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Paying the Health Care Tax
#1
Here is an interesting article in the Wall Street Journal. If you think that you will not have to pay more because you are not one of the "rich" who make more than $250,000, you may be wrong.

I am in the same boat as this woman. My catastrophic coverage will be taken away (even though politicians say everyone can keep their coverage) and it will be replaced by one that is 2.5 times more expensive. My premium goes up by over $450 per month for a coverage I don't want or need.

If you are uninsured or pay your own health insurance, here is a calculator to help you figure how much you will be forced to pay.

http://healthreform.kff.org/SubsidyCalculator.aspx


Paying the Health Tax in Massachusetts
By WENDY WILLIAMS
Cape Cod, Mass.

My husband retired from IBM about a decade ago, and as we aren't old enough for Medicare we still buy our health insurance through the company. But IBM, with its typical courtesy, informed us recently that we will be fined by the state.

Why? Because Massachusetts requires every resident to have health insurance, and this year, without informing us directly, the state had changed the rules in a way that made our bare-bones policy no longer acceptable. Unless we ponied up for a pricier policy we neither need nor want—or enrolled in a government-sponsored insurance plan—we would have to pay $1,000 each year to the state.

My husband's response was muted; I was shaking mad. We hadn't imposed our health-care costs on anyone else, yet we were being fined ("taxed" was the word the letter used).

We've spent much of our lives putting away what money we could for retirement. We always intended to be self-sufficient. We've paid off the mortgage on our home, don't carry credit-card debt, and have savings in case of an emergency. We also have a regular monthly income of about $3,000, which includes an IBM pension. My husband, 61, earns a little money on the side, sometimes working as an electronics consultant on renewable energy projects. I'm 58 and make some money writing science books. We are not wealthy, but we aren't a risk of becoming a burden on society either. How did we become outlaws?

The turning point was three years ago, when then-Republican Gov. Mitt Romney pushed through the state legislature a health-care plan that he promised would provide universal coverage while lifting from the middle-class the burden of having to pay for those who do not have insurance. His argument was that the uninsured drove up the cost of health care for everyone by seeking care at emergency rooms and then skipping out on their medical bills. Hospitals make up for those unpaid bills by charging everyone else more than they otherwise would.

The central plank of the Romney plan was a mandate that required everyone to buy health insurance or pay a fine for posing a risk to society by walking around without coverage. There would be subsidies for those who couldn't afford insurance, and residents would be required to buy a minimum amount of health insurance, on the grounds that they might buy a policy that doesn't cover the cost of their care and end up skipping out on their medical bills. "We insist that everybody who drives a car has insurance, and cars are a lot less expensive than people," Mr. Romney told the Boston Globe in 2006.

Mr. Romney and Sen. Ted Kennedy publicly promised that the middle class—that is, people like us—would not be taxed and that our health-care costs would actually decrease if the plan became law.

My husband and I weren't convinced. It all seemed inane, but we are neither politically or socially conservative and figured the plan wouldn't affect us much. Besides, who could be against a plan that covers more people for less money?

For the first two years of the mandate, our IBM health insurance was seen as acceptable in the eyes of the state. This year the rules changed. The state requires that health plans cap out-of-pocket expenses for individuals (not including monthly premiums) at $2,000 a year. Our plan's cap is $2,500.

Ten years ago, we had excellent coverage through a more gold-plated plan. But we found that it was no longer worth paying the premiums and scaled back to a more modest policy. Today, we pay about $300 a month for catastrophic care. If we went with the next step up in plans offered to us by IBM, our monthly premium would increase to $800. We simply don't need to pay that kind of money for the amount of health care we actually consume.

Nonetheless, we now owe the state an extra $1,000. Ironically, that's about the extra amount we would pay out-of-pocket under our current plan if both of us actually fell ill in the same year.

We could choose a state-sponsored plan. It would mean paying more than what we pay now, but less than what IBM's next step up would cost. But we don't want to.

IBM seems like a rock of stability compared to the state of Massachusetts. It's apparent that state health-care policies can change at the whim of politicians in Boston, and we might not be able to adjust to the new rules. The way we figure it, if we sign up for a state-subsidized plan we will be at the mercy of the state.

So we are sticking with our plan and paying the tax. But what bothers me most is that a similar health-care mandate is being proposed in Washington, and some of the same promises that were made here are being made again—such as that the mandate will never hit middle-class folks with a new tax. When asked about the mandate, Maine Republican Sen. Olympia Snowe said recently, according to the New York Times, "It surprises me that we would have these high-level penalties on average Americans."

Well, I don't find it surprising. The mandate in Massachusetts was sold as something that wouldn't penalize people like my husband and me. But those political promises were only good for as long as it took to get the mandate enacted into law.


http://online.wsj.com/article/SB20001424...38232.html
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#2
It's an interesting argument, the idea that we fine people for not paying vehicular insurance. I guess the difference is that not everybody has a car, but everyone has a body. The idea of fining people for not having health insurance just seems silly to me. The problem is the American anathema for anything called "tax". The sensible route is to put a small levy on income tax and offer rebates for people who have adequate private health care - but heaven bid anyone suggested raising taxes! :nono:

Still, from a microenomic perspective I'd argue that the government is acting in it's correct role here. In effect what it's doing is not punishing these people for having an IBM health care policy - it's incentivising IBM to change their health care policy. If they don't, then these folk should be able to find a competitor that does provide insurance that matches the policy, the free market in action.

What's wrong with that?
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#3
The government is going to pay a subsidy of thousands of dollars for me. I will pay thousands more on top of that.

But will I get dental? No. Will I get vision? No.

I will get less for more.

Sounds like a great deal. /sarc
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#4
by their very nature taxes cannot be all things positive to all people all of the time. It's a cost of living in a civilized society.
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#5
Here is what candidate Obama promised:

[Image: org_believe.jpg]

Obama Tax Cut Calculator- How Much Will Your Family Save? Calculate now:

http://taxcut.barackobama.com/

*********************************

(Don't bother clicking the link. They site has been taken down.)
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#6
I'm not sure what the point of that post was Confusedcratch:
 Reply
#7
ibofightback Wrote:If they don't, then these folk should be able to find a competitor that does provide insurance that matches the policy, the free market in action.

What's wrong with that?


That's exactly what I was thinking when our current health insurance took a $300/month increase (it costs almost $900/month now - and that's pretty much bares bones insurance: no dental or vision or prescription) So I applied to a company who would have cut our premiums in half - assuming we took on a huge deductible.

WRONG!!! I am stupidly healthy, and so is my husband. Low cholesterol and blood pressure and blood sugar. High activity level. I eat healthy foods and don't smoke; and don't have more than a couple of alcoholic drinks a year.

Yet they denied me :dontknow: They don't like my resurfaced "bionic hip" Sad What made me angriest was that they denied coverage based on my hip - yet the woman I talked to admitted they had no idea what "resurfacing" was :rant: (A state-of-the-art hip replacement that removes no bone. It originated in Europe; and finally made it to the USA about a decade ago. Far superior to a conventional hip replacement - especially for a "youngster" like me)

So for the moment, I'm just paying through the nose with my current health insurance, until Uncle Sam comes up with something affordable
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#8
well ... therein lies one of the key problems with the US approach - when you have something with very inelastic demand, like health care and insurance - price increases have little effect on demand, with the end result that, even accidentally, cartel-like price and product quality can arise.

This is where I think corporatised (essentially run as if private but owned or part-owned by the government) services come in to play. They can act as instruments of government policy to influence the market. If the government service offers a better deal, private enterprise needs to match or better it. In traditional conservative thought is correct, private enterprise should be more efficient and be able to do a better job, with the government corporation picking up the leftovers.
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#9
While you are correct that the private company will be more efficient, the government company won't pass on it's cost of being ineffiecient to the insured. The government company will turn to the government to give them more money, so they can remain the less costly option. Thus, they will attract more customers (instead of the private company) who looks for cheaper rates and will become the majority insurer, costing the tax payers more and more and more money as the gov't company remains inefficient. This is the problem with gov't getting into business, where it just doesn't belong!
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#10
ss3251 Wrote:While you are correct that the private company will be more efficient, the government company won't pass on it's cost of being ineffiecient to the insured.


I said *assuming* they're more efficient. Internationally, governments have proved to be more efficient at providing healthcare to their citizens than private companies in the US, with better health outcomes from less $$$.

ss3251 Wrote:The government company will turn to the government to give them more money, so they can remain the less costly option.


You apparently missed the part where I said they'd be corporatized, or didn't understand what it means.

Quote:Thus, they will attract more customers (instead of the private company) who looks for cheaper rates and will become the majority insurer, costing the tax payers more and more and more money as the gov't company remains inefficient. This is the problem with gov't getting into business, where it just doesn't belong!

Well, the argument can be made that general public health should not be considered a business, but that aside, again international comparisons indicate that governments provide healthcare more efficiently than the US privatised system, so your thesis is not supported unless there's something specifically inefficient about the US form of government.
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