Plugging the Gap in Health Care Reform Costs

Over the weekend, Max Baucus, the chairman of the Senate Finance Commitee, put up a new plan for health care reform. Senator Baucus, D-MT, has been working with the gang of six, on a bipartisan alternative to the House Democratic plan.

Over the weekend, the committee’s chairman, Montana Democrat Max Baucus, distributed a draft of his health proposal that leaves out the public plan in order to win support from a small group of Republicans. Mr. Baucus’s plan costs less than $900 billion over 10 years and would expand insurance coverage to tens of millions of Americans.

The goal appears to be to produce a plan that doesn’t have the $1.6 trillion price tag of the house bill, or the $1T price tag of the Senate Health Committee plan, but rather a more modest $900 billion. Do you wonder what they left out to get the plan down to the firesale price of $900B? Nothing. They just added a tax on health benefits and called it good.

The committee needed to plug a $100 billion shortfall in the plan’s budget over a decade, and Mr. Baucus assembled a combination of spending changes and revenue increases to make up for the gap, according to people familiar with the proposal. The main new item is an across-the-board fee placed on insurance companies that is based on their market share and is estimated to raise tens of billions of dollars over the next decade, according to people familiar with the plan. Another plank of the plan would tax insurance companies on particularly generous health-insurance plans.

People: A tax on insurance companies is not a tax on insurance companies! A tax is a cost of doing business and will be passed on to employers in the form of higher costs, and then on to employees as lower wages.

The people who have complained about stagnant wages and rising benefit costs need to understand that employers offer employees packages of wages and benefits. When one goes up, the other has to come down. And get ready for higher unemployment if this idea goes through. If you make something more expensive, like hiring employees, you will get less of it.

The insurance industry balked at the fee proposal. “New taxes on health-care coverage will only make coverage less affordable for families and small businesses,” said Robert Zirkelbach, a spokesman for America’s Health Insurance Plans, the industry’s main trade group.


Don’t want to buy insurance and prefer to take the cash and self-insure? You’ll have to pay.

WASHINGTON (AP) – A top senator is calling for fines of up to $3,800 on families who fail to get medical insurance after a health care overhaul goes into effect.

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