On Saturday, the Boston Globe published an editorial on health care financing reform where they actually got something right.
Naturally, being the Globe, they also got far more things wrong. And the parts that they got right were entirely accidental. But in looking at how they got things wrong, they gave us a glimpse into just how the idiots are thinking.
The theme of the piece is “paying more to the government for your health care is a good thing.” The specific topic is the taxes on so-called “Cadillac” health plans — the really, really good, comprehensive health plans that are the envy of so many.
The editorial starts off wrong, and just keeps getting wronger.
THE TAX on “Cadillac” health insurance plans serves two purposes: to raise money to help lower-income families get coverage, and to give insurance companies a new incentive to keep health costs under control.
Um, no. The insurance companies will NOT suck up the tax. They will just put it on top of the already-exorbitant premiums on those plans. In essence, if you want a really good plan, you must be punished for your “greed.”
The tax, which is applied against insurance companies but won’t take effect for eight more years, will kick in at high enough rates — $27,500 for a family plan — that most Americans won’t be affected. Others will have time to seek lower-cost alternatives.
So don’t worry about it, it’s years away. And it won’t affect YOU. And those greedy SOBs who get these nice plans will have time to see the error of their greedy ways and go cheaper.
It’s not surprising, however, that some Massachusetts cities and towns, with their unusually high health insurance costs, would find their plans to be subject to the tax. A recent Globe series demonstrated just how out of whack municipal health plans are with those in the private sector. It also showed how easy it would be for many cities and towns to lower their health costs by joining the state plan or transferring some retirees to Medicare. If the Cadillac tax serves as a wakeup call to Massachusetts communities, it’s a necessary one.
THERE IT IS. The one thing that the Globe got right, by accident. The problem isn’t private companies that offer these plans, but governments. These plans aren’t being paid for by the private sector, but by the average citizens.
But the way to fix such things isn’t for the state government to tell the lower levels of government how to run their business. Instead, the state should simply tell the cities and towns that if they want to spend that kind of money that way, they should finance it themselves and not look to the state to pick up the tab.
Some Bay State communities already offer their workers policies exceeding $30,000 in which there are no deductibles, $5 copays for office visits, reduced fees for health clubs, and access to every hospital.
Those benefits may sound like a dream, but they carry few incentives for cost control; workers can simply seek out the highest-cost provider whenever they want. Tailoring plans more closely to the actual needs of beneficiaries would promote savings and efficiency.
Again, there’s nothing wrong with that. If insurance companies are willing to offer these policies, and people are willing to pay the premiums for them, so be it. But it’s the taxpayers that are paying the premiums, and it’s the taxpayers who should be fixing the situation — not the state simply looking to get its cut.
Meanwhile, some Massachusetts firms have concerns about another funding mechanism in the health reform bill, the tax on medical devices. These range from surgical drapes to bedside monitors to the panoply of synthetic joints, implantable defibrillators, and other spare parts that keep human bodies going past their “use by” date. Senator Scott Brown wants to repeal the tax, which will go into effect in 2013.
Here again, we see what is truly important: not that people get the care they need, not that we continue to be the world’s leader in medical innovations, but the government get its cut of the pie.
But the 2.3 percent will be largely offset by the boost in business created by having 30 million more Americans with insurance, and thereby in a position to use medical devices. All device makers, domestic and foreign, will have to pay the tax, so no firm should gain a competitive edge. The industry argues that foreign makers could benefit slightly since disproportionately more of their sales are overseas and thus not subject to the tax. But US firms, with more sales in this country, will profit more than foreign manufacturers from the boom of newly insured patients.
“But you’ll make it up in volume!” How many times have we all heard THAT lie?
There is no disguising the fact that some businesses will pay more in taxes because of the health reform bill, and that individuals with the most expensive health plans will probably pay more for them because insurers will be subject to the Cadillac tax. But in creating incentives to trim costs, the Cadillac tax is good public policy. And applying a modest tax on device makers while also giving them 30 million new customers is a fair way to pay for a significant improvement in national health. No benefit comes without any cost, but these are reasonable ways to achieve the greater good of extending insurance to more people and reducing the medical cost spiral.
I am highly confident that the “Cadillac Tax” will never come to pass. While it fits the socialistic model of “from each according to their ability, to each according to their need” and plays into the “punish the rich and successful for daring to be rich and successful” theme that embodies so much of the modern Democratic Party philosophy, the simple fact is that the majority of people with those plans are in unions and the public service sector (many both — the majority of union membership these days is in the public sector, not the private sector). City and town employees, state employees, school and college employees, union members — these are large portions of the Democrats’ base. And the message they send is wonderfully schizophrenic — “soak the bastards with the really great health plans, but NOT US!” Any “Cadillac tax” that could get past the Democrats would be so full of loopholes as to be utterly meaningless.
But in that one point, the Globe is right. The benefits offered to many public employees are grotesquely disproportionate and unsustainable.
However, the best way to fix that is not to simply slap another tax on it. (That’s the Pavlovian response from so many liberals to problems.) It’s to simply face reality and say that the gravy days are over.
But in the meantime, it’s sure fun as hell to see the liberals’ core beliefs (I can’t quite call them “principles”) being applied to their own core constituencies, and hearing them squeal. It’s music to my ears.
