The President’s $1 trillion health bill
How are we going to pay for this?
To finance the changes, President Obama proposes raising taxes even more than the Senate plan does. Under Obama’s proposal, higher income workers would see their portion of the Medicare payroll rise even higher. The tax would create a marriage penalty by applying to individuals earning over $200,000 and couples earning over $250,000. When the original version of the Senate health care bill was produced, the Medicare tax on those earning over $200,000 was supposed to be 0.5 percent. In the version that passed in December, the tax had been raised to 0.9 percent. And though it hasn’t even been made law yet, Obama is raising the Medicare tax for the third time, by assessing an additional 2.9 percent tax on income “from interest, dividends, annuities, royalties and rents…” This follows the historical pattern of payroll taxes, which have increased 20 times since first introduced in 1935, going from a combined total of 2 percent (including employer/employee contributions) to 12.4 percent today.
The Obama proposal would also raise the proposed tax on drug makers by $10 billion, to a combined $33 billion over 10 years, while delaying enactment by a year. It also delays enactment of the tax on medical devices and health insurers.
The Senate bill’s version of the individual mandate taxes those without health insurance by charging them either a flat dollar amount, or a percentage of income — whichever is higher. The Obama proposal lowers the flat dollar tax slightly (to $695 from $750 when phased in), but raises the percentage of income. This would result in even higher taxes for many individuals for whom the percentage of income is higher. For instance, when fully phased in, somebody earning $40,000 who chooses to go uninsured would be subject to a tax hike of $1,000.
And, may someone please explain to me how will giving the federal government new power to block excessive rate increases by health insurance companies, which are overburdened by government-ordered mandates to cover every thing including hangnails, make health care more competitive and affordable?
What is most disturbing about the President’s latest proposal, and similar ones in Congress, is the apparent lack of understanding that one of the most basic purposes of insurer financial regulation is not to prevent “price-gouging,” but rather to prevent the problems that occur if insurers under-price their products. Specifically, if an insurer fails to charge enough in premiums to cover its expected claims costs, then it is at risk of being unable to make good on the promises made to its customers. That can leave policyholders with worthless coverage or spark demands for government bailouts that impose on taxpayers the cost of covering the losses.
Be assured of this:
Government determining insurance premiums is the same as government determining what services can be offered.
While the government mandates what services can be covered now, the limitation on rate increases means the rationing of care. The insurance companies will cease providing coverage, which will mean the government will be the sole provider of medical coverage.
And for starters, it’ll cost $1 trillion.
Now, how much did they say Medicare was going to cost?
Just how much will the Obama Administration’s Health Care Proposal cost?
Your guess is as good as any. The Congressional Budget Office cannot provide a cost estimate for the proposal.