| Not to get into the argument of have union workers been getting over on the system in the past or is this a middle class tax increase? Above the fold are questions, not answers. These are questions about how the situation will be for states going forward under the Senate finance plan.
There is a huge difference between the House and Senate;
The House measure is paid for through a combination of a tax surcharge on wealthy Americans and new Medicare spending reductions. Individuals with annual incomes over $500,000 -- as well as families earning more than $1 million -- would face a 5.4 percent income tax surcharge.
The Senate bill also cuts Medicare by roughly $500 billion. But instead of an income tax surcharge on the wealthy, it would impose a 40 percent tax on insurance companies that provide what are called Cadillac health plans valued at more than $8,500 for individuals and $23,000 for families.
Proponents of the tax on high-end plans argue that it's one of the most effective ways to curb medical inflation. However, House Democrats oppose taxing such policies because it would hurt union members who traded higher salaries for more generous health benefits.
Since everything written about the final health care push indicates that it will be the Senate version that passes, this method of finance deserves some scrutiny. Due to the fact that states cannot operate in the red for long periods of time like the federal government there have been many Medicaid disasters due to lack of state funding.
Will this become a civil service worker disaster? Following the way teachers, cops, fireman and sanitation workers have had to reach deeper and deeper into their own pockets to help states that are struggling to cover the state workers under excessive cost of health benefits in the past, how long will it be before these workers see inflated insurance cost due to a federal tax?
Now since the Government Accounting Office sees this excise tax as the main source of finance of healthcare reform perhaps somehow it will be a means of cost reduction but with projections of $149 billion in federal revenues it will also be a tax on the workers above the poverty threshold. Will it also be a tax on the states or reduce the quality of life for state workers?
Once again not to get into the politics, the myth of 'Cadillac Care' or arguments about this 'Cadillac Tax' hitting the middle class workers but the situation that this will put blue states in either now or very soon and all states going forward. When this plan was presented by Max Baucus the numbers seemed within reason for many states but even if health insurance starts to keep pace with inflation where will those numbers be five years from now? How about ten years down the road?
I'm not making any claims her at all. These a questions that I've been asking of elected officials at every level of government for the past two days and to the best of my knowledge so far, states will not be exempt as employers and there is nothing to protect against inflation someday making the lowest cost medical insurance policy in the nation from becoming a Cadillac policy.
Do you have anything to add to this inquiry? |
