Why Force the Poor into Subsidizing Insurance Companies?

This health insurance reform bill has sunk to a level that makes me wonder why all the huge corporations in the country don’t line up in front of the white house on Halloween, with bags, dressed as burglars, yelling trick or treat! The Baucus plan is yet another corporate welfare program masquerading as public welfare policy. If this is the plan that goes forward from here, we all should be working hard to defeat it. It just makes me want to scream. What on earth is going on with the Democrats these days?

WaPo columnist Ruth Marcus talked to Ron Wyden about health care reform (as compared to health insurance industry subsidies) and concludes we should all listen up! I liked the information because we’ve had the ongoing discussion here on The Confluence about those of us bitter knitters that aren’t exactly on the Goldman Sachs bonus plan that will be forced into paying for something we can’t afford now. Just how’s this latest scheme going to work for the nation’s poor? Isn’t being poor enough problem with out your own government punishing you for it?

Now, a family earning three times the poverty level — $66,150 for a family of four — would have to pay up to 13 percent of their income for health insurance. And that’s just the premiums — not counting deductibles, co-payments and out-of-pocket expenses.

“I don’t know very many working-class families who you can look in the eyes and say: ‘Do you have that kind of money in your checking account?’ — because they don’t,” Wyden told me.

Those without coverage would face a fine of as much as $3,800, unless costs exceeded 10 percent of their income, in which case they would be given an “affordability exemption.” In other words, they wouldn’t have insurance, but at least they wouldn’t be penalized for it.

“Folks are having trouble affording coverage that meets their families’ needs now. And they have been hearing from the White House and Congress that they’re going to get health-care security,” Wyden said.

If the Baucus proposal passes, he said, “They’re going to say, ‘Huh? Health-care security means I pay a whole lot more than I’m paying today or I get to be exempt from it, or I pay a penalty?’ They’re not going to say that meets the definition of health-care security.”

So, let’s get this straight. We’re going to fine poor people to subsidize the second most expensive payment mechanism in the world and I might add, a highly profitable payment mechanism for the highly profitable insurance industry? Excuse me, but I think this makes Max Bacchus look like the Grinch that stole food from babies’ mouths. What’s the point of working or reporting income at all, if all you’re going to do is get taxed for not being able to afford the 37th best health care system in the world with the number two price tag? Why not just sit home and go for the medicaid option?

The “hardship exemption,” he said, is “a big congressional punt.” The people most in need of insurance — those in their late 50s and early 60s — will end up saying, as Wyden put it, “I’m just as uninsured as I was before I heard all the politicians speak.”

On choice, Wyden argues, the White House and congressional plans have defined eligibility for the new insurance exchanges so narrowly that the vast majority of Americans won’t be allowed to participate.

For all the hullabaloo over the public option, the reality is that most Americans would not be eligible to choose even a private option. In an effort to avoid destabilizing employer-sponsored health care, the exchanges will be open only to the uninsured and small businesses.

“Nobody ever told the folks carrying the public-option signs all over America that 85 percent wouldn’t even get to choose it,” Wyden said. “For hundreds of millions of people, they’re going to have no more leverage after this bill passes than they do today. They work in some company, some person they don’t know in the human resources department decides what’s good for them. Nothing has changed.”

There are reasonable explanations for why Wyden’s colleagues and the White House made the choices they did. A price tag of more than $1 trillion for a more generous subsidy package induced sticker shock — though the cost ought not to have been surprising.

So, let me ask this question. Why are we supposed to support any of this? What is in it for any one but the President who gets to say he did something and the insurance companies who get windfall profits that would make the CEO of Chevron Exxon blush?

Lawmakers and the White House were unwilling to take the political risk involved in paying for a more generous package. The most logical way would have been limiting the amount of employer-sponsored insurance that can be provided tax-free — an approach that ran headlong into union opposition.

Likewise, opening up the exchanges to more takers could destabilize the employer-sponsored system — to which one rational response might be, “Yippee.” But President Obama decided not to mount such a broad assault on what Wyden describes as “the status quo caucus.” Wyden noted that Obama, speaking to a rally in Minneapolis on Saturday, emphasized the importance of choice and competition in the health-care marketplace. “Now, the question is: Can you make the legislation resemble the speech, and so far there’s a big gap.”

Let’s remember that Ron Wyden is friendly to this administration and he’s one of the most knowledgeable Senators in the district on health care policy and issues. It seems to me that he’s asking some very good questions. As reported by The Hill, the very last Republican standing (Olympia Snowe) on the finance committee that was willing to work on something bi-partisan just sat down. If you can’t bring alone the two last reasonable, old-school Republicans in the Senate, where does the administration think it’s going on bi-partisan support?

Faced with the prospect of having to pass legislation without Republican votes, Obama’s chief political adviser David Axelrod met with Senate and House Democrats on Tuesday to stress the importance of party unity on healthcare reform — a message most directly aimed at centrists who now are critical to its passage.

Why would any of these folks listen to Axelrod at this point? Who in their right mind would want to do to small businesses and middle class, working class, and poor people what this bill does? The Baucus plan sticks them with a huge bill that benefits very few of those who really need health insurance and transfers a huge amount of wealth to the insurance industry. The farther this President moves to the Right, the farther the Right moves away from him and the left is now left opposing his position. How is this anything but policy clusterfuck? What is the point to all of this?

His effort to woo Republicans, however, has alienated liberals. At least one prominent liberal on his committee, Sen. Jay Rockefeller (D-W.Va.), plans to vote against Baucus’s plan.

“There is no way in its present form that I will vote for it,” Rockefeller said during a conference call.

Obama and Baucus have suggested paying for a big chunk of reform by levying new taxes on high-cost insurance plans. Specifically, Baucus has suggested a 35 percent excise tax on insurance plans that cost single individuals more than $8,000 a year and cost families more than $21,000.

Snowe’s problem with that plan is that it could impose a heavy tax burden on Maine, which has one of the highest average health insurance premiums in the country. A July study by Harvard economist David Cutler found that Maine, on average, has the fourth-most costly insurance premiums in the country, trailing only Connecticut, Delaware and New Hampshire.

…

Snowe has objected to Baucus’s bill for requiring as many as 4 million uninsured Americans to buy health plans without providing them with significant federal subsidies.

Snowe said that lawmakers cannot expect people to comply with a federal mandate to buy health insurance if affordable plans are not available

“The affordability question is crucial,” said Snowe. “It’s a central component, because at the end of the day people have high expectations they will have access to affordable health insurance.”

I have to say I’m with Wyden, Snowe, and Rockefeller on the Baucus plan. It’s a stinker. It doesn’t attack affordability, it doesn’t give any one any more choice, and it really only forces people to buy things they can’t afford right now. Then, it attaches a tax to other people’s plans that essentially punishes them for being the remaining few that actually get health care benefits. What on earth is going on that something this messed up is going forward with such lackadaisical vetting? This administration must think we’re all either stupid or on koolaid. I have a difficult time even explaining why any one that calls themself a democrat would be pushing this plan at this point other than some form of deranged party loyalty.

Hey, It’s Boston Boomer.

I guess Dakinikat and I were writing about the same thing at the same time, so she asked me to add a couple of things from my post to this one. Sorry this is disjointed, but I’m in a big hurry to get to work.

I think this could be good news for us real Americans. The Baucus bill is taking incoming fire from both sides of the aisle.

Yesterday, Senator Jay Rockefeller (D-WV) spoke out against the bill, saying it would result in huge tax increases for middle-class Americans.

The Baucus proposal would impose, starting in 2013, a 35 percent excise tax on insurance companies for “high-cost plans” — defined as those above $8,000 for individuals and $21,000 for family plans.

Health economists believe a tax on high-priced benefits could help slow the growth of health costs by making consumers more sensitive to prices.

The tax contemplated by Baucus is also a big revenue raiser. It is expected to raise $200 billion, money that Baucus is hoping to use to pay for subsidies for the uninsured.

Rockefeller is worried that many coal miners in his state, who currently have tax-free health insurance provided by their employers, will end up paying for Baucus’ excise tax when Insurance companies pass the cost on to consumers.

Referring to Baucus, Rockefeller said, “He should understand that (his proposal) means that virtually every single coal miner is going to have a big, big tax put on them because the tax will be put on the company and the company will immediately pass it down and lower benefits because they are self insured, most of them, because they are larger. They will pass it down, lower benefits, and probably this will mean higher premiums for coal miners who are getting very good health care benefits for a very good reason. That is, like steelworkers and others, they are doing about the most dangerous job that can be done in America.”

The New York Times reports that Senator Charles Grassley (D-Iowa) correction: (R Iowa) says that he cannot support the Baucus proposal:

“Unfortunately,” Mr. Grassley said, “we’re operating under an artificial deadline set by the Democratic leadership and the White House. I’m disappointed because it looks like we’re being pushed aside by the Democratic leadership so the Senate can move forward on a bill that, up to this point, does not meet the shared goals for affordable, accessible health coverage.”

Mr. Grassley, who participated in the bipartisan negotiations, said he wanted to lower the overall cost of the bill. In addition, he said he wanted stronger guarantees that federal money would not be used to pay for abortions or to subsidize health insurance for illegal immigrants, and he is seeking unspecified “medical malpractice reforms.”

Since the bill obviously can’t get the 60 votes need to overcome a Republican filibuster, isn’t it time for the Senate to go back to the drawing board and draft a bill that responds to the needs of the American public, which overwhelming supports a government operated plan. It’s time for us to really hammer Congress and push for Medicare for all! Could the failure of the Baucus bill (Obamacare) really be good news for the rest of us?

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