A Dragon in Sheep’s Clothing

In a major breakthrough, union leaders bowed Thursday to White House demands for a new tax on high-cost insurance plans as part of landmark health care legislation taking final shape in intensive negotiations. “We are on the doorstep” of success, President Barack Obama said.

….The president has told lawmakers he wants the tax on high-cost plans included in the legislation to help rein in costs. But that position courted conflict with labor leaders who fear exposing their membership to higher taxes, as well as with House Democrats who omitted it from the legislation they initially passed.

Someone please explain to me how a big tax makes things more affordable?!

While the tax would be applied to high-cost plans, the Congressional Budget Office has said its principal impact would be to prompt consumers to purchase lower-value coverage. That, in turn, would raise the income tax they pay by reducing the deduction they can take for health care expenses.

Um . . . so people are being squeezed financially if they get plans with more coverage? How does this help?

Wouldn’t this mean that:

1. People who need the health insurance most will end up getting the least coverage available because they can’t afford better coverage, and then when something big happens they’re in the same predicament as if they didn’t have coverage at all; and/or
2. People who would have gotten more coverage will now take a plan with less coverage in order to save money, thus adding to the number of people who may lack the coverage they need for major health situations.

I really don’t see how this helps at all.

Isn’t the cost of health care high enough without adding a tax onto the best plans?

What will taxing the best plans accomplish? I see it hurting consumers who are already hurting because of the economy.

The mindset of the country has changed; people are spending less and saving more. The immediate future is no longer as certain as it seemed three or four years ago, and this has changed people’s habits. They buy store brands instead of name brands. They pack lunch instead of eating out. They shop at lower-priced stores or buy less of their most expensive items.

Now health care is being tossed into the equation. How many people will go for “dollar store” health coverage? How many will see their coverage go down because they can’t afford the tax on plans that match their old coverage?

….all health plans — union and nonunion — would be permitted to seek coverage in insurance exchanges that would be set up under the bill to allow consumers to shop for coverage issued under federal regulations. 

By the way, a federally regulated insurance exchange is still unconstitutional. I sincerely hope states stand up and take their powers back if this goes through.

Quotes from AP via Yahoo News