Why the Health Care Rush?

[shagdrum]

Why the Health Care Rush?
Democrats don't think their bill can stand public inspection.

If sharks stop swimming, they sink and drown. President Obama seems to view his health-care program the same way. "If we don't get it done this year," he said in a recent pep talk to supporters, "we're not going to get it done." Well, why? If laying "a new foundation" for 18% of the economy really is as important as the President claims it is, then surely it could withstand more than fleeting inspection.

Instead, Democrats are trying to rush the largest entitlement expansion since LBJ into law with a truncated debate and as little public scrutiny as possible. At this point all they've released are the vaguest "policy options," not concrete specifics. Yet the Senate plans to begin marking up legislation next week, maybe hold a hearing or two, then have something to the floor by the end of the month, votes by the August recess and a bill to the Oval Office by Thanksgiving. On the seventh day, they will rest. Mr. Obama had 24 Senate Democrats over for a White House chat yesterday to drive the calendar ahead.

It's not hard to see why Democrats are trying to hew to this full-speed-ahead timetable. Their health overhaul will run up a 13-figure price tag at a time when spending and deficits are already at epic levels and hook up the middle class to an intravenous drip of government health subsidies for generations to come. These are not realities that Democrats want the American people to mull over for very long.

This is especially true for the majority of Americans who are generally satisfied with their coverage and doctors but worried about cost. They might get scared off if they were allowed the chance to realize that Democrats will do almost nothing to restrain rising health spending. Based on the leaks so far, this year's legislation will hone in on traditional liberal concerns of social equity -- covering the uninsured.

This shell game found its apotheosis yesterday in "The Economic Case for Health Care Reform," from the White House Council of Economic Advisors, which argues that slowing the growth rate of U.S. health costs by 1.5 percentage points would increase real GDP by more than 2% in 2020 and nearly 8% in 2030. But it presents no plan for actually slowing the growth rate of U.S. health costs. Christina Romer's study is a political argument disguised as an economic one in favor of a "reform" that doesn't even exist yet. And in any case, if we're talking about the state of the economy decades hence, why does health care absolutely have to pass this year?

Part of the need for speed comes from the fact that "stakeholders" -- doctors, hospitals, insurers, pharmaceutical and device makers, etc. -- still seem to be experiencing Stockholm Syndrome. Democrats have so far succeeded in conjuring an illusion of political inevitability, which has kept industry groups in line lest they be shut out of the negotiations. But once the policy details of Mr. Obama's new foundation are poured -- above all for a public insurance program run by the government that will run private carriers out of the market and eventually fix medical prices -- even shell-shocked CEOs might stir up their courage to resist. Democrats are of course acutely aware of how industry opposition chewed through HillaryCare in 1994.

The reality is that Democrats are contemplating the most sweeping restructuring of the health markets since Medicare in 1965, and they don't want to let the details slow them down. Or to be more precise, they don't want to let the details let others slow them down. Better to grab what they will portray as a major domestic achievement while President Obama is at the height of his popularity and before anyone understands what it will mean in practice. The consequences and the cost can be explained later.

 

[04SCTLS]

This calls to mind the old adage about sausage-making: it's best left unseen. ...

Obama wants to "Win" and this is how he's playing the game.

 

[luxuryrules]

They're playing to all the pansies that are writing into the office with pity stories about "I'm broke and can't afford health care and need something to happen now." Instead of telling such individuals to get educated and get a job, the politicians are rushing to 'save' their constituency from the 'evil' of paying for health care....

 

[04SCTLS]

HEALTHCARE
Medical bills play a role in 62% of bankruptcies, study says

Email Picture

Jim Watson / AFP/Getty Images​

President Obama meets with Senate Democrats to discuss healthcare at the White House. A study by Harvard researchers showing an increase in bankruptcies in which medical bills were a contributing cause could give Obama's bid for healthcare reform a boost.


Findings by Harvard researchers show that medical-related bankruptcies have increased from 55% in 2001. The report could boost Obama's bid for healthcare reforms.

By Lisa Girion
June 4, 2009

http://www.latimes.com/business/la-fi-medical-bankruptcy4-2009jun04,0,4193398.story

President Obama's push for healthcare reforms gets a boost today from a new study by Harvard University researchers that shows a sizable increase over six years in bankruptcies caused in part by ever-higher medical expenses.

The study found that medical bills, plus related problems such as lost wages for the ill and their caregivers, contributed to 62% of all bankruptcies filed in 2007. On the campaign trail last year and in the White House this year, Obama had cited an earlier study by the same authors showing that such expenses played a part in 55% of bankruptcies in 2001.

Medical insurance isn't much help, either. About 78% of bankruptcy filers burdened by healthcare expenses were insured, according to the survey, to be published in the August issue of the American Journal of Medicine.

"Health insurance is not a guarantee that illness won't bankrupt you," said Steffie Woolhandler, one of the authors, a practicing physician and an associate medical professor at Harvard.

"Lots of health insurance comes with big co-payments, deductibles and uncovered services," she said. "So you can be insured and still end up with big bills. At the same time, even if you have good insurance through your employer, you can lose it if you get sick and can't work."


Most people who filed medical-related bankruptcies "were solidly middle class before financial disaster hit," the study says. Two-thirds were homeowners, and most had gone to college.

The study does not suggest that medical expenses were the sole cause for these bankruptcies, but it does identify them as a contributing factor. The increase in such filings occurred despite a 2005 law aimed at making it more difficult for individuals to seek court protection from creditors.

And the latest study probably understates the current burden of medical expenses because it is based on bankruptcies filed before the recession hit.

The findings by a team of Harvard researchers from the law and medical schools are expected to help fuel the debate over what type of healthcare system is right for the U.S.

In a letter Wednesday, Obama made another push for a healthcare overhaul, reiterating his concern about the financial burden the current system places on families and businesses.

"Soaring healthcare costs make our current course unsustainable," he wrote in the letter to Sens. Edward M. Kennedy (D-Mass.) and Max Baucus (D-Mont.), who are leading efforts to develop healthcare legislation. "It is unsustainable for our families, whose spiraling premiums and out-of-pocket expenses are pushing them into bankruptcy and forcing them to go without the checkups and prescriptions they need."

Momentum has been growing in Congress for healthcare reform. Such change can't come soon enough for Mary McCurnin.

She and her husband, Ron, filed for bankruptcy and nearly lost their home near Sacramento after a series of medical crises, including her breast cancer and his open-heart surgery. Ron, 63, lost his insurance coverage when the company providing it lost its California license after paying 10% of his hospital bills. Mary, 59, managed to get on Medi-Cal after they "went broke."

Despite the ordeal, she said, the self-employed illustrators feel fortunate that they survived and managed to hang on to their home. "The healthcare industry is killing people," she said. "There's no other way to put it. We just got lucky."

Linda and Jeffrey Somach pay $800 a month for health insurance. But the Staten Island, N.Y., couple filed for bankruptcy a month ago when their out-of-pocket medical expenses surpassed $40,000.

Linda Somach, a psychologist, can earn $80,000 a year if she sees patients full time. But she had to scale back to care for Jeffrey, who has terminal brain cancer. That reduced their income. At the same time, she is constantly getting bills for out-of-network charges, deductibles and medical care that their insurance doesn't cover.

"We put so much of the medical stuff on credit cards," she said. "My patients do it too."

The study suggests that such plights are routine.

Woolhandler is on the board of Physicians for a National Health Program, a group that advocates for a single-payer system, in which government, not private insurers, brokers healthcare. She said the study showed that private insurers had failed in their core mission: protecting consumers from financial ruin in the event of a medical crisis.

"We need to rethink health reform," Woolhandler said. "Covering the uninsured isn't enough. Reform also needs to help families who already have insurance by upgrading their coverage and assuring they never lose it."

A spokesman for private insurers said the industry recognized that uncovered and expensive medical care imposed a burden on families and businesses. But he said that private insurers were in a better position to rein in spiraling medical costs and that the industry had a plan for protecting people from being forced into bankruptcy over medical expenses not covered by insurance.

"In fact, in our comprehensive reform proposal we recommended in December that Congress should look at an out-of-pocket spending cap and a system of tax credits for low-income people," Robert Zirkelbach, a spokesman for America's Health Insurance Plans, a Washington, D.C.-based trade group.

"If an individual's health expenses reached a certain level, there could be tax credits or other assistance to help those individuals," he said.

The study found that medical-related bankruptcy filers with private insurance reported average medical bills of $17,749. By comparison, people who filed for bankruptcy without insurance reported average medical expenses of $26,971.

Individuals with diabetes and neurological disorders, such as multiple sclerosis, had the highest medical bills, averaging $26,971 for those with insurance and $34,167 for those without. Hospital bills were the largest expense for about half the families that filed health-related bankruptcies.

________________________________________________________________

A family healthcare plan is now pushing 1000.00 a month and even that seems inadequate to cover all contingencies.
Personal bankruptcy due to medical bills is unheard of in countries with universal healthcare.

Instead of telling such individuals to get educated and get a job, the politicians are rushing to 'save' their constituency from the 'evil' of paying for health care....

The people above had healthcare but still got put into the poor house
by the American for profit insurance system.

 

[Frogman]

I still think there should be a punishment free (no extra taxes) option for people who don't want to be on part of the socialized healthcare idiocy.

You want to be on Socialized health care? Fine. You go with your bad self.

But some of us have seen socialized healthcare, and I'll take my chances in the private sector. Let me choose my own healthcare plan, from the private field, don't tax me extra for it, and we'll be good to go. Of course, we know that'll never happen.

 

[04SCTLS]

I think there should be some form of universal health care with catastrophic protection and people being able to buy extra insurance for better and/or faster service.

That is usually refered to as 2 tier healthcare.

I predict something along these lines will come to be.

 

[KD00LS]

I think the socialized health care should be based on merit. You HAVE to work in order to get it, and the longer you work the better your benefits get. I think it would encourage people to stop feeding off of welfare. Simple stuff starts out free but the non threatening stuff still costs money etc etc. We actually had a discussion about this in my history class today.

 

[shagdrum]

I think there should be some form of universal health care with catastrophic protection

We already have that. You cannot be turned away from an emergency room because you cannot pay.

Also, it should be pointed out that the massive increase in healthcare costs can be tied to more and more government intervention and excessive/frivolous litigation. Why would increasing government's role now make things better when it has historically made things worse in this country?

A two tier system will crowd out private insurance while greatly driving up costs, reducing the quality of care for most and reducing any incentive for creation of newer, better medical procedures, techniques, etc.

There is also the fact that once the government runs your healthcare, individual liberty is effectively abolished because they can control ever aspect of your life on the justification that it provides and added cost to the health care system. It puts too much power in the hands of corrupt politicians.

The government has no business being involved in the healthcare industry (though they already control a huge chunk of it). We need to be moving away from government involvement in healthcare, in any forum. Medicaid is already going bankrupt and we would simply be multiplying the reach and effects of those type of unsustainable programs many times over. We would kill individual liberty and would end up unnecessarily causing a lot of suffering and death.

 

[04SCTLS]

We already have that. You cannot be turned away from an emergency room because you cannot pay.

I was refering to protection from huge catastrophic medical bills.
People may not be turned away but wind up being bankrupted.

A two tier system will crowd out private insurance while greatly driving up costs, reducing the quality of care for most and reducing any incentive for creation of newer, better medical procedures, techniques, etc.

In Canada the fear of a 2 tier system was just the opposite of your opinion.
Bureaucrats felt that government care would become substandard to that gotten
by people who could pay more.
Talented doctors would offer private services to the well heeled leaving the bottom of the barrel for the masses.
Essentially that now happens on a small scale when Canadians pay out of their own pockets to go to the US for medical care that the canadian governments do not reimburse for.

There is also the fact that once the government runs your healthcare, individual liberty is effectively abolished because they can control ever aspect of your life on the justification that it provides and added cost to the health care system. It puts too much power in the hands of corrupt politicians.

In Canada they can't cut you off access to healthcare for any reason including lifestyle choices whereas in the US private insurance companies can decide to not cover your claims and bills if they get large for a variety of reasons.
To keep insurance costs down businesses in the US can discriminate against smokers and overweight people by not hiring them or running them out of the company if they don't "shape up".

We would kill individual liberty and would end up unnecessarily causing a lot of suffering and death.

I suppose some death is the ruthless answer to high health care costs.
If only the costly people would fall on their swords for the good of the country (Just kidding)

 

[luxuryrules]

There is also the fact that once the government runs your healthcare, individual liberty is effectively abolished because they can control ever aspect of your life on the justification that it provides and added cost to the health care system. It puts too much power in the hands of corrupt politicians.

In all fairness (and, again, as much as I hate to say it), there is a silver lining to that hypothetical: the governments of Germany and Japan are starting to force their populations to lose weight and lead healthier lifestyles. I don't think that much power should be in the hands of any politicians, corrupt or not, but we can plainly see that much of America's population could stand to lose a lot of weight.

Consider that next time you're out and about and you see somebody in the range of about 300lbs stuffed into some skintight clothing they should not be allowed to wear

EDIT: but I do want to make clear that I do NOT support in any way shape or form, government intervention in healthcare. I just wish there was more motivation for people to stay in shape.

 

[fossten]

I was refering to protection from huge catastrophic medical bills.
People may not be turned away but wind up being bankrupted.

Somebody pays for that. You're advocating that others pay. That's socialism.

 

[04SCTLS]

Somebody pays for that. You're advocating that others pay. That's socialism.

There should be a seperate insurance clause to cover this.
The basis of insurance is policy holders pay a small amount to cover those who have the misfortune of having to make a claim.

It's really no different than a house insurance policy except the government would pay the premium.

I believe that's how it works in countries with universal healthcare.

 

[fossten]

There should be a seperate insurance clause to cover this.
The basis of insurance is policy holders pay a small amount to cover those who have the misfortune of having to make a claim.

It's really no different than a house insurance policy except the government would pay the premium.

I believe that's how it works in countries with universal healthcare.

It's not economically feasible. Somebody still pays for it. That's socialism.

 

[04SCTLS]

So short of people falling on their own swords what do you think should be done.
You seem pretty ruthless sometimes or is that just a part of your screen personna.
Helping the poor is a tenet of every religion so how do you reconcile the paradox of rugged individualism with helping one's fellow man.

 

[Calabrio]

The problem is simple economics, then compounded by bad government.

It has to do with the effects of government involvement through programs like Medicaid that have effectively driven up the cost of the products. And it comes from low deductible insurance policies that give the consumer the perception that the service is free, thus encouraging greater use and waste.

When the consumer pays a low price for a product, they use it more, reducing the supply.
When the supply is limited, the price goes up.
But when the government or employer paid insurance incurs the full cost and the consumer doesn't see the cost, they continue to use the premium as though it were cheap, spiraling costs up.

It's made worse by all the regulation in the insurance industry. You can't "just get" a simple insurance policy. State regulations mandate that stripped down policies are unavailable or very hard to get. They MUST include coverage that you may not want.

And then you also have the costs of the uninsured who don't pay factored in.

And then you have the incredible insurance costs of medical professionals.

The system is broken. The answer isn't to add greater layers of government and move the expense FURTHER away from the consumer. That's the exact OPPOSITE of what needs to be done.

Health care needs to be the responsibility of the individual. The same supply and demand, basic economics that dictate or private lives and purchasing need to be involved in this process too. Health insurance shouldn't be used to pay for everything, but focused on catastrophic events.

 

[fossten]

So short of people falling on their own swords what do you think should be done.
You seem pretty ruthless sometimes or is that just a part of your screen personna.
Helping the poor is a tenet of every religion so how do you reconcile the paradox of rugged individualism with helping one's fellow man.

Ah, therein lies the flaw in your reasoning. I've never, ever spoken against helping one's fellow man, only against the government stealing from me. Helping one's fellow man should be an individual, voluntary act, not forced.

You advocate government-forced assistance where the Fed takes from me and gives to someone else, after wasting half of it on pork and administrative costs.

I find it ironic that the very people who believe in evolution and survival of the fittest also advocate that everyone must be forced to sacrifice to assist those who refuse or are unable to survive on their own merits. Speaking of a paradox...

 

[shagdrum]

In all fairness (and, again, as much as I hate to say it), there is a silver lining to that hypothetical: the governments of Germany and Japan are starting to force their populations to lose weight and lead healthier lifestyles. I don't think that much power should be in the hands of any politicians, corrupt or not, but we can plainly see that much of America's population could stand to lose a lot of weight.

Key word there; force. That again goes to my point of this destroying individual liberty.

 

[luxuryrules]

Key word there; force. That again goes to my point of this destroying individual liberty.

I agree. Except with the freedom of making one's own decisions lies the responsibility to live with the consequences of said decisions. Given the freedom (and means) to eat themselves into oblivion, Americans have overwhelmingly decided to do so, much to the detriment of their own health. The broken system allows them to do so, copay their triple bypasses and liposuctions so they can continue to overeat under the impression that their health care is cheap because their insurance shields them from it.

Now here's the kicker: the government doesn't allow discrimination based on factors like weight to factor into hiring (and thus, eligibility for health care), so the people who behave irresponsibly are further shielded from the consequences of their actions.

And so, we loop back around to where you will find yourself in agreement with me, I believe. Instead of having the authorities policing waistlines (because, as I said above, I don't advocate any body having that type of authority and you don't either), the authorities should simply allow employers to factor weight (and thus, health care cost) into the hiring equation and give people motivation to lose weight themselves by allowing simple economics to work. Less government intervention, not more, but should yield the same result.

 

[Calabrio]

Less government intervention, not more, but should yield the same result.

To take it a step farther, we need to move away from a system where people expect others to supply their health care costs and assume full responsibility for it. People should buy their own insurance or pay their own costs, and not have a system that gives tax advantages to employers who do it, but not the individual.

That way, you won't be denied a job for being fat.
But you have to deal with the burdens of your heath care costs.
And the government has nothing to do with it.

 

[04SCTLS]

Business groups wary of first draft of health care bill

By John Fritze, USA TODAY
Business groups reacted warily Sunday to the Senate's first stab at overhauling the nation's health care system, a rift that could complicate President Obama's goal of achieving bipartisan support for his top domestic priority.
Meanwhile, a key Republican in the health care debate said via Twitter on Sunday that he thought Obama had "nerve" to pressure Congress for quick action while he was traveling in Europe.
After weeks of behind-the-scenes negotiations and friendly exchanges, debate over health care appeared to fall into familiar territory after a draft proposal by the Senate Health, Education, Labor and Pensions Committee began circulating late last week.
"It's nice to have all these bipartisan meetings," said Julius Hobson, a Washington lobbyist for physicians and hospitals, "but when you get down to the actual writing, that's where it (can) start to fall apart."
Criticism of the draft comes during what Obama has called a "make or break" time for health care. The president has said he hopes to sign legislation by October, but business groups say provisions of the draft bill are too far-reaching for broad support.
"If this were the bill, I think we would be compelled to oppose it," said Neil Trautwein, vice president of the National Retail Federation.
Among the potential stumbling blocks:
•The measure includes a government-run insurance program that would compete with private insurance companies, an idea that Obama supports but that Republicans, including Senate Minority Leader Mitch McConnell of Kentucky, have opposed.
•Most employers would be required to provide health insurance to workers or pay a penalty. "We're trying to get that out of there," said Hank Cox, a spokesman for the National Association of Manufacturers.
•The cost of expanding health coverage, which could be more than $1 trillion, has become a key issue. The draft does not address how changes would be paid for.
"It's no secret that the biggest sticking points will be the so-called public option and the employer mandate," said Randel Johnson, a vice president of the U.S. Chamber of Commerce.
Anthony Coley, a spokesman for Senate committee Chairman Edward Kennedy, D-Mass., called the proposal "a draft of a draft." The Senate Finance Committee is writing a separate bill that business groups such as the chamber expect will be less sweeping.
Obama has pushed hard for the public-financed option in recent days, including in a letter last week to Democratic senators.
"The president and many others believe that the availability of a public option alongside private options … is a positive thing," White House adviser David Axelrod said on CBS' Face the Nation.
Sen. Chuck Grassley of Iowa, the top Republican on the Senate Finance Committee, said via Twitter that Obama had nerve to call for prompt action while "sightseeing in Paris."
White House spokesman Reid Cherlin said Obama, who returned to Washington on Sunday, is "gratified that the Senate is working hard" on health care and that he looks forward to working with members "upon his return from the commemoration of Allied heroism at D-Day."
______________________________________________________________

I find it ironic that the very people who believe in evolution and survival of the fittest also advocate that everyone must be forced to sacrifice to assist those who refuse or are unable to survive on their own merits. Speaking of a paradox...

Touche :F
I thought survival of the fittest was a conservative tenet.


Businesses don't want to be stuck with the health care bill.
Currently about 25% of our employees have employer provided coverage for which they pay half.
We have some smokers and a few moderately overweight employees
but no big butt fatties.
If business is forced to pay for more or all of employee healthcare no one will hire "portly" people who are a large(pun intended) part of the population.
This is why I think there will be a 2 tier system that will emerge out of this.
The private healthcare system is too flawed to continue.

 

[shagdrum]

I agree. Except with the freedom of making one's own decisions lies the responsibility to live with the consequences of said decisions. Given the freedom (and means) to eat themselves into oblivion, Americans have overwhelmingly decided to do so, much to the detriment of their own health. The broken system allows them to do so, copay their triple bypasses and liposuctions so they can continue to overeat under the impression that their health care is cheap because their insurance shields them from it.

So...they shouldn't have the option to "eat themselves into oblivion" if they want?

You can't expect perfection from freedom. But the fact that any potentional "silver lining" comes through force by the government negates it as a silver lining.

Now here's the kicker: the government doesn't allow discrimination based on factors like weight to factor into hiring (and thus, eligibility for health care), so the people who behave irresponsibly are further shielded from the consequences of their actions.

Again, why shouldn't people have the option to do as they please, even if it is not to their benefit? It isn't the place of the government to make those type of decisions for people.

Instead of having the authorities policing waistlines (because, as I said above, I don't advocate any body having that type of authority and you don't either), the authorities should simply allow employers to factor weight (and thus, health care cost) into the hiring equation and give people motivation to lose weight themselves by allowing simple economics to work.

Businesses already do that. They are not prevented from discriminating except in the case of certain protected classes.

Less government intervention, not more, but should yield the same result.

Social engineering, no matter who undertakes it, is morally wrong and, according to Thomas Sowell, fallacious. Specifically, it is something he calls the "chess-piece fallacy"; assuming that some authority can achieve desired results as though he were moving chessmen on a board, ignoring people’s desires and incentives

 

[shagdrum]

A two tier system has already been shown, in other countries, to crowd out private industry and drive up costs (the same what medicare and medicaid drive up costs here in America). In the long run it, it sets up a two class system for healthcare where you have an elite (aristocracy) who can actually afford private coverage and get quality healthcare, while the rest get unnecessarily poor and inadequate healthcare that causes unnecessary suffering and death. Thomas Sowell lays out the basic economic reasons for this very simply when he says in his book, Economic Facts and Fallacies:

Why do economic transactions take place at all and what determines the terms of those transactions? The potential for mutual benefit is necessary but not sufficient, unless the transaction terms are in fact mutually acceptable. Each side my of course prefer terms that are especially favorable to themselves but they will accept other terms rather then lose the benefits of making the transaction altogether. There may be may be many terms acceptable th one side or the other but the only way transactions can take place is if these sets of terms acceptable to each side overlap.

Suppose that a government policy is is imposed, in the interest of helping one side...Such a policy means that there are now three different parties involved in these transactions and only those particular terms which are simultaneously acceptable to all three parties are legally permitted. In other words, these new terms preclude some terms that would otherwise be mutually acceptable to the parties themselves. ​

These lost transaction opportunities lead to either less actual transactions or and/or increased prices. That is what has happened in this country in the case of medicare and medicaid and what would happened on an even greater scale in a two tier system. In short, a two-tier system has only ever been a way to expand government control of people's healthcare and, eventually, lead to socialized medicine for all. It is a Trojan horse for socialized medicine, nothing more.

Moving, in any way, toward more government intervention is a recipe for disaster. We need to be moving in the opposite direction if you want to make healthcare more affordable; away from government intervention.

 

[luxuryrules]

So...they shouldn't have the option to "eat themselves into oblivion" if they want?

They should. They should also have to pay the price. That's what I'm advocating.

Businesses already do that. They are not prevented from discriminating except in the case of certain protected classes.

Maybe it varies by state? I know here where I am, if a business rejects an applicant on the basis of weight, that is not legal. You didn't learn that in Business Law?

 

[shagdrum]

They should. They should also have to pay the price. That's what I'm advocating.

That makes more sense. But still, it should remain in private hands, not in government's hands (something you seem to agree with).

Maybe it varies by state? I know here where I am, if a business rejects an applicant on the basis of weight, that is not legal. You didn't learn that in Business Law?

It may vary by state. But, many jobs (especially lower, entry level jobs) require you to go through a physical before you get the job (likely due to being more physically intensive). While they would never admit to discriminating due to obesity, nothing is stopping them. I have also heard of some jobs making the premiums higher for people who are overweight to a certain degree.

If you are talking about people who get a job then later become overweight, that may be a little different.

 

[04SCTLS]

Health insurance ‘haves’ to pay for ‘have-nots’?

Senate considers curbing tax-free status of employer-provided benefits

Senate Finance Committee Chairman Max Baucus, D-Mont., is searching for tax revenue to help pay for an overhaul of America's health insurance system.

By Tom Curry
National affairs writer
msnbc.com
updated 6:38 a.m. ET, Mon., June 8, 2009


http://www.msnbc.msn.com/id/31106408/


As part of a health insurance reform package now before Congress, some of the 164 million Americans who are covered by employer-provided health plans could be asked to give up at least part of the longstanding tax exemption granted to such compensation.It’s an idea likely to be met with howls of opposition if it makes it into the final version of health insurance legislation that President Barack Obama is pushing.
The idea of limiting the tax break for employer-provided insurance gained momentum last week, when Obama told senators that he’d consider it as one ingredient of the health insurance reform bill he wants Congress to pass by early August, when the Senate starts a one-month recess.

Senate Finance Committee Chairman Sen. Max Baucus, D-Mont., who conveyed Obama’s willingness to consider the idea after a White House meeting Tuesday, has said the tax treatment of employer-provided health insurance ought to be made “fairer and more equitable for everyone.”
Will you end up with more taxable income?
While details of such an approach are still sketchy, it would likely involve employees paying tax on a percentage of their employer-provided health benefits. So if Congress decided that all such premiums in excess of $11,000 for family plans would be taxable income, and your company paid premiums worth $16,000 for your coverage, you’d have to pay taxes on $5,000.
Obama’s new openness to the idea stands in contrast to what he said six months ago as a presidential candidate, when he harshly criticized his Republican rival, Sen. John McCain, for proposing that employer-provided benefits should be taxed.
Scolding McCain in their debate on Oct. 15, Obama said, “This is your plan, John. For the first time in history, you will be taxing people's health-care benefits.”

Obama also pledged last year not to raise taxes for families making less than $250,000, and a health benefits tax, depending on how it was structured, could run afoul of that promise.
The tax exemption on employer-provided health insurance, which dates to 1943, has already survived one attempt to limit it.
An echo of Ronald Reagan
In 1984, President Ronald Reagan floated the idea of requiring workers to pay taxes on employer contributions to their health insurance exceeding $2,100 a year. A Washington Post editorial the following year called the proposal “surprisingly lucrative yet eminently fair,” and speculated that “(it) might have helped hold down health care costs in the bargain.” But opposition, especially from labor unions, scuttled the proposal.

Obama’s new receptivity to the tax springs from the massive sums of money needed to pay for expanding health coverage to the uninsured.
Obama’s Council of Economic Advisors last week cited a figure of about $125 billion a year to insure the uninsured. But the president aims to do more than that. He also wants to subsidize the cost of coverage for lower-income people, subsidize COBRA coverage for those who lost their jobs and make other changes.
MIT economist Jonathan Gruber told the Finance Committee last month that curbing the health insurance tax break was “both the most natural source of financing for health care reform” and “one of the few that is clearly large enough to finance the subsidies needed for reform.”
According to the congressional Joint Committee on Taxation, the Treasury misses out on $226 billion a year because employer spending on health insurance isn’t counted as taxable income.
That figure dwarfs any other potential health-related revenue sources that have been identified as possibilities to help fund the health care expansion. Among them are a 3-cent-per-can tax on sugar-sweetened beverages, which the Congressional Budget Office estimates would raise about $50 billion over 10 years, or increasing taxes on beer, wine and distilled liquor which, under one CBO scenario, would raise $60 billion over 10 years.
A boon for upper-income people
According to an analysis by the Joint Committee on Taxation, curbing the tax break for employer-provided health insurance would primarily affect the wealthy, who “receive the greatest tax benefit from the exclusion from income.” According to Gruber, “about three-quarters of these dollars go to the top half of the income distribution.”

But opposition to the proposal may be as big a problem for Obama as it was for Reagan.
A Kaiser Family Foundation survey in April that asked whether workers “with the most generous health care benefits” should be required to pay taxes on their coverage found 52 percent of respondents opposed to the idea. Of those who currently have employer-sponsored health insurance, 62 percent opposed it. (The poll of 1,203 adults had a margin of error of plus or minus 3 percentage points.)

Will Americans bridle at loss of tax break?

The U.S. Chamber of Commerce warned Baucus in a letter last month that workers view employer-provided insurance “as duly-earned income” that should be “protected from the tax collector. This perception perhaps explains why the president was so successful in campaigning against Senator McCain’s health reform proposal — Americans generally do not support tax increases.”
The American Benefits Council, which represents principally Fortune 500 companies, is also opposed to the idea of limiting the tax break for employer-provided insurance.
“It is likely to lead to higher deductibles or co-pays, so there’s higher cost sharing” by workers, said the group’s health care spokesman, Paul Dennett. If Congress were to set the threshold for taxation of benefits at $13,000 for a family coverage plan, then employers “in order to help workers not face taxation, may offer coverage below that threshold. This is a course employers say they would likely take.”

Reduction in health benefits?

Economist Elise Gould at the liberal think-tank the Economic Policy Institute gave a similar assessment. Employers would see the threshold for taxation as what the government deemed the target level for health benefits, she said. “Employers will respond by reducing the comprehensiveness of benefits. They’ll likely target premiums to fall below the (threshold) value or just at that value, so employees don’t have to pay those additional taxes.”
Corporate America also fears that a limit on the tax break for health insurance would create an administrative nightmare, especially for large firms with employees in different states who face widely varying health care costs.
And opposition also remains strong among labor unions, which were big Obama backers in last year’s election.
Barbara Coufal, the assistant director of legislation at American Federation of State, County, and Municipal Employees, said, “We don’t think we need to look inside the health care system to seek all the revenues we need for health care reform. Over the last 10 years, there have been a lot of tax breaks that have been given to the wealthy and to businesses. We maybe ought to look there and restore some equity.”
With momentum growing to enact some limit on the tax break for health benefits, increasing energy is being devoted to develop a workable taxation scheme.
Target upper-income Americans?

Gruber suggested the possibility of having a baseline so that only families with incomes above $125,000 per year would pay tax on their benefits. Gruber said this would still raise a lot of revenue: more than $40 billion a year if the cap were indexed to increases in the Consumer Price Index.
But in its letter to Baucus, the Chamber of Commerce said that such a proposal might “foster class warfare by (repealing the exclusion) … for certain income earners and not affecting others.”
Baucus, a 30-year Senate veteran, knows the politics of this issue are delicate. Limiting the tax break for employer-provided health benefits has “got to be done in a very sensitive way, to make sure the limits are high enough,” he was quoted as saying last Thursday by the Capitol Hill publication CQ Today.
Yet if Congress changes the law so that the tax bite ends up hitting only the wealthy, it might not raise enough revenue to help pay for health insurance overhaul.
“That’s the real dilemma,” said Dennett, of the American Benefits Council.
“The lower the threshold is set, then the lower the revenue gain — and the scramble would be on to find other revenue sources.”