Opposition to the Democrats’ health care reform plan has created some strange bedfellows, with the Hard Left and the Hard Right frequently working together. Here’s on that I didn’t expect: NYT columnist Bob Herbert attacking the plan from the Right.
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.
[…]
The tax on health benefits is being sold to the public dishonestly as something that will affect only the rich, and it makes a mockery of President Obama’s repeated pledge that if you like the health coverage you have now, you can keep it.
Given how thin the promise that only those making over $250,000 would pay more taxes under Obama turned out to be — and almost immediately — this shouldn’t surprise anyone.
The bills that have made their way through Congress, especially the House version, have long struck me as Trojan horses. The numbers are such that there are only two alternatives. Either, as Dave Schuler frequently argues, the bills demonstrate how fundamentally stupid Members of Congress are on economic matters. Or, as I suspect, they know damned well that the numbers don’t add up and the whole point is to destroy the present insurance-based system by stealth.
