Question: About this Cadillac Plan Insurance Excise tax.....

[FrenchieCat]

Why am I supposed to be upset that Insurance Companies are going to have to pay a tax
on each Cadillac Plan they underwrite?
http://democrats.senate.gov/reform/patient-protection-affordable-care-act.pdf

Given the fact that the health insurance companies will be subject to the 85-80/15-20 MLR, they won't be passing this added expense onto the subscriber, or to the employer either....
cause taxes aren't something considered as reducing profits (since it isn't a deductible expense).


Isn't the point of taxing insurance companies means that this "special" coverage is going to be eventually taxed out of existence?

Isn't that what we would want? To get rid of a Tiered Insurance system, where those who can afford it are already set up to get to have a better plan than everyone else?

Isn't that change that we want, and if not, why don't we.

Perhaps someone can help me with this?

[ShortnFiery]

1. Every AMERICAN deserves affordable high-quality (Cadillac) Health Care.

Your scenario is bizarre. The ruling class HORDES all the damn LUXURY of any form or fashion.

[FrenchieCat]

3. Ok....I'm gonna listen to you tell me why Cadillac plans are good

and why insurance companies paying taxes on them is bad.

Now try to make sense, and leave your normal pictures out of this....
cause we don't need the added drama. K?

[napi21]

7. I suspect the "cadillac" plans have little to no copays, and

would totally be paid by the employer. That means the employee would get their HC free. From everything I've seen in researching ins. plans for myself & hibby, the higher the premium, the lower your out of pocket costs. For us, it doesn't pay to buy anything like that because it would cost us more than our OP costs could be.

[frazzled]

97. You would be suspecting a lot wrong

First of all, I have to laugh at your characterization of a plan that costs more than TWIÇE what the average health care plan costs, but has no $10 or $20 copays, as being the equivalent of "free" healthcare! $26,000 a year is free health care? Try free yoga classes and plastic surgery.

Next, while it may be true that these plans have lower copays and deductibles, they do not (I repeat not) necessarily have better benefits. That has been shown by numerous studies.

Lastly, copays are not a bad thing. They're good for bringing down the overall cost of health care. Most of us have to pay somewhere in the area of $10-$30 for an office visit. You should have to put a little skin in the game: otherwise, doctor's offices would be flooded with people rushing in for hangnails and imaginary ailments. Overusage of doctors puts a stress on the system.

Deductibles are another story, as they continue to rise. For most of us, having a several-thousand-dollar-a-year deductible means you essentially have what we used to call "major medical" (today's term: catastrophic) insurance. The good thing about the new health care bill is going to be that a lot of preventive care is going to be outside the deductible.

Lastly, let me just repeat the story about how we chose the "fancy" PHP plan from my husband's new employer when he changed jobs and moved to another state. It was more expensive, but after a less-than-stellar HMO plan we'd had previously, we thought we wanted the "better" coverage. As the deductibles in it climbed each year we finally decided to change to the same insurer's less expensive HMO plan. The premiums are cheaper, there are no deductibles (in network), and we get to go to the exact same doctors we were seeing under the more expensive plan. More expensive better? Not for us, so far.

[ShortnFiery]

29. I'm not the one who's accusing those disenfranchised of playing the role of Marie Antoinette.

You're the one who is twisting every fact into a pretzel in order to JUSTIFY this horrific MESS that will serve mainly to continue to transfer our middle class tax dollars up to the bloated wealthy Insurance Cartels.

Here's you picture ... make some "Happy Talk" about Health Care and Community with this tragedy?

[mkultra]

103. NO middle class money goes up

in a luxury tax, the money of the RICH comes back down.

[Hello_Kitty]

110. And yet, somehow, that translates into higher wages for the middle class

Because this excise tax, which supposedly doesn't impact working people's insurance plans at all, will cause those same plans to become so much cheaper that their grateful and generous employers will pass the savings along to them in the form of higher pay. The income taxes on which will be the lion's share of the $149 billion the Senate claims it will raise via this excise tax.

[mkultra]

120. Well, thats a new claim. Is it the new smear?

[Hello_Kitty]

126. Are you serious? Here's a pro-excise tax article that claims it.

Indeed, the JCT estimates that more than four fifths of the revenue that the government would collect as a result of the excise tax would come from income and payroll tax revenue on the billions of dollars in higher wages and salaries that employees would be paid. Of the $201.4 billion in increased revenue over ten years, only $37.8 billion would come from the excise tax itself, the JCT estimates.

http://www.cbpp.org/cms/index.cfm?fa=view&id=2957

I guess they're smear merchants too. :eyes:

[mkultra]

127. Just from the very wealthy

CEOs are the only people that have cadillac plans. They would be hit by teh tax increase. Don't think for a second that the money corps save on insurance will go into the pocket of the worker. It will go back into their coffers and be taxed at corporate rates.

[Hello_Kitty]

128. So why are they claiming increased wages then?

Why did Sen. John Kerry write an article for Huffington Post claiming this excise tax would lead to higher wages?

Fifth, for the small sub-set of plans that are affected, the likely impact will be to increase workers' wages. MIT economist Jon Gruber recently found that the excise tax included in the Senate bill would lead employers to raise wages by $223 billion between 2010 and 2019. In 2019, wages for those affected by the provision will be higher by about $660 per household. I repeat -- raise wages. After spending years and years hearing from workers tired of seeing their unions forced to spend all of their energy at the bargaining table just to hold on to health care instead of negotiating for better wages, we now have a way to help increase wages and improve health care simultaneously.

So we're supposed to believe the following:

1. This excise tax will only affect a small number of plans and mostly those held by wealthy executives and the like.

2. Yet the tax that doesn't affect working people at all will somehow lead to higher wages for working people.

3. Oh wait, sorry, it won't go to wages after all. It'll go into corporate profits, which will be taxed. Because everyone knows that corporations will report this income fully and not find ways to shelter it.

[mkultra]

129. because he is a poor economist

who stands virtually alone in his belief that reducing costs to employers will cause those very employers to give that extra cash to its employees. This is the worst kind of trickle down theory i have ever seen. Companies take monies earned from cost cutting and plow it into capital investments, of which a very small portion goes toward raises and new hires.

1. As for point one, yes, you are suppose to believe that only executives have $28K dollar a year insurance plans that include free yoga, plastic surgery, and mountain retreats. Actual acts show that normal working class people that have good insurance policies see the total cost at around $13K. Plans that cost more than double this are LUXURY items. Your defending the rich.

2. Already addressed. It will not lead to higher wages for working people. It may lead to higher wages for CEOs

3. All corps use tax cheats but this money will show as cost reductions which will increase their bottom line all while keep the same level of service. Yes, there will be corporate tax benefits.


Not only is this information factual but its pretty fucking common sense. Check the Kaiser family foundation for more fact.

[Hello_Kitty]

130. Virtually alone? Hardly.

He's got so much company that the Senate is claiming the excise tax will produce billions in revenue from increased wages. If it won't lead to wage increases and that is "pretty fucking common sense" as you so aptly put it, then Senator Kerry and every other Democratic Senator who supports this excise tax is lying. Not uninformed, not merely mistaken, but lying.

If this tax is so great there's no need to tell bald-faced lies about what it will do, is there?

[mkultra]

132. No matter who is saying it, Its still trickle down theory

You either buy that bullshit or you don't.

[mkultra]

102. So lets tax it and spread it around.

[FrenchieCat]

2. Somebody's got to know something.....

cause a whole lot of Duers are over at LBN responding...shit, shit, shit....

because of a story that the President doesn't have a problem with this.

The only problem with that thread, is that no one seems to really know
what they are talking about, beyond just saying things like..."One termer".

I'm trying to understand what everyone knows that I don't know.

[Clio the Leo]

6. The problem stems from Union workers....

... (some of) whom apparently have lower hourly wages but "Cadillac" health care plans. The notion being that not everyone who has a "Cadillac" plan has the bank to drive a Cadillac (2010 model anyway.)

The cynics argue that Obama is screwing over the Unions. Given the fact that the Unions are who helped put the President's foot into the door on the national stage LONG before most of us even knew who he was coupled with the fact that the President isn't stupid enough to screw over his supporters who are capable of moving large groups of active people on any given cause, I'm going to presume that that's probably NOT what he's doing.

Some like to assume the worst about the President .... I'm going to assume the worst about the insurance companies who are pushing this meme.

[FrenchieCat]

10. So why are DUers buying the meme that the Insurance companies are putting out?

Cause you know they, the insurance companies, are the ones who don't want to pay the additional tax....which is why it's all over the news. Cause if it was something really bad for the people, the news wouldn't say boo!

[Clio the Leo]

13. Well it certainly wouldn't be because some of us take delight....

... in bashing the President now would it? ;)

Oh but they're just holding his feet to the fire .... and in so doing, helping out the very insurance companies they claim to be against.

Crazy huh?

[karynnj]

83. Not to mention that the insurance companies and other groups

are fighting ANYTHING they can. Here, they see a thread that they are hoping that if they pull, the entire HCR will unravel. Much of the information being put out is not accurate.

[napi21]

4. I suspect it's because people don't know what the ins. co's will

really do. I understand why many union folks who negotiated their HC into their contract and gave up wages in exchange might be concerned. If the ins co's decide they aren't going to pay any more they might pass it on to the employer and the employer would pass it on to the employee. It's almost always the unknown that causes the concerns.

[FrenchieCat]

5. So Barack Obama will be a one termer because of the unknowns

of what might happen by taxing an insurance company might cause concern?

That's quite a leap.

[napi21]

9. To assume Obama would be a one termer because of this one thing is a much

bigger leap!

[FrenchieCat]

15. Well that is what they are over there in LBN saying......

no one gives much of an explaination.....
just kind of pile on.

It's quite weird actually.

[flyarm]

8. because people took less salary for many many years through their unions for

great health care plans..the people paid for it with less salary! That is why!

They walked picket lines, they went on strike and sacrificed their salaries and many times their jobs for great health care for their families.

Many have lost their pensions in this nation but they fought for and gave up many other benefits including higher pay and higher pensions for those health care plans..that is why!

Many unions went as far as to go back to many seniors in their businesses that didn't have a union when they worked and have fought for those people to get the same coverage as the current union members, and the current members gave up alot of salary to get that health care coverage for themselves and former employees! That is why!

Many of those plans have been paid for by lower salaries..to ensure the employees have great health care plans! That is why!

Many of those plans have been paid for with the blood, sweat and tears on the backs of American workers! That is why!

[FrenchieCat]

12. I think everyone should get "Great Health Plans"....

not just those who "negotiated for it"....
plus, maybe now, they'll negotiate for a different, but just as good health plan,
and get the difference back in wages.

Isn't the point not to start out with this tiered situation of since this plan is excellent,
that means we can offer shit to everyone else?

[flyarm]

16. they didn't just negotiate for those plans..many lost jobs going on strike for those plans..

many lost their homes for those plans going on strike..many worked for shit wages for years and years for those health care plans..

get your head out of ..well..i don't know if you can!

[doc03]

19. So in other words take from the ones that fought

for their benefits and give it to someone else that didn't. Like Obama said on the campaign trail "Spread the wealth around". Now we who put him in office are who he thinks is wealthy.

[jumptheshadow]

76. Spot on...

And aren't some DUers always lecturing how people should get off their duffs and fight for what they want?

Yet somehow when people who have "fought the good fight" and sacrificed to get insurance that provides real benefit to their families they are told they are being selfish for wanting to keep it.

And, by the way, the unions have been lobbying their companies to get good health insurance for EVERYBODY.

This is just another way of lowering the standards for all workers.

[flyarm]

96. I want to know..how we get our lifetimes of earning power back and the money we gave up for a

lifetime in salary for these benefits...where do we go to get what we gave up for these health care plans????????

Many of us now retired...who is going to give me the money i lost giving up salary..for my health care plan now..it could be millions..and millions....

who will give me back the days and weeks and months i walked on picket lines in the snow and freezing rain..to get these benefits?

who will give me back the so many sleepless nights on strike wondering how i would feed my family for these health care benefits?



who will give me back the times i had to move back with parents..with my children while on strike just to make it through???????? SO I COULD HAVE THESE HEALTH CARE BENEFITS?

WHO WILL GIVE ME BACK ALMOST FULL YEARS OF SALARY ON STRIKE.. (I WOULD LOVE THOSE YEARS BACK)..SO I COULD HAVE THESE HEALTH CARE BENEFITS?


If you think for one minute union people will vote for democrats if they put this bill through as written by the senate..you need your head examined..and if you think your little message board propagandists will fool union people..again..head examined!!

[mkultra]

104. ass backwards

The senate tax plan taxes the policies of the rich who get free things like yoga and plastic surgery to give working class people better coverage. Those bastards wouldn't lift a finger to work for anything so don't come here selling your sympathy for the rich.

[SpartanDem]

44. That's the damn problem

the employer tax exclusion is one the most regressive things about the US healthcare system. It amounts to a giant subsidy for those with better benefits on backs those with fewer or no benefits because it is compensation that taxes aren't paid. It addition it only encourages the stupid US concept of tying health care to employment.

[karynnj]

85. Exactly

The tax is only on the part above the threshold - originally set at $23,000. This is nearly double the cost of the average plan. That means the employer is able to give the employee up to $23,000 of "remuneration" in the form os a health insurance plan that is not taxable for the employee (as his wages are) and is a tax deduction for the employer.

This tax exclusion is the means the government used to encourage companies to provide insurance to their employees. Back then, the tax rates were more progressive than they are now. The company could offer an employee a combined wage/insurance package more cheaply than a wage package of similar value, after taxes were taken into consideration.

Not to mention, that at the current threshold it mostly impacts executive plans that are far above the threshold - not union plans that are below it. As to the future, remember that only the part above $23,000 plus any increases is taxed.

[karynnj]

84. They should focus their energy on defining the threshold correctly

The fact is the current threshold - nearly twice the average plan, very likely does not hit a single union plan. No one has yet identified a plan that does - and it is clear people have looked. What they are using is a projection that says that many could be hit by 2016.

Now, this is a projection made over a period where there will be massive change in the entire industry. One obvious change is that the loaded costs in all plans for the uninsured will go down. This will lower costs. It is also possible that more people getting help early will mean the overall costs will be lower. I am not questioning the abilities of the CBO analysts, I am saying that there are many factors that are not and can not be included well in their projections. (A point made by many of the staffers as well as Senators in the hearings.)

2016 is, of course 5 years away. If these projections appear to be real, it would be possible to change the threshold through reconciliation - as it is relevant to the budget and part of an existing piece of legislation.

[beyurslf]

11. I am assuming that as soon as they make is mandatory that we buy insurance and offer breaks for

everyone making less than 40K a year (like me) that my company (and many others) will no longer offer it to their employees.

[doc03]

14. I work in a hazardous industry and we have fought and

sometimes died for those benefits. Myself I have been on strike for more than 14 months of my life to hold on to those benefits. I have paid Union dues for over 40 years and my Union supported Obama, now he does exactly what he criticized John McCain for. :mad:

[flyarm]

18. me too! and i am damn sick and tired of hearing the fucking excuses! solidarity !! fuck anyone who

trys to pull the bullshit excuses for this that it is acceptable..I worked my entire life for my benefits only to see my plan get watered down year after year..and now be told it is a cadillac plan..fuck them!

If congress passes this , they will pay a huge price at the polls! That I assure you..

[doc03]

21. Amen n/t

[FrenchieCat]

22. You really aren't explaining to me how taxing insurance companies

takes something away from you?

Could you elaborate....?
beyond acting pissed....cause that's easy to do,
especially without any details.

[Name removed]

24. Deleted message

Message removed by moderator. Click here to review the message board rules.

[FrenchieCat]

26. I really don't know,

and you screaming at me doesn't make it any clearer.

I'm sure you have some kind of article that discusses this
or something....cause you acting like I can't ask a question
is not the way to go, IMO.

Makes it appear that you don't know what in the fuck you are talking about,
beyond being pissed cause somehow, although you can't totally explain it,
someone "might" take something from you, although you aren't sure...not really.

Don't you know of someone that can explain it better than you?
A newsletter from the union or something?

Geeze....if questions get your ire all up like that,
perhaps it means you are not interested in enlightening those of us
who don't quite get it, since apparently you understand it very well,
which is why you are so livid. Right? :shrug:

[flyarm]

41. then start reading and educating yourself..it is all over the internet!

not anyone's job to educate you.

Start over at Firedoglake and Emptywheel..you have lots of reading to do!

White House Still Pushing the Excise Tax Hocus Pocus
By: emptywheel Wednesday January 6, 2010 10:56 am

http://emptywheel.firedoglake.com/2010/01/06/white-house-still-pushing-the-excise-hocus-pocus/

snip:

Yet, the White House has not revisited any of the assumptions it has made about the excise tax that seem to be increasingly dubious–such as that it will end up giving workers a raise.

Interestingly, the EPI has just released a paper debunking the claim.

There is logic to , but it is only skin-deep and deeper examination will show it to be simply not true. The logic can be seen looking at trends in health care premiums and wages—wage growth fared better in the late 1990s when health care premiums grew more slowly than in the early 1990s and wages performed poorly in the 2000s, a period when health premiums grew strongly again.

However, digging just a bit beneath the surface reveals the following:

Health care costs are not large enough to substantially move wages as these proponents claim;
Examination of actual wage and benefit trends confirms that changes in the trajectory of health care costs did not materially affect wage trends over the last 20 years; and
The wage behavior described—accelerating in the late 1990s and more slowly thereafter—actually best characterizes wage growth for low-wage workers who have minimal access to employer-based health care. Conversely, this pattern of wage-growth over time is least pronounced for higher paid workers with the most health coverage.
Clearly, this “health care theory of wage determination” is wrong, and other factors explain these overall wage trends. The simple explanation is that productivity accelerated in the mid-1990s, and the low unemployment (and hikes in the minimum wage) facilitated faster wage growth. That this wage growth disappeared entirely in the 2002-07 recovery is not due to faster health care cost increases but to weak employment growth and employers’ ability to achieve increased profitability rather than pass on productivity gains to workers. This reveals a fundamental flaw in our economy: productivity gains are not passed on to higher living standards for workers.

[inna]

47. good post, actually. we rarely agree, but i'm with you on this one, FC. nt

[flyarm]

49. then you need to educate yourself as well!

White House Still Pushing the Excise Tax Hocus Pocus
By: emptywheel Wednesday January 6, 2010 10:56 am

http://emptywheel.firedoglake.com/2010/01/06/white-house-still-pushing-the-excise-hocus-pocus/

snip:

Yet, the White House has not revisited any of the assumptions it has made about the excise tax that seem to be increasingly dubious–such as that it will end up giving workers a raise.

Interestingly, the EPI has just released a paper debunking the claim.

There is logic to , but it is only skin-deep and deeper examination will show it to be simply not true. The logic can be seen looking at trends in health care premiums and wages—wage growth fared better in the late 1990s when health care premiums grew more slowly than in the early 1990s and wages performed poorly in the 2000s, a period when health premiums grew strongly again.

However, digging just a bit beneath the surface reveals the following:

Health care costs are not large enough to substantially move wages as these proponents claim;
Examination of actual wage and benefit trends confirms that changes in the trajectory of health care costs did not materially affect wage trends over the last 20 years; and
The wage behavior described—accelerating in the late 1990s and more slowly thereafter—actually best characterizes wage growth for low-wage workers who have minimal access to employer-based health care. Conversely, this pattern of wage-growth over time is least pronounced for higher paid workers with the most health coverage.
Clearly, this “health care theory of wage determination” is wrong, and other factors explain these overall wage trends. The simple explanation is that productivity accelerated in the mid-1990s, and the low unemployment (and hikes in the minimum wage) facilitated faster wage growth. That this wage growth disappeared entirely in the 2002-07 recovery is not due to faster health care cost increases but to weak employment growth and employers’ ability to achieve increased profitability rather than pass on productivity gains to workers. This reveals a fundamental flaw in our economy: productivity gains are not passed on to higher living standards for workers.

[inna]

53. absolutely adore the (pretty) colors/ (large) fonts!!

:P
:just joking:


dude, i'm probably THE biggest "emptywheeler/firebagger/hampsherite" on this board, period.

(not to mention, somewhat of a policy wonk.)


no need for condescension. - but cheers, anyway. :toast: :hi:

[mkultra]

105. Im calling you out

I think your full of shit and possibly a troll. No union worker or average American has a $28K Cadillac insurance plan and taxing the rich who pay for these plans will help insure average Americans get good coverage.

[flyarm]

111. you are dead wrong! May I suggest you do some reading..and troll? get fucking real!

thank you to the op chimpymustgo in this thread...

please take the time to read it!

http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=389x7416592

It will hit many MIDDLE CLASS health plans, and lead to lessening of coverage - thus the "cost cutting". Obama prefers this to taxing the FAT CATs, as the House plan would. NYT's Bob Herbert explains it well. Below are additional links to AFL-CIO, USA Today, Huffington Post.

http://query.nytimes.com/gst/fullpage.html?res=9C02E0DE ...

A Less Than Honest Policy

By BOB HERBERT
Published: December 29, 2009

There is a middle-class tax time bomb ticking in the Senate's version of President Obama's effort to reform health care.

The bill that passed the Senate with such fanfare on Christmas Eve would impose a confiscatory 40 percent excise tax on so-called Cadillac health plans, which are popularly viewed as over-the-top plans held only by the very wealthy. In fact, it's a tax that in a few years will hammer millions of middle-class policyholders, forcing them to scale back their access to medical care.

Which is exactly what the tax is designed to do.

The tax would kick in on plans exceeding $23,000 annually for family coverage and $8,500 for individuals, starting in 2013. In the first year it would affect relatively few people in the middle class. But because of the steadily rising costs of health care in the U.S., more and more plans would reach the taxation threshold each year.

Within three years of its implementation, according to the Congressional Budget Office, the tax would apply to nearly 20 percent of all workers with employer-provided health coverage in the country, affecting some 31 million people. Within six years, according to Congress's Joint Committee on Taxation, the tax would reach a fifth of all households earning between $50,000 and $75,000 annually. Those families can hardly be considered very wealthy.

Proponents say the tax will raise nearly $150 billion over 10 years, but there's a catch. It's not expected to raise this money directly. The dirty little secret behind this onerous tax is that no one expects very many people to pay it. The idea is that rather than fork over 40 percent in taxes on the amount by which policies exceed the threshold, employers (and individuals who purchase health insurance on their own) will have little choice but to ratchet down the quality of their health plans.

These lower-value plans would have higher out-of-pocket costs, thus increasing the very things that are so maddening to so many policyholders right now: higher and higher co-payments, soaring deductibles and so forth. Some of the benefits of higher-end policies can be expected in many cases to go by the boards: dental and vision care, for example, and expensive mental health coverage.

-edit-

We all remember learning in school about the suspension of disbelief. This part of the Senate's health benefits taxation scheme requires a monumental suspension of disbelief. According to the Joint Committee on Taxation, less than 18 percent of the revenue will come from the tax itself. The rest of the $150 billion, more than 82 percent of it, will come from the income taxes paid by workers who have been given pay raises by employers who will have voluntarily handed over the money they saved by offering their employees less valuable health insurance plans.

-edit-


http://query.nytimes.com/gst/fullpage.html?res=9C02E0DE ...
******

Health Care Reform Tax Hits More Chevys Than Caddies

by Mike Hall, Jan 7, 2010

-edit-

Backers of the tax say it would impact only “Cadillac plans” but the Economic Policy Institute (EPI) calls that an “urban legend.” Says EPI economist Josh Bevins:

The excise tax proponents say their target is a Cadillac, but in reality they’re about as likely to hit a Chevy. The excise tax is not a progressive levy on lavish plans. Instead it’s a tax that will hit small businesses, older workers, and those most in need of health care the hardest.

-edit-
National Nurses United (NNU), the largest registered nurses union in the country, calls the tax scheme “unconscionable” and says working families “would have their health coverage taxed and seriously eroded,” if it is enacted.

-edit-

the excise tax on insurance—especially in contrast to surtax on the rich—proves to be just as bad as policy as it is politically. It’s intellectually bankrupt and widely despised.
-edit

http://blog.aflcio.org/2010/01/07/health-care-reform-ta... /

*******
'Cadillac Tax' in Health Plan Would Hit Middle Class Hard
Posted:
12/17/09

Jim Huber, 59, calls himself "a union dirt guy." He has worked in the same Maryland steel mill for 41 years, where his father and grandfather worked before him and where his son now works, too.

Huber makes a base salary of $42,000 per year as an electrician in the plant. He drives a Ford pick-up truck and lives in a row house across the street from the house where he grew up. Although he had hoped to retire from the mill years ago, a bankruptcy at his company slashed his pension by more than half. "It looks I won't get out of here until I'm 65," he said.

Huber, who is also a United Steel Workers benefits representative, said that based on the health benefits they receive, he and every worker at his plant would be hit by the excise tax on insurance companies now moving through the Senate as a part of health care reform.

"The government is going to put together a plan of health care for everyone, but they can't tax the guy that's pulling the cart." he said.

The levy has been dubbed the "Cadillac tax," but research shows it would likely affect a broad swath of Americans regardless of their income, which could indeed amount to the tax on the middle-class that President Obama promised would not happen under his administration. The tax is a growing source of anxiety for Huber and his co-workers, but also for Democrats in the House, who vow to strip the measure out of the bill in conference or consider bringing the bill down altogether.

The confusion surrounding the tax comes from its complexity and the luxury car it is named for. When President Obama first raised the idea of taxing insurance companies this summer, he framed it as one way to get Wall Street executives to pay their fair share. Obama told PBS' Jim Lehrer he wanted to target "super, gold-plated Cadillac plans." Days later, Obama's senior adviser David Axelrod told The New York Times the administration wanted to tax benefits "like the ones that the executives at Goldman Sachs have, the $40,000 policies."

At the time, Obama said he did not want the tax to hit middle-class families, but when the bill emerged from the Senate Finance Committee in September, it proposed charging insurance companies and a 40 percent excise tax for high-dollar -- but not exactly gold-plated -- plans. The bill now calls for the tax to apply to plans exceeding $8,500 for individuals and $23,000 for families, for the cost of combining health savings accounts, medical, prescription drugs, dental, vision, etc. The tax is charged to insurance companies, but it is widely assumed they would pass it on to employers.
-edit-


"The middle class can't afford another tax," he said. "Let them get it from the Bush folks, the 1 percent that's been enjoying the tax cuts. Get it from them."
http://www.politicsdaily.com/2009/12/17/cadillac-tax-in...

****


Health Care: Tax Which Cadillac?

-edit-
Never mind that the idea is the very one about which candidate Barack Obama ripped apart candidate John McCain. Now President Obama and the Senate Democrats are ripping it off because heaven forbid they'd otherwise have to finance some of the health care reforms with a higher levy on the wealthy.
-edit-

http://www.huffingtonpost.com/bob-franken/health-care-t...
*****

Is tax on 'Cadillac' health insurance plans fair?

By Carla K. Johnson, The Associated Press
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 counseling, organ transplants, acupuncture. It covers speech therapy for preschoolers and in vitro fertilization.

-edit-

Taxing plans like hers is unfair, says Blair, a kindergarten teacher in San Jose, Calif. Like 57% 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.

-edit-

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.

-edit-
http://www.usatoday.com/news/health/2009-11-25-insuranc...

[boppers]

115. $50,000 a year is not middle class.

75% of the US population makes less than that. Simple as that.

[Hello_Kitty]

116. OMFG not this shit again.

$50K a year is middle class and if most people are making less than that it's because we're underpaid. You really want to go after people like that instead of millionaires and billionaires? You really want to live in a country where there's a tiny elite wealthy class and everyone else living on scraps? Because that's the 3rd world hell we're hurtling toward and it's thanks in part to "liberals" like you.

[mkultra]

121. 50K is NOT middle class

[Hello_Kitty]

123. Yes it is, Sam Wurtzelbach. eom

[mkultra]

124. middle class is dual income median to over 100K

Joe the idiot is not middle class. His income claims where shown to be false. In either case, Upper middle class folks do NOT pay 28K a year for insurance. Only lower upper class and above. The idea that this would effect union workers is as ridiculous as saying the estate tax would effect union members. Its just emotionally charged oversimplification.

Essentially, your taking up the republican argument that taxes targeted at the rich will effect the working man when its just plain false.

[mkultra]

122. Kaiser family did a survey which proves this story is bullshit

13K is the average paid for insurance plans held by union members. No regular working class person has a policy that costs 28K a year. You are out of touch with reality.

[FrenchieCat]

75. It was bound to happen one day, ya know!

Here's to it happening again and visa versa! :toast:

[flyarm]

50. damn right i am pissed..I worked my entire life for my health care benefits and pension

I have seen the pension watered down to a piece of crap..and all i have left from all those years of hard work and strikes and lockouts and picket lines is MY Heath Care Insurance.

I was a 33 yr flight attendant and now I am being told my heatlh care insurance is a cadillac plan..and it will have an excise tax of 40% on it!

Do you honestly believe that tax will not be passed onto the workers and retiree's??????

Honestly ask yourself that..if you can.

I worked with the union during contract fights and lockouts...and a strike..

My husband was the VP of his union..one of the most succsessful unions in the nation and he was directly involved in contracts during strikes * at the negotiating tables*..I think I have a damn good idea what this will do to the American worker. In fact my husband was one of only two people for his union to sign off on a contract during their longest strike. The biggest fight and block to a contract was over Health Care .. He was an original member of his union at it's inception!

I think I have a damn good idea what i am talking about.

[karynnj]

88. Do you know the cost of your plan? Is it above $23,000?

I agree that there is nothing that precludes passing the tax, all or part of it, on to workers and retirees. But, for any plan near the threshold, the first step would likely be to see what they can do to keep the plan under the threshold.

[mkultra]

106. I seriously doubt your plan is Cadillac

Does it provide free yoga and plastic surgery. Does your company pay more than $28K per year for your coverage?

[flyarm]

108. my husbands does and I am covered by both..that is all the info i want to supply on a message board!

my husband was also union..and his benefits far exceed $28,000. per year! That is what we pay out of our personal pocket in our contribution per year ..the unions pay 2/3rds more!

[mkultra]

119. Then your wealthy

Because an insurance plan that costs $45K a year is unheard off. In fact, I'm surprised it even exists. What company offers it? It sure sounds like your making it up to me.

[flyarm]

109. you really don't know or want to know or anyone else to know because you had my post deleted. eom

[flpoljunkie]

79. Pelosi is working hard to either get rid of 'Cadillac' tax or raise it to $28,000 family coverage

Do no know if this figure of $28,000 will be the minimum to which there will be exceptions for certain workers and those over 55 who have retired.

Pelosi also noted that Obama promised not to raise taxes on the middle class.

[karynnj]

90. In the early articles on it, there were statements that the unions

would not fight it with a $25,000 threshold. John Kerry and Debbie Stabanow both argued for that many times. They were able to get Reid to raise it from $21,000 to $23,000.

I wonder if Pelosi could get it to $25,000.

[bornskeptic]

82. At least be happy that you have better insurance than members of Congress.

However much your benefits may have been watered down, you say you still have a Cadillac plan, and of course the threshhold for what constitutes a Cadillac plan was set high enough so the plans available to members of Congress and other Federal employees wouldn't be affected.

[karynnj]

91. Excellent point

So excellent, I wonder if you or anyone has a credible link saying this. (I am not disputing this, but am asking because it is a very good argument to make and I think you are right or the question would have been asked if the government were exempt.)

[bornskeptic]

99. I just googled and got this.

The federal plan's Blue Cross option with vision and dental care will cost $6,971 for individuals and $16,124 for families in 2010, well below the threshold ($8,500 and $23,000) at which the excise tax, which starts in 2013, would apply.

http://www.washingtonpost.com/wp-dyn/content/article/2009/12/17/AR2009121704344.html

Other sources may give somewhat different values, but all I've seen put the cost for an individual below the $8500 Cadillac tax threshhold.

[karynnj]

101. Thank you - I had tried google, though obviously not as well as you did

This really does show that it is possible to have decent insurance well below the thresholds.

[FrenchieCat]

20. What do those benefits have to do with future coverage?

Don't Union folks pay for their Health care just like everyone else,
on a month by month basis?

You still haven't explained anything to me.
You just have a :mad: smilie there,
but haven't articulated anything of note, beyond that folks died for these benefits,
and please, how is that they died for a Cadillac Plan. I don't get this. Smells
kind of like hyperbole, although certainly I could be wrong....
but,
It is the insurance companies who have to pay...
and the new higher 85/80 MLR, won't allow them to pass the taxes on...
unless you know something that you should be explaining better.

Can you do that?

[doc03]

27. No we don't pay for our health care on a monthly basis

we negotiated contracts and gave up wage increases in exchange for health care insurance. If my employer now has to pay an excise tax on our HC premiums they will either want to lower our coverage or eliminate it. I have lost three f----g pension plans over the years because the company didn't fund them, now you want us to lose our f----g health care insurance.

[FrenchieCat]

31. You work for an insurance company?

because you are saying that your employer has to pay this tax,
but that is not my understanding.

Can you provide some data on that?

[doc03]

40. If the insurance company pays the tax they will either cut

coverage or raise their premiums. Wake up and smell the coffee you can tax the hell out of the insurance company and either my company will pay will pay higher premiums or our benefits will be cut the shareholders and executives won't lose one red cent.

[karynnj]

86. McCain had a zero threshold and this has a $23,000 threshold - that is

higher in high risk industries.

[frazzled]

98. Yo, insurance for hazardous occupations is exempted from the tax in the bill

[iamjoy]

17. Isn't It the Unions?

It was my understanding that in some cases, unions may have made wage and/or other benefit concessions in order to get more robust ("richer") health insurance coverage for their members. If the government taxes those plans, they are reducing the value of the total compensation package for those covered under such plans. Furthermore, such a move would take away one of the bargaining chips unions have in wage/benefit negoations.

Here's another reason - we assume only executives have these "Cadillac" or "Gold Plated" plans and why shouldn't the ultra-wealthy be taxed? But when it comes to health care, if you want to pay less out of pocket when you need medical attention, your premiums are going to be higher. There are people who have insurance right now, but still have high co-pays and co-insurance that may discourage them from seeking care. When they talk about medical bankruptcies, many of these people have insurance. So, why shouldn't we all have an opportunity to elect a plan that will actually pay the bills if we get sick?

Another problem is how such plans may be defined over the years. Something not defined as a "Cadillac Plan" now could be within a few years, even though the coverage wasn't improved - the coverage and price just changed as a result of escalating medical costs. If Congress "forgets" to increase the threshold, middle class Americans with "average" plans could be taxed. Also, some areas have higher costs than others, so people could be a disadvantage based on geography alone.

"Cadillac Plan" and "Gold Plated Plan" are inflammatory terms.

[FrenchieCat]

23. Can't Unions start being paid more wages if the "Cadillac" Plans are canceled?

And isn't it the insurance companies that are going to have to pay the taxes?
Cause that is what the regs say.

and considering that most fed imposted taxes paid can't be used to decrease profits,
the insurance companies will still have to deal with the 80-85 care over profits rule...
meaning that they can't just pass an expense on to the insured to recoup their profits.

[doc03]

30. Insurance companies aren't going to pay the taxes, the cost

will be passed on to the customer one way or the other. You are living in a dream world if you think any 80-85 rule will change anything, they pay lawyers to get around that BS.

[FrenchieCat]

32. When there is a limit on profits, paying additional taxes

doesn't reduce the profits....as Federal taxes are not deductible.....
so how is this going to be passed on to your employer?

[dflprincess]

33. Wendell Potter has said that the insurance companies

have plenty of tricks to get around the 80/20 rule especially as there is nothing in the bill to "keep them honest" about anything.

I'm sure employers will just fall all over themselves to renegotiate contracts and start paying higher wages. :sarcasm: Even if the "Cadillac" plans go away, employers are still going to be paying big for health insurance and the cost of that insurance is going to continue to keep everyone's income down just as it has been doing.

[FrenchieCat]

34. So you saying "I'm sure" is supposed to give me added information?

Somehow, as usual, the worse is believed, until it doesn't happen.
that's what the problem is....folks are afraid of Change, unless it is change
that doesn't touch them, unless it gives them something....but if one isn't sure,
hell with change.

I get it.

[tritsofme]

36. The tax discourages insurers from writing these policies.

For the reasons you described above, they simply aren't going to want to offer these products.

I happen to think it is a pretty good idea, and is one of the major opportunities the bill offers for bending the cost curve in health care.

[flyarm]

37. the pay increase would be minimal! Huge corps buy the insurance for low prices

because of their volumn.

But what employees give up in salary is maximum..

do some reading please..educate yourself..where the unions go..there goes all workers in this nation..count on that..and take it to the bank!

White House Still Pushing the Excise Tax Hocus Pocus
By: emptywheel Wednesday January 6, 2010 10:56 am

http://emptywheel.firedoglake.com/2010/01/06/white-house-still-pushing-the-excise-hocus-pocus/

snip:

Yet, the White House has not revisited any of the assumptions it has made about the excise tax that seem to be increasingly dubious–such as that it will end up giving workers a raise.

Interestingly, the EPI has just released a paper debunking the claim.

There is logic to , but it is only skin-deep and deeper examination will show it to be simply not true. The logic can be seen looking at trends in health care premiums and wages—wage growth fared better in the late 1990s when health care premiums grew more slowly than in the early 1990s and wages performed poorly in the 2000s, a period when health premiums grew strongly again.

However, digging just a bit beneath the surface reveals the following:

Health care costs are not large enough to substantially move wages as these proponents claim;
Examination of actual wage and benefit trends confirms that changes in the trajectory of health care costs did not materially affect wage trends over the last 20 years; and
The wage behavior described—accelerating in the late 1990s and more slowly thereafter—actually best characterizes wage growth for low-wage workers who have minimal access to employer-based health care. Conversely, this pattern of wage-growth over time is least pronounced for higher paid workers with the most health coverage.
Clearly, this “health care theory of wage determination” is wrong, and other factors explain these overall wage trends. The simple explanation is that productivity accelerated in the mid-1990s, and the low unemployment (and hikes in the minimum wage) facilitated faster wage growth. That this wage growth disappeared entirely in the 2002-07 recovery is not due to faster health care cost increases but to weak employment growth and employers’ ability to achieve increased profitability rather than pass on productivity gains to workers. This reveals a fundamental flaw in our economy: productivity gains are not passed on to higher living standards for workers.

[flyarm]

25. AP sources: Obama OKs taxing high-end health plans

yahoo must have already gotten their marching orders to pull this article..but i captured it!

AP sources: Obama OKs taxing high-end health plans Source: Associated Press

WASHINGTON – President Barack Obama signaled to House Democratic leaders on Wednesday that they'll have to drop their opposition to taxing high-end health insurance plans to pay for health coverage for millions of uninsured Americans.

In a meeting at the White House, Obama expressed his preference for the insurance tax contained in the Senate's health overhaul bill, but largely opposed by House Democrats and organized labor, Democratic aides said. The aides spoke on condition of anonymity because the meeting was private.

House Democrats want to raise income taxes on high-income individuals instead and are reluctant to abandon that approach, while recognizing that they will have to bend on that and other issues so that Senate Majority Leader Harry Reid, D-Nev., can maintain his fragile 60-vote majority support for the bill.

Pelosi and four committee chairmen met with the president on Wednesday as they scrambled to resolve differences between sweeping bills passed by the House and Senate. The aim is to finalize legislation revamping the nation's health care system in time for Obama's State of the Union address early last month.

Read more: http://news.yahoo.com/s/ap/20100106/ap_on_bi_ge/us_heal...

[FrenchieCat]

28. That doesn't tell me anything about insurance companies being taxed....

and how this guarantees that you don't get health care anymore,
or that you get it, but at a higher price.

Do you have something else?

[doc03]

35. They are putting a 40% excise tax on the so called Cadillac

plans either the employer will pay more for the insurance or the coverage will be reduced. I have been locked out of my job for over 14 months in my lifetime fighting to save benefits our fathers won in the past. If my employer has to pay more for our coverage he will either want us to pay a share of the premiums, higher co-pays or maybe just lock us out until we agree to give them up. That is what happens in the real world today.

[flyarm]

38. exactly! eom

[FrenchieCat]

39. How do you know that this cost will be passed on?

How is it that you don't take into consideration the 80-85/20-15 MLR?


Some important aspects of the tax are widely misunderstood. For one thing, an October 20 press release cites the Congressional Joint Committee on Taxation (JCT) as finding that the total number of individual and family plans impacted by the excise tax grows to 34% and 31% respectively by 2019. These numbers overstate the tax’s impact (see the box on page 2). For another, as the JCT analysis shows, over 80 percent of the revenue generated would come not from the tax on insurance premiums itself, but from income and payroll tax revenue on the tens of billions of dollars of higher wages that workers would receive — as employers modified their health plans to avoid the excise tax and converted what they had been spending for health coverage in excess of the tax thresholds into higher wages and salaries. Indeed, one largely overlooked side benefit of the proposal is that by receiving higher wages and paying somewhat more in payroll taxes, most affected workers would qualify for higher Social Security payments when they retire.

JCT reports that most of the affected health insurance plans would not actually pay the excise tax. Employers would modify their health plans to stay within the thresholds for the excise tax, and they would convert the resulting savings into higher wages or other fringe benefits for their employees. JCT estimates that over 80 percent of the revenue raised by the proposal would stem from income and payroll taxes on these higher wages.


Starting in 2013, the Finance Committee bill would impose a 40-percent excise tax on the portion of the value of health insurance coverage that exceeds $8,000 for single individuals and $21,000 for families.<1> In the 17 states with the nation’s highest health insurance premiums, the thresholds would be 20 percent, 10 percent, and 5 percent higher than these national thresholds for the first three years, respectively. The tax would be levied on a non-deductible basis on insurance companies or insurance administrators; it would apply to plans sold in the group insurance market and to self-insured plans but not to plans purchased in the individual market.

Moreover, most of the affected plans and households would not actually pay the excise tax or higher premiums that reflected that tax. The JCT, as well as most economists and health analysts who have examined the proposal, concludes that health insurance plans and employers generally would respond by modifying their health plans to stay within the thresholds and avoid the excise tax; employers would convert the savings produced by modifying the health plans into higher wages or other compensation for employees. (Economic analysis finds that employees ultimately bear the employer share of health care premiums by receiving lower wages than they otherwise would. If an employer with a high-cost insurance plan scales back the plan to avoid the excise tax, the employer generally will move the savings to another form of employee compensation. If employers scaled back health plans to avoid the excise tax without passing the savings through in this manner, they would put themselves at a disadvantage with other employers in competing for workers.)
http://www.cbpp.org/cms/index.cfm?fa=view&id=2957

[doc03]

42. You aren't going to legislate what private industry charges

It is simple their cost go up either the premiums go up or the coverage goes down. The shareholders will get their dividends and the executives will get their millions in wages and bonuses. You actually think the government is going to dictate what they charge, I sure they have lawyers finding loopholes already.

[dkf]

43. You think unions will strike to keep those benefits?

Is this the end result? Forcing serious confrontations and strikes?

[doc03]

45. In today's world strikes don't work, I have never actually

been on strike, I was "locked out" twice for over 14 months total until we agreed to take concessions. I lost three pensions over the years from "lock outs" and bankruptcy proceedings. In both cases the company has the upper hand today.

[flyarm]

46. you have got that right..or the presidents step in and threaten the workers as was the case with my

union in 2001! With an obsolete law from the 1800's!

the American people are being lied to and being sold bullshit!

White House Still Pushing the Excise Tax Hocus Pocus
By: emptywheel Wednesday January 6, 2010 10:56 am

http://emptywheel.firedoglake.com/2010/01/06/white-house-still-pushing-the-excise-hocus-pocus/

snip:

Yet, the White House has not revisited any of the assumptions it has made about the excise tax that seem to be increasingly dubious–such as that it will end up giving workers a raise.

Interestingly, the EPI has just released a paper debunking the claim.

There is logic to , but it is only skin-deep and deeper examination will show it to be simply not true. The logic can be seen looking at trends in health care premiums and wages—wage growth fared better in the late 1990s when health care premiums grew more slowly than in the early 1990s and wages performed poorly in the 2000s, a period when health premiums grew strongly again.

However, digging just a bit beneath the surface reveals the following:

Health care costs are not large enough to substantially move wages as these proponents claim;
Examination of actual wage and benefit trends confirms that changes in the trajectory of health care costs did not materially affect wage trends over the last 20 years; and
The wage behavior described—accelerating in the late 1990s and more slowly thereafter—actually best characterizes wage growth for low-wage workers who have minimal access to employer-based health care. Conversely, this pattern of wage-growth over time is least pronounced for higher paid workers with the most health coverage.
Clearly, this “health care theory of wage determination” is wrong, and other factors explain these overall wage trends. The simple explanation is that productivity accelerated in the mid-1990s, and the low unemployment (and hikes in the minimum wage) facilitated faster wage growth. That this wage growth disappeared entirely in the 2002-07 recovery is not due to faster health care cost increases but to weak employment growth and employers’ ability to achieve increased profitability rather than pass on productivity gains to workers. This reveals a fundamental flaw in our economy: productivity gains are not passed on to higher living standards for workers.

[FrenchieCat]

48. I'm reading up on it.....and I can see both sides, as there seems to be a debate on this.....

But I don't know if folks all truly understand this,
since I just started trying to.

Here is more info.....


The excise tax works in a roundabout way. Under the Senate Finance proposal, insurance companies would have to pay a 40 percent excise tax on health insurance policies that exceed $8,000 for individuals and $21,000 for families. We spoke with three economists on both the left and the right, and they all agreed that insurance companies will not simply absorb the new tax; they will pass it along in the form of higher premiums. Employers will then try to avoid the new higher costs by buying cheaper health plans.

Finally, the economists agreed that if employers have to scale back on health plans, they will eventually pay higher wages as they seek to retain workers. At this point, disgruntled workers may say "Yeah, right," but the economists were adamant that it is the case. Those higher wages are taxable, and that's how it becomes a tax increase for workers. An analysis from the Joint Committee on Taxation, which is nonpartisan and advises Congress on tax policy, confirmed this point. The Joint Committee found that many people affected by this make less than $200,000. (For more details on this Joint Committee analysis, see our report on someone else who doesn't like the excise tax: Sarah Palin.)

So here's what that means: If workers end up getting paid more, they'll also be taxed more.

Another point worth emphasizing is that the 40 percent tax is on the portion of the health plan that exceeds $8,000 for individuals and $21,000 for families. It's not on the whole plan.

We should point out here that many workers have no idea what their health plans cost. How do you know if you have a "Cadillac" plan? If you're sick of paying more and more out of pocket for health care, you probably don't have a Cadillac plan. On the other hand, if you feel like your health plan is quite generous, you might. These are plans that generally have very low co-pays and lots of extras. A Boston Globe report described one plan for state employees in New Hampshire as offering free surgery, low-cost prescriptions, free rehab for alcoholism, a stipend for gym memberships and reimbursements for yoga classes. CEOs have these types of plans, but so do some unionized workers. An economist we spoke with said they are commonly offered by state and local governments and universities, the types of jobs that are said to have "great benefits." Estimates we've looked at suggest that, by 2019, the excise tax would affect as many as 25 percent and as few as 17 percent of all tax filers.

The ad says the proposal is a "40% tax on health care benefits of middle-class workers." But that's an overstatement that fails to mention it's an excise tax that would only affect workers with health care benefits above a certain level. Most middle-class workers won't be affected at all. We rate the statement Barely True.
http://www.politifact.com/truth-o-meter/statements/2009/oct/21/health-care-america-now/excise-tax-cadillac-middle-class/

[flyarm]

52. there is no debate on this..this is being shoved down our throats..

and we are being kept from the table..hell we can't even get it on c-span as promised!

Did Obama lie or are your eyes lying to you?

http://www.breitbart.tv/the-c-span-lie-did-obama-really-promise-televised-healthcare-negotiations/

and do not think for a moment that if union"leaders " go along ..that the union members will ,that get totally fucked by this plan..

you can count on a republican congress and White House if this goes through as written!

[Clio the Leo]

55. Seriously.... that's the best we can come up with?

That he failed to put health care negotiations on CSPAN that no one would have watched anyway?

....... QUICK! What color is the carpet on the Senate floor? I triple dog dare you to tell me without Googeling it. ;)

[flyarm]

61. I don't give a shit what color the carpet is..that won't pay for my health care or that of my

fellow Americans that are losing their homes and everything they have worked for and going bankrupt becuase of medical bills!

Presidents change carpet colors..or their wives do..and that does not affect my health! Or pay my bills or pay for my insurance.

[Clio the Leo]

66. I can guarantee you that the First Lady of the United States....

..... never had any say so about the carpet on the Senate floor .... which is blue by the way..... with kind of a gold fleur de lis pattern.

But I'm a politics nerd who watches CSPAN .... unlike most Americans. :)

[FrenchieCat]

68. Do you know how much your actual insurance premium is?

If so, could you tell us?

I'm curious as to what families actually have a policy premium that's worth over $23,000 per year.

Do you?

[flyarm]

70. yes ..and it is no ones business on a message board what mine cost. eom

[FrenchieCat]

72. Ok.....

So it's possible that your premium is more than $8,500 if you are single,
or more than $23,000 if you have a family....
and more than $26,000 if you are 55 years or older?

Because that is the only time that this "might" affect you....
and then it would be only for the amounts that go over what I have stated up above.

[flyarm]

95. pretty rude question to ask on a message board..and you are over the top with your assumptions! and

out of line in "my opinion"

Because someone won't answer financial and private questions to you on a message board ..is not an invitation to assume anything about another persons coverage or financial obligations or private matters!

I guess a polite.."none of your business".. doesn't mean shit to you! You will just make up any damn thing you want and post it!

[Harry Monroe]

51. "Tax on Health Care Will Erode Coverage for Middle Class"

Tax on Health Care Will Erode Coverage for Middle Class
by Tula Connell, Jan 4, 2010

A new year brings with it lots of hope.

Let’s hope 2010 brings a health care reform bill that does not penalize working families with a tax on their coverage. Because right now, as New York Times columnist Bob Herbert aptly describes it, there is a ”middle-class tax time bomb ticking in the Senate’s version” of the health care reform legislation.

The bill that passed the Senate with such fanfare on Christmas Eve would impose a confiscatory 40 percent excise tax on so-called Cadillac health plans, which are popularly viewed as over-the-top plans held only by the very wealthy. In fact, it’s a tax that in a few years will hammer millions of middle-class policyholders, forcing them to scale back their access to medical care.

Jon Walker at Firedoglake took a look at a report released in December by the Centers for Medicare and Medicaid Services, which found the health care tax “will result in most people getting worse health insurance from their employer, insurance that covers less.” Walker translates the report’s conclusions this way:

Your employer will reduce what your current insurance plan and put in place high co-pays and deductibles. The result is that many people with employer-provided health insurance will see their insurance get much worse. For younger, healthier employees, possibly getting less comprehensive insurance but maybe higher wages (I think it is very doubtful that there is a pure dollar for dollar passthrough), this might be a decent deal. For older, less healthy employees this is a very bad deal. They will be forced to pay much more out-of-pocket for their health care.

More cost, less coverage for working families. Yet portraying the tax as only affecting ”Cadillac plans,” purposely obscures how it will harm America’s working families.

Or, as Herbert puts it:

The tax on health benefits is being sold to the public dishonestly as something that will affect only the rich….

http://blog.aflcio.org/2010/01/04/tax-on-health-care-will-erode-coverage-for-middle-class/

Obama is on his way to being a one term president. He certainly won't get any help from union members (of which I am one) in 2012 and expect Democrats to lose seats this November over this.

[FrenchieCat]

54. I think that article is a little bit slanted....

Do we know what percentage of the population even have these plans?

And no where does it state it is anything OVER $8,000 for individuals (TAXED WOULD BE anything over $670 per month paid on medical insurance premiums FOR A SINGLE PERSON)

or $21,000 (for families) would tax those benefits ON ANYTHING OVER $1,750 PER MONTH, AND WOULD TAX THE INSURANCE COMPANIES NOT INDIVIDUALS, and it will be the insurance companies that will have to pay it.

Everything after that is theory on whether it would be passed on to employers...

and then what "might" happen, and different camps have different theories.

That's what I'm finding out....

The excise tax works in a roundabout way. Under the Senate Finance proposal, insurance companies would have to pay a 40 percent excise tax on health insurance policies that exceed $8,000 for individuals and $21,000 for families. We spoke with three economists on both the left and the right, and they all agreed that insurance companies will not simply absorb the new tax; they will pass it along in the form of higher premiums. Employers will then try to avoid the new higher costs by buying cheaper health plans.

Finally, the economists agreed that if employers have to scale back on health plans, they will eventually pay higher wages as they seek to retain workers. At this point, disgruntled workers may say "Yeah, right," but the economists were adamant that it is the case. Those higher wages are taxable, and that's how it becomes a tax increase for workers. An analysis from the Joint Committee on Taxation, which is nonpartisan and advises Congress on tax policy, confirmed this point. The Joint Committee found that many people affected by this make less than $200,000. (For more details on this Joint Committee analysis, see our report on someone else who doesn't like the excise tax: Sarah Palin.)

So here's what that means: If workers end up getting paid more, they'll also be taxed more.

Another point worth emphasizing is that the 40 percent tax is on the portion of the health plan that exceeds $8,000 for individuals and $21,000 for families. It's not on the whole plan.

We should point out here that many workers have no idea what their health plans cost. How do you know if you have a "Cadillac" plan? If you're sick of paying more and more out of pocket for health care, you probably don't have a Cadillac plan. On the other hand, if you feel like your health plan is quite generous, you might. These are plans that generally have very low co-pays and lots of extras. A Boston Globe report described one plan for state employees in New Hampshire as offering free surgery, low-cost prescriptions, free rehab for alcoholism, a stipend for gym memberships and reimbursements for yoga classes. CEOs have these types of plans, but so do some unionized workers. An economist we spoke with said they are commonly offered by state and local governments and universities, the types of jobs that are said to have "great benefits." Estimates we've looked at suggest that, by 2019, the excise tax would affect as many as 25 percent and as few as 17 percent of all tax filers.

The ad says the proposal is a "40% tax on health care benefits of middle-class workers." But that's an overstatement that fails to mention it's an excise tax that would only affect workers with health care benefits above a certain level. Most middle-class workers won't be affected at all. We rate the statement Barely True.
http://www.politifact.com/truth-o-meter/statements/2009/oct/21/health-care-america-now/excise-tax-cadillac-middle-class/

[Clio the Leo]

56. "Do we know what percentage of the population even have these plans?"

.... I'm wondering the same thing .... and I cant find anything that tells me the answer.

[FrenchieCat]

58. This tax in on anything over a $1,750 premium per month for a family....

A $1,750 per month premium (for a family of 4) would not be taxed....but if you have a $1,755 per month premium, $5.00 of it would be taxed, but the tax would be paid by the insurers.


If an individual, it is about $670 per month premium where the insurer wouldn't pay the tax....
and it is anything over the $670 per month that the excise tax would apply.


We are self employed, and our family of 4 pay $1,200 per month, which includes dental.

[Clio the Leo]

64. thank you....

.... and thank you for this OP. It's been both enlightening and amusing. ;)

[FrenchieCat]

65. actually, that was wrong info......

they've raised it to anything over $23,000, not $21,000 per year.

Ins. Premiums OVER $1,916 PER MONTH PER FAMILY will be subject to a 40% excise INSURER TAX for the portion that goes over the $1,916 PER MONTH!

[Clio the Leo]

69. that evil Obama....

..... taxing those poor insurance companies.... and imposing those medical loss ratio limits on them ..... while the House readies the repeal of the McCarran-Ferguson Act .... what kind of MONSTER did we elect!!!! :wtf:

[flyarm]

71. do you have any idea how much insurance will go up in the coming years?

do you have a crystal ball to know what future congress's or presidents will set those numbers at?

Is there a cap on that amount ..or a system in place in this bill to stop that cap from going down?

I haven't seen any.

[FrenchieCat]

73. You are moving the goalpost.....

And this excise tax allows for a 1% a year increase....

the point is that the system isn't going to stay the same....
the whole point of this reform is to bend the curve on cost.

[SpartanDem]

74. It is indexed to inflation

pg 8

Beginning in 2013, insurance policies with relatively high total premiums would be subject to a 40 percent excise tax on the amount by which the premiums exceeded a specified threshold. That threshold would be set initially at $8,500 for single policies and $23,000 for family policies (with certain exceptions); after 2013, those amounts would be indexed to overall inflation plus 1 percentage point

http://www.cbo.gov/ftpdocs/108xx/doc10868/12-19-Reid_Letter_Managers_Correction_Noted.pdf

[karynnj]

92. Part of the purpose here is to bend the cost curve

Some factors that have caused health insurance to go up so dramatically in recent years are being addressed by this bill. Most notably the raising number of uninsured. In addition to the unacceptable toll this takes on the uninsured, it raises everyone's premiums. This will be much less a factor after the legislation takes effect.

The price is not set by Congress or the President now - or under this bill.

[SpartanDem]

60. 2-4%

There was post on Kos yesterday that went into great detail about the tax.


The Kaiser Family Foundation, in its Employer Health Benefit Survey found that in 2009, the average cost of employer-sponsored coverage for individuals was $4,824 per year, and for families, $13,375 per year. Note that both amounts are little more than half of the prices of health insurance plans where a so-called Cadillac tax would kick in. The survey further finds that that 2% of workers with individual coverage have a plan that costs $8,000 or more in premiums and only 4% of workers with family coverage have plans with premiums greater than $20,000. Given the floor for the Cadillac tax is even higher, $8,500 and $23,000 respectively, a very very very small percentage of workers have plans that are that expensive. In other words, 98% of workers with individual policies from their employers and over 96% of workers with family coverage do not currently fall under this penalty

http://www.dailykos.com/storyonly/2010/1/5/821971/-The-anatomy-of-the-Cadillac-Tax

[Clio the Leo]

63. Thank you. NT

[FrenchieCat]

67. I was looking at that $23,000 premium....

cause I don't know anyone that has that kind of package!

Mine is $14,400 (I pay all of it cause I'm self employed with a family),
and that's $1,200 per month...and that is really high.

So 2% to 4% of premiums will be taxed (the insurer pays the tax),
but it will be on any premium amount OVER the $23,000, not the entire plan!
That's important too!

[uponit7771]

78. *****GREAT EXPLANATION HERE!!!*******

[ShortnFiery]

57. Well, at least you stopped comparing unionized Middle Class Americans to "Marie Antoinette"

Somehow we've NOW landed on somewhat the same plane. :shrug:

[jumptheshadow]

77. "they will eventually pay higher wages as they seek to retain workers."

Huh, yeah. Or they will put an ad on Craig's List, lower their starting salary substantially, and get 200-300 resumes in this Bush economy.

You are cheerleading the destruction of years of hard union work and sacrifice and the deliberate lowering of standards for all American workers.

[flyarm]

59. absolutely..i concur with your comment! In fact I will go further..

My husband was asked to be at his Unions yearly meeting of Union Reps to speak to them about how our union has evolved and when and how they have gotten their benefits..I also got to speak to the young union Reps..and told them that they must stand in solidarity to fight for their benefits and take nothing for granted in this atmosphere of corporatism. What was supposed to be a 10 minute speech turned out to be over 1 1/2 hours of Q&A by the young folks ..and most of the questions were about our health care benefits and pension.

Do not for one moment think the young people aren't paying attention.

Do not think for a moment that the young workers will go along to get along..

They will stand for their rights..and i believe they will fire any union leader that goes along with taking their Health care or watering it down or away! I was so impressed by the young people in that room..they listened and absorbed what was being told to them..and they were solidly standing with an ovation after we got done speaking to them...and after the meeting we were swamped by so many of them asking us more and more questions for several hours! They get what is going on..and they will not give up their benefits with out a damn good fight..and that goes for any politician that does it to them as well!

[flyarm]

62. Employer Mandate, Not Excise Tax, Is The Most Important Funding Mechanism

http://fdlaction.firedoglake.com/2010/01/06/employer-mandate-not-excise-tax-is-the-most-important-funding-mechanism/

Employer Mandate, Not Excise Tax, Is The Most Important Funding Mechanism

By: Jon Walker Wednesday January 6, 2010 10:32 am

snip:
The real employer mandate in the House bill would cause net increase in the number of people with employer-provided health insurance by roughly 6-7 million compared to current law. The Senate’s free rider provision combined with other aspects of the bill would result in a net decrease in the number of people with employer-provided health insurance by 4 million. All told, that is a 10-11 million difference in the number of people with employer-provided coverage between the two bills.

From the perspective of the CBO score, it is much cheaper to have people covered by their employer than through the new exchange. Having individuals gain coverage through their employer costs the bill nothing, but if they get coverage through the exchange (or Medicaid), and they make less than 400% FPL, the government needs to provide them with tax credits. Every person who gains coverage not through their employer adds to the overall cost of the bill.

While the House bill technically costs more, it is, in fact, much more cost effective. It increases coverage for a longer time period, and covers 5 million more people in 2019 than the Senate bill. Much of the House bill’s cost effectiveness comes from the employer mandate.

If the House bill was changed to simply replace its employer mandate with the Senate free rider provision is would dramatically increase the cost of the bill. It would remove roughly a $100 billion in funding and probably increase the net cost by roughly another $100 billion. That increase in cost would be the result of millions of people now getting government assistance to get health insurance, who were previously projected to get coverage from their employer.

While much of the debate about how to pay for the bill will be focused on the excise tax and the millionaire’s tax, this ignores the other critical funding component, the employer mandate. If Democrats really want to increase affordability tax credits, not increase direct “taxes,” and keep the overall CBO price tag low, they have few other choices but to go with a strong employer mandate. Of course, most business groups are opposed to a real employer mandate so the more likely out come is that middle class families will end up getting less help affording the private insurance they are forced to buy. Keep an eye on how the final bill handles the employer mandate, it is the funding sleeper in the current debate.

[flpoljunkie]

80. CBO: Who'll the tax hit by 2016?

Recommended for the discussion this post has engendered.

Who'll the tax hit by 2016?

It is true that a CBO report states that under current law, 19% of employer-covered workers would reach these thresholds by 2016. However, the same report also speculates that

CBO and JCT estimate that most people would avoid the cost of the excise tax by enrolling in plans that had lower premiums; those reductions would result from choosing plans that either pay a smaller share of covered health care costs (which would reduce premiums directly as well as indirectly by leading to less use of covered medical services), manage benefits more tightly, or cover fewer services. Those calculations also reflect an expectation that a large share of enrollees in employment-based plans would be in grandfathered plans throughout the 2010–2019 period.

So according to the CBO, most people would opt for a lower-premium plan to avoid the tax. Those plans would be ones that manage benefits more closely or offer fewer benefits than the previous plan. However, let's also note that the health insurance reform bill from the Senate puts in strong insurance regulations not only for plans in the exchanges but plans offered through employers as well. There is a minimal set of benefits that insurance companies must cover, including no-copay preventive care; there is also an out-of-pocket maximum. In addition, the status quo forces untold numbers of workers to either decline employer-provided coverage or choose cheaper, more high-deductible plans every year.

http://www.dailykos.com/storyonly/2010/1/5/821971/-The-anatomy-of-the-Cadillac-Tax

What is concerning about this is that people would be forced into plans that offer fewer benefits. Would we accept the Senate plan with its 60% minimum benefit standard with a projected cost of $12,042 in 2016. In comparison, the House passed bill includes a 70% minimum benefit standard. (Emphasis mine.)

[flyarm]

94. and more people "with Health care coverage" will be forced into bankruptcy if they get sick than

they do today! eom

[freddie mertz]

81. Of course, there is the added fact that Obama campaigned against this tax.

That was another HCR promise that he "conveniently" forgot once he got into office.

Like the public option and his opposition to forced mandates.

[karynnj]

93. He did not campaign against this

He campaigned against McCain's plan that started taxing at dollar one on ALL employer paid plans - this taxes less than 5% of all plans and starts taxing at $23,000.

[Hello_Kitty]

114. It affects very few plans and yet it will supposedly raise billions of dollars.

And 80% of the billions it will raise will supposedly come from the increased wages of the middle class workers which it supposedly doesn't affect. :crazy:

[joeglow3]

87. Please clarify what you mean by this phrase

"Given the fact that the health insurance companies will be subject to the 85-80/15-20 MLR, they won't be passing this added expense onto the subscriber, or to the employer either....
cause taxes aren't something considered as reducing profits (since it isn't a deductible expense)."

This makes no sense.

[totodeinhere]

113. This makes no sense? That's the whole idea. n/t

[ljm2002]

89. It is not the insurance companies who would pay the tax...

...it is the employers, i.e. those who buy group insurance, who would pay the tax. At 40%, it is a strong incentive not to offer those plans. And, as has been pointed out by others, once they no longer offer those plans, that source of revenue will dry up. Not to mention that the employees who gave up pay raises during negotiations, will lose what they have for lesser plans. And fat, fat chance they'll see an increase of their wages as a result.

But as usual, we have allowed the issue to be framed as "Cadillac plans". Because that plays right into the envy factor, where the majority of people, who do not have such plans, are all too willing to shout "But why should *they* have a Cadillac plan when *I* don't?" And it has worked like a charm, when we see even people here at DU cheering it on.

Finally. It is really interesting that more people don't agree with simply taxing the wealthy to help fund health insurance. I mean, $250K per year is a Cadillac income. $1M a year is what, a Bentley income? I'm not sure how high it has to be for it to be a Rolls Royce income. Of course, those folks will say they worked hard for it (which in some cases is true, but not in all and maybe not even in most cases). But somehow, the fact that union workers fought hard for their benefits and work hard for their wages, that does not count, they should be penalized for getting their "Cadillac plans".

[Hello_Kitty]

125. Furthermore, the surtax on the wealthy WILL raise half a trillion

Unlike the trickle down fairy-dust notions that this excise tax will magically lead to higher wages which will result in over $100 billion higher tax revenues. Somehow. But rich people (and individuals making $500K and couples making $1 million a year qualify as such) will be staying rich for the next several years and a small extra tax on their income will not affect their lives one whit.

[TheKentuckian]

100. The change we want is most certainly not to force the populace to dump

their hard earned and precious few dollars into a health care ghetto funded in no small part by squeezing into non-existence the hard bargained and deeply sacrificed for benefits the lucky few that have some representation are left with after generations of getting the treatment from the robber-barons.

In ten short years the Max Tax will be putting it's squeeze on 19% of the population (with the plan not actually kicking in until 2013-2014?). At that stage we project a leveling off as hammered businesses and individuals are herded into lesser coverage.

So, over time what we do here is squeeze the upper limit of what is obtainable for the masses and eventually all of us in steerage will be stuck with high deductible minimum level coverage for what we hope we can hold down to about 1/2 of the cost of our housing. That leaves us with still with a two tiered system-haves and have nots. As always the wealthy will continue to get whatever they want whenever they want it.

Of course that result is more or less inevitable but the point is how you get there and what the bottom tier looks like. I'd argue that designing it off of shifting costs to the individual and reducing benefits more or less down to guideline minimums with a few differences in "perks" to give the illusion of choice isn't the best approach.

See, the idea here isn't to race to the bottom but lift all ships. This boondoggle of a revenue stream is a political grenade with the pin already pulled that will over time screw over a lot of union and low paid workers out of earned value in pay, benefits, or most likely both and even worse it starts the whole process on the basis of giving many and eventually most a "haircut" on the quality of care and level of cost sharing rather than letting the real winners from Reaganonomics and the Dubya decade pick up the tab.

Just based on the pure principle that the only cost containment effort whatsoever doesn't come at the expense of anyone's profits or flexibility to make profit but right out of the benefits of the average person.

No, I didn't sign up for any change that screws over the people when it is supposed to be making sure we get a fair deal. I'm I willing to sacrifice and compromise to make change a reality? Absolutely, but when the first step you take is to hit up one broke person for a broker one and tell everybody without a silver spoon handy they need to be the ones to take one for the team is unacceptable. No matter how few people are affected this is still a wrongheaded way to approach the issues of making health care accessible and affordable for all.

Also, trying to sell this turkey using failed trickle down economic principles is weak and disgusting to see. After the last thirty years I can't imagine even trying to sell anyone with sense, much less liberals, on the laughable notion that employers will be adding those reductions back into our paychecks and this voodoo economics scam will put us on the road to prosperity and good health.
I honestly find it very difficult to believe that anyone alive and out here scuffling over the last 10, 20, or 30 years would ever let such nonsense be broadcast from their brains. Especially in an era of double digit unemployment that followed a generation of systemic erosion of the middle class while the gap between the wealth and the poor increased dramatically.

You think they will be increasing pay anytime soon when we have like 700 people fighting for a couple of housekeeping positions at a hotel? In 2009 alone I had a 30% pay cut from a fairly low paying job that I had to settle for, found something better only to have that pay cut 10% along with a benefits reduction (not that I had them yet since I was left as temp to hire for 6-7 months, of course), and then let go the very next day.

This ain't the 50's and Reagan was utterly wrong.

Anyone who's purpose is to make quality health care accessable and affordable for the poor, workers, and the middle class would never make this their primary effort and first step towards cost containment. Nor would anyone who wants to strengthen the Democratic party since it is politically unholy fucking stupid to even indicate a willingness to fuck over the unions, workers, and the dwindling middle class.

Why dare these people to stay home rather than advancing their interests or at least pretending to?

[bvar22]

107. Obama absolutely HATED that idea...

...during the campaign:

http://www.youtube.com/watch?v=I8wmN3wvhNM&feature=player_embedded

Did YOU hate the idea of taxing "Cadillac Plans" during the campaign like Obama.

Or, have you just changed your mind because Obama changed HIS position?

[totodeinhere]

112. You got that right.

Some people have a blind no matter what support for everything Obama that just defies logic.

[FrenchieCat]

117. Is it really the "same" taxing plan.....

or should we leave it real simple like and make no distinctions because that
makes it easier to attack?

I'm surprised folks haven't stormed the White House, pulled Obama out of there, strung him up by his toes, and just hang him in the rose garden by now.

I'm sorely disappointed.

[bvar22]

118. Where are your posts praising McCain's Plan to tax health care benefits?

You sure seem to think that it is a great idea now.

When did you have your conversion?

[ima_sinnic]

131. stringing him up by his toes could happen one of these days

maybe not literally, but the natives are getting restless . . . they were played with a bait and switch scam.

[Name removed]

133. Deleted message

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