Sunday, November 29, 2009

The tax on 'Cadillac' health insurance plans

If you think the tax on 'Cadillac' health insurance plans in the proposed health insurance reform legislation is something only rich people have to worry about, you're wrong.

"Schoolteacher Kinzi Blair makes only $46,000 a year, but she has what many would consider a 'Cadillac' health plan, now targeted for a big tax increase by health reformers. She has $10 copays and no deductible. She gets generic prescription drugs for $10. Her plan covers mental health counseling, organ transplants, acupuncture. It covers speech therapy for preschoolers and in vitro fertilization. . . . The Senate Democrats' bill, unveiled last week, would impose a 40% tax on insurance premiums above $8,500 for an individual and $23,000 for a family. Those thresholds represent the total paid by both employer and employee. Blair's premiums cost $11,000 so her insurance company would be taxed 40% of the premium that exceeds $8,500 — a total tax of $1,000. . . . The idea is that taxing high-cost health plans would discourage unnecessary health spending and pay for reform out of the health care system itself."

If you're lucky enough to have a job with a good health insurance plan - - a PPO with low co pays and deductibles - - you won't have that insurance after "health insurance reform" kicks in. The goal of "health insurance reform" is to take the total combined money currently spent by everyone on every health insurance plan in American and use that money to buy everyone (including the currently uninsured) a mediocre HMO.

Remember, this isn't "healthcare reform" with the goal of improving the American healthcare system. That's why there have been no hearings on the sucesses and failures of the current system, and no debate regarding improvements to the delivery system.

Rather, the Obama / Pelosi / Reid legislation is "health insurance reform", with the simple goal of getting everyone into a low end HMO, regardless of the quality of medical care provided.

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