Taxing Health Insurance
Under the Senate Finance Committee’s modified chairman’s mark, beginning in 2013, all plans (with a few exceptions) that cost more than $8,000 for individuals and $21,000 for families would be subject to a tax of 40% on the excess. Although the tax would be imposed on insurance providers and employers, the burden would be passed on to consumers. This is from the Joint Economic Committee Minority:
If companies seek to maintain absolute profit levels by increasing premiums, the high cost tax of 40% will not only add $1,600 to the cost of a $25,000 plan, but the added $1,600 to the cost of the plan will then be subject to the high cost tax, which will add another $640 to the plan’s cost. This cycle of tax increases followed by premium increases will result in a total increase of $2,667 to a $25,000 plan. Under this scenario, the result is that the stated tax rate of 40% would translate into an effective tax rate of 67%.
Breaking yet another “no tax” pledge by Obama.
The Baucus bill makes it illegal to be uninsured and taxes people who don’t buy insurance.
Now the bill also taxes people who buy too much insurance…
I can hardly wait to see what’s next.
More taxes, Brian. More taxes.
Taxing employer-sponsored health coverage is fine as long as the tax is offset by a uniform credit and HAS deposits are tax deductible.
If Democrats want to fine people who forgo coverage, why do they insist that everybody buy comprehensive coverage? Free riders that foist unpaid medical bills on hospitals and taxpayers could be reduced by merely requiring high-deductible coverage.
The tax is apparently tied to the plan rather than the individual.
Does this mean that the well-connected can avoid the tax by purchasing a standard sub-$8K plan, and then supplement it by stacking on one or more sub-$8K top-up plans?
Bart, I like the way you think…
I don’t think they really care about free ridership. The only reason they even mention it is as an “…and besides…” argument to bolster the real reason for the individual mandate, which is to force participation in the proposed 2:1 banded risk pool.
To me it’s silly, since we’ve had a limited form of community rating and guaranteed issue since WWII, backed by a partial mandate for type of coverage “if offered” and a generous tax break. Fear of losing creditable coverage status functions as an additional penalty, taking the place of a more draconian individual mandate. Why not simply build on what works?
The left are huge hypocrtics when it comes to their fake demonization of private insurance. In fact, they want to give them millions of new customers thru their Individual Mandate and a national Monoploy markert thru there so-called “exchange”!
Contrary to popular opinion in the media, the Individual Mandate, not the so-called public option is the key to stopping Obamcare in its tracks. Stop the Individual Mandate and the whole bill will unravel for lack of funding and mandatory participation in the scheme!
This is a very dangerous period because Nationalization will still occur even without an overt government run insurance plan like this “public option” provision everyone keeps fixating on – Wyden/Bennett and the Bacus bill are prime examples of this.
Individual Mandates to buy private insurance sound like a “free market” solution and “individual responsibility” but in this context they are not – they are simply a front for a government run system. Many conservatives can be easily fooled by this faux “private” front (Mitt Romney was) .
Here are the core elements what will be contained in the “health care reform compromise” after the so-called “public option” is in all likelihood dropped:
(a) Federal Regulation aka HEALTH CZAR/DEATH PANELS
(b) Employer/Individual Mandates aka NATIONAL HEALTH INSURANCE
(c) Government Subsidies aka MIDDLE CLASS MEDICAL WELFARE
With the Federal Government setting the rules, forcing everyone to participate, and is paying the bills for most of the middle class through subsidies how is this anything other than Nationalization?
Obamacare or any other plan that constains Individual Mandates is a corrupt bargain that benefits DC Politicians, Big Union, Big Industry, and Big/Nanny Government. The losers that get stuck with the bill and socialist medicine are the young, the elderly, the taxpayer and small business.
Its amazaing how stupid the left really is – they dont even know when they are being scammed lol!
Breaking yet another “no tax” pledge by Obama.