/2010/01/07/health/policy/07health.html

http://tpmdc.talkingpointsmemo.com/2010/01/pelosi-wants-excise-tax-stripped-from-senate-bill.php

http://www.apwu.org/news/webart/2009/09-143-fehb_hcreform-091208.htm


Or there's the text of the Senate bill itself. Well, truthfully, we don't even need to excerpt the text. The title of that section says it all. Taken from page 1979 of the Senate bill:

TITLE IX - REVENUE PROVISIONS
Subtitle A - Revenue Offset Provisions
Sec. 9001. Excise Tax On High Cost Employer Sponsored Health Coverage.

It's an excise tax. If you don't know what an excise tax is, it's pretty simple and the definition has been unchanged for centuries. It's a tax, charged by the government, and collected by a service provider. An excise tax and a sales tax are essentially the same thing, except that excise taxes are targeted and only apply once within the lifetime of the item being sold (where sales taxes generally apply to ALL goods being sold, and can be applied multiple times if an item is resold). It's an extremely regressive form of taxation. If you want to see an excise tax in action, just look at your phone bill. The government has placed several excise taxes on phone service. Those taxes are simply passed along to you, and you pay them over and above your base billing rate.

The taxes will be COLLECTED by the healthcare companies, but they will be PAID by the buyers.

[Zhade]

42. Er, do you even understand the definition of "excise tax"?

NT!

[grantcart]

55. No I don't that is why I asked the question

Do you understand the definition of "ass"?


NT!!

[doc03]

22. Do you really think the insurance companies will pay

that tax, if you do I have a bridge for sale.

[Kansas Wyatt]

35. Tax on UNION Health & Welfare Benefits.

Seriously HARMS union members.

[dmosh42]

54. Obama has to protect his rich buddies......

I wouldn't be surprised if he didn't sign for an extension of Bush's tax cuts for the wealthy.

[FrenchieCat]

2. whoooo!

Facts:
The current senate plan taxes cadillac plans starting at $23,000 for families
($26,000 for the over 55 workers and those working in harzardous positions)....

it is the dollar amount AFTER the $23,000/$26,000 threshold that would be taxed....

and it taxes insurers, not individuals.

The tax wouldn't go into effect until the year 2015.

The average insurance plan has a premium value of $13,375 for families.

Approximately 21% of Union household pay more than $13,375, but not necessarily more than $23,000.

Many of those with a Cadillac Plan have it because they have pre-existing conditions or due to their age, and therefore pay more for their insurance premium value. The Senate bill would deny this kind of discrimination...and would cut the disparity ratio from 11 to 1 down to 3 to 1.

In conclusion, this tax would affect approximately 2-4% of the currently insured,
many of which would no longer need to pay for Cadillac insurance if the health care reform bill is passed.



http://ehbs.kff.org/?page=charts&id=2&sn=16&p=1

[Hello_Kitty]

5. So you prefer this to the House plan to tax the ultra-rich? eom

[FrenchieCat]

7. I have no preference beyond getting the best bill out.....

and covering as many as possibe.

I do not, however, favor the encouragement of a top tier health insurance unaffordable for most Americans being in existence. The entire offering allows a tier system of healthcare at the extreme. I don't believe that there should be a $25,000+ a year policy available to some, with benefits included that are not available to all. It reeks of classism in the issue of health care coverage.

But of course, that's just me.

[Hello_Kitty]

15. This is hilarious

You don't believe in separate unequal tiers of health care but you are an ardent supporter of a bill that shoves the lowest income Americans into Medicaid while subsidizing those who make slightly more money to buy private health insurance.

[David Zephyr]

17. Nonsense. My premium is high (above $8K) because of my age.

I will be taxed (not the insurance company) because my plan (hardly a cadillac) premium is over $700 per month and is the same as my younger co-workers' plans where their premiums are in the $250-$350 range).

As the article clearly points out AGE, which makes premiums higher will push older Americans into being taxed on their already high premiums.

That's the facts.

And they are ugly.

And the American People are going to be angry as shit when they learn more.

Your chart does not take into account that age will be a double edged sword to older Americans who are already paying with their blood for insurance and now will also be taxed on their insurance.

Justify that shit.

[laughingliberal]

46. +1

[doc03]

26. What is your motive to push this Cadillac tax thing? Are you

one of the people that would have to pay the upper income surcharge? Do you just have a bone to pick with Union workers who fought for benefits? Are you pushing it so as not to admit Obama is wrong? If this health care bill goes through in either form it is going to be a blood bath in November, people are pissed about this whole mess.

[Bluebear]

28. Motivation: Obama backs it, she believes it, and that settles it.

[doc03]

30. I agree n/t

[TheWatcher]

51. Superior Indifference at it's finest.

It's really kind of sad at this point.

Some people have grown so desperate to support The Football Team and it's Quarterback so desperately they cannot even think for themselves anymore.

Except when they are crafting spin to justify everything they do as the greatest Master Stroke Chess Move Jedi Maneuver of all time.

Rah Rah, Sis Boom Bah.

[FrenchieCat]

32. I try to inform myself, instead of just being reflexive.....as I ask questions,

do research and provide facts.
how about you?

and I'm not pushing shit.
I'm just providing data on this,
as it appears that many folks don't know what in the fuck
they are talking about.

[David Zephyr]

33. Answer the questions I posed above since you say I don't know what the "fuck" I'm talking about.

How can you possibly with any face at all justify taxing the healthcare plans of older Americans whose premiums are high, not because their health plans are 'cadillacs', but ONLY because of their age?

[Bluebear]

37. I dunno, reading that post

I think it was
some kind
of poem?

[TheWatcher]

52. Obi Wan.....Once Felt As You Do.

Maybe she will not answer them because she can't spin the answers to fit the paradigm of Eternal Rose Colored Rainbows she lives in, regarding the Lord and Savior of us All.

Remember, "Message Discipline", Party Loyalty, and Perception Of Reality are the keys to being a good Democrat.

If you learn them as well as she and some of the others have, maybe they'll let you join their little club someday, and you can be one of the Cool Kids too.

It will be just like High School.

And don't you wish you could just go back to those days of simplistic hierarchy forever and ever and ever?

Come on David, give in to the spin.

You'll be happier.

You'll have more friends.

You'll be on "The Winning Team".

And I'll bet you'll get a cool decoder ring, too.

Sure, you'll be living a lie, but what do you care?

You'll have yours. Screw Everyone Else.

You Don't Know THE POWER Of the DARK SIDE.....

[Zhade]

43. You should start actually providing facts, then.

NT!

[TheWatcher]

53. You mean the Spin is not good enough for you?

Next you'll be wanting fries with your Pony.

Ungrateful serf....

:evilgrin:

[doc03]

23. It taxes plans over $8000 for singles you left that out! n/t

[David Zephyr]

34. She knows it and doesn't want to address it.

But thanks for bringing it up.

It's apparently a source of embarrassment for the Obama water carriers who haven't heard the "talking points" from the White House yet that will sound somewhat credible.

So, until they get their message, they will be silent.

In the meantime, Americans are going to be up in arms.

[laughingliberal]

47. The ones who defend this regressive pile of crap always leave that out

And plenty of individuals over 50 have plans through their employers with premiums that high.

[dsc]

38. nice of you to leave out singles

Singles have a limit of 8300 in the Senate bill. My decidedly unCadillac plan will be taxed by 2018 under this plan with a modest 8% health inflation rate.

[Me.]

3. So, The Wealthy Get Another Pass

[Hello_Kitty]

4. And people on DU are celebrating it. Unbelievable. eom

[FrenchieCat]

8. No one is celebrating shit.

and if so, please provide the links to the parties folks are throwing.

[Hello_Kitty]

11. .

http://www.democraticunderground.com/discuss/duboard.php?az=show_mesg&forum=389&topic_id=7416798&mesg_id=7416831

[FrenchieCat]

12. How is that a celebration?

The entire sarcasm of the "Pop the Champagne" comment did not escape me.
Pardon me if I respond in kind.

Or where you linking to the OP to begin with? :shrug:

[Bluebear]

13. Source: Kaiser Family Foundation, yet.

yeah, I will take their word over the ALF-CIO :eyes:

[LeftyMom]

16. Well yeah. It's not like Kaiser sells bargain basement insurance or anything.

They sure don't have a motive for supporting a bill that would drive the uninsured to get insurance and people with good plans to get downgraded. :eyes:

[chimpymustgo]

9. Ain't it strange. I pity the fool...

[Me.]

14. It'll Be The Middle Class, Once Again, That Carries The Burden

Snip “The administration recently indicated that it supports including a tax on so-called Cadillac health care insurance plans as part of final health care negotiations between the House and the Senate. The proposal, while believed to be extremely important in getting health care costs under control, is deeply unpopular in the labor community. Many union members are enrolled under those plans -- having given up salary increases to get the additional health care benefits. Now, they stand to have those benefits taxed. Cont…

http://www.huffingtonpost.com/2010/01/07/obama-to-meet-with-union_n_415088.html

[Bluebear]

41. exactly

[laughingliberal]

48. Same old protection of the wealthy and the corporate interests while the people working their asses

off and getting nowhere fast get to take another fucking hit. Disgusting. Doubly disgusting to see Democrats supporting it.

[OHdem10]

10. And the Insurance Companies will find a way to pass these hits on

to the Insured(us). This is what business does. They make no
bones about it. The Senate should know this or they should not
be Senators. Look at the fees supposedly hitting the Insurance
Companies and know the Senate is charging you.

[grantcart]

21. In the case of the small market and individual markets the OPM sets the premiums

and in most cases there is fragmentation in the market so that Humana, for example, doesn't have any cadillac plans and would have nothing to pass on. Humana operates almost 100% on government related health plans and has a net profit of 1.7% on operations.

Large group plans are negotitated by contract and could only be increased if agreed by both parties.

Moreover the Senate bill establishes a MLR that would make it impossible to simply "pass on" non treatment costs.

[laughingliberal]

49. Wendall Potter is on record as saying the 85% MLR is the level the industry lobbied for

It is the level at which they are most comfortable they can manipulate the numbers. One proposal set it at 90% and Obama's director of OMB put the cabash on it saying it would amount to a nationalization of the system. Besides the fact that the 85% level is easily manipulated, there is no one, again according to Potter, in the federal government with the expertise to audit these corporations thoroughly enough to catch the manipulations.

[wroberts189]

18. Forgive my ignorance please..but how do you lower HC costs by taxing it?

God damn the ignorance. Single payer... NO ..Public option ..NO.

Trigger? Some mythical thing that might only kick in if aliens landed and Jesus returned?

Sorry no on that as well. Cost controls NO.

Loopholes ? A 4 year old could shoot basketballs through them while blindfolded.

Mandatory payments to private corps. under penalty of law ..direct taxpayer subsidies straight to the shareholders... taxing your health plan if you can afford a good one? YES!

Anti-trust rules .. NO.


Jesus ..its like we elected republicans. WTF?

[freddie mertz]

19. Answer: Only by having benefits CUT.

Which is what will happen, of course.

[wroberts189]

25. 100% correct. Employers are already widely quoted as saying that is exactly what they will do...

God dammit USA people .. you are like a bunch of deer on the highway as a convoy of heavy trucks barrels down on you at 80mph.

And that is saying it nicely.

You are actually a rabbit in a huge wide open field as 5 hungry hawks collectively think breakfast is served and ready.

I do not know what is worse... trying to warn the busload of orphans heading off a cliff.. or being on board. Some of these days I would rather be on the bus.

[Zhade]

44. Hey, some of us are awake. But the others won't listen.

NT!

[LooseWilly]

24. The last sentence you quoted says it all to me.

"The Democratic leadership welcomes a more hands-on White House, as Obama's imprimatur could provide political cover to members casting a tough vote in an election year."

Where the fuck was the leadership which "could provide political cover to members casting a tough vote in an election year" before this???

Is this a sick joke? This is what Obama's been saving up his "political capital" for?? To push the House into metaphorically pissing on the shoes of the unions? This is why DADT has to go on same as before? This is why DOMA has to be rigorously defended in court? This is why accountability investigations into past administration's alleged misdeeds is shrugged off as irrelevant?

The White House saved up political capital to push the House to tax people with expensive Health Insurance rather than imposing a 1% tax on half-millionaires' income?

What, is the Obama White House now going after W's base?


Errhhhmm.... sorry. I lost my shit for a second there.

What I meant to say is: "What a fine bit of political long game strategy. Worthy, indeed, of a chess master. It would've been unseemly to have used a strategy that didn't sacrifice so many pawns, obviously. Unsportsmanly, really. But, in a new spirit of "bipartisanship", this President isn't afraid to sacrifice a couple of extra pawns in order to make sure to not make the other side of the game look bad. Bravo sir, neatly done."

[Bluebear]

27. For a year now, the faithful here have been blaming Congress, as the President "can't legislate"

All of a sudden we see what he is pushing.

[LooseWilly]

29. Exactly, and a senate insider admits just what sort of leverage the administration had all along.

They just chose not to use it. Not even toward the end when a vote or two could've made the difference... the pressure fell on Reid to make a deal with Lieberman. Any deal. Not the other way around.

Soon other points will be stressed, in hopes that we'll forget this point.

:+

[laughingliberal]

50. The administration did use their leverage. They used it to get an industry friendly bill nto

I'll not be forgetting it any time soon.

[David Zephyr]

40. Bingo.

"pushing" be the inoperative word.

[David Zephyr]

36. Your lips to the ears of every Democrat in America.

You get the microphone, LooseWilly!

[senseandsensibility]

39. Sickening, isn't it?

I, too can't believe that some are happy about this. But thanks for laying it all there.

[DeeOwl]

45. Been a friggin year already and this is where they are at?

Major wars have been won in less time. Not that American establishment would know anything about that of course. Heck, in post WWII Soviet Union the commies built entire cities housing hundreds of thousands in months time, and this was in the immediate aftermath of WWII itself. I wonder how long it would have taken US to recover from type of damage seen in post-WWII Europe, or recover from something like Katrina on a continental scale... can you imagine?

Home of brave my a@s! Maybe the Prez should be a little of what he's constantly accused of, a commie. You got the CIA standing-by on a hot-line Mr. Prez, use it! That Senator is giving you trouble with the bill? How about surfacing some hidden footage of him screwing three hookers while screaming anti-Semitic remarks? So Mr. Prez, what is worth more to you: saving hundreds of thousands of lives of your uninsured constituents, or risking impeachment?

Similar question goes to all of those who identify themselves as democrats: saving the uninsured or saving face of the Democratic Party's establishment?