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Wednesday, September 16, 2009

Obamacare's Rock And Hard Place

"I want to make clear that in its current form I cannot put my support behind the Finance bill -- it will not have my vote," said Sen. John D. Rockefeller IV (D-W.Va.).

The rock is the fact that our government cannot afford to cover every American with health insurance.

The hard place is that every American cannot afford to cover themselves and cannot afford the "13 percent of their income" that it would take for Obamacare to work effectively.

Healthcare for every American sounds great on paper, in theory, but in reality, our government, nor our citizens can afford such a plan, especially now when we are suffering such difficult economic times.

Ruth Marcus at Washington Post points to comments made by Democratic Senator, Ron Wyden, who explains what the plan for Obamacare, now being written in the Senate, would do to lower-income, or middle class families around the country.

Even within his own party, Baucus confronted a fresh wave of concern about affordability. Sen. Ron Wyden (D-Ore.) declared himself dissatisfied with the chairman's plan, which, like other congressional reform proposals, would require every American to buy health insurance by 2013.

"Additional steps are going to have to be taken to make coverage more affordable," Wyden said, "and my sense is that will be a concern to members on both sides of the aisle."

Under the Baucus plan, described in a "framework" he released last week, as many as 4 million of the 46 million people who are currently uninsured would be required to buy coverage on their own, without government help, by some estimates. Millions more would qualify for federal tax credits, but could still end up paying as much as 13 percent of their income for insurance premiums -- far more than most Americans now pay for coverage.

People further down the income scale would receive much bigger tax credits, effectively limiting their premiums at 3 percent of their earnings. But experts on affordability say even those families could find it difficult to meet the new mandate without straining their wallets.

"We're talking about the equivalent of a middle-class tax increase," said Michael D. Tanner, a health-care expert at the libertarian Cato Institute. "Yes, they're paying it to an insurance company instead of to the government. But, suddenly, these people are paying more money to somebody."

Marcus highlights other quotes from Wyden, who happens to be a health reform ally:

"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."

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."

So yes, in theory, covering everyone sounds nice, makes a great sound bite, people hear their Democratic politicians say it and they "feel good", not understanding that they are the ones paying for it, NOT the government.

At this point Democrats and Obama want a health reform bill passed and don't want anyone reading the fine print, so to speak, but that doesn't mean the fine print isn't there, or that it explains how much money every day, ordinary citizens that live paycheck to paycheck, will have much of that paycheck ripped out of their hands.

The healthcare system we live with now is far from perfect and there are many changes that can be made, many of them suggested in other amendments and bills, to which Democrats immediately rejected and refused to allow to pass or be part of the Obamacare bill.

We can fix our system without changing the entire thing, without the trillion dollar price tag and without stealing money from families that are barely making ends meet now.

Commentary Magazine states it perfectly:

As Marcus notes, the reason we get to this point is that it is really, really expensive to insist that everyone get health insurance and then provide generous subsidies so they can get it. (”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.”) Translation: there isn’t any feasible way to pay for what the Democrats really want without breaking the bank. So what the Senate Democrats are planning to give instead to middle-class voters is the worst of all worlds: a requirement to buy something they can’t afford—or pay a smaller but still very substantial fine. What’s not to like? Everything.

Another Democratic Senator, Jay Rockefeller publicly states his concerns as well:

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.

Given how much money this kind of tax can raise, Rockefeller says he understands why it is "tempting."

The West Virginia Democrat worries, however, that a lot of middle class workers, like the coal miners in his state, will end up facing "a big, big tax" under the Baucus bill because they currently enjoy generous employer-provided health care benefits which they receive tax free.

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."

"So that’s not really a smart idea," Rockefeller continued. "In fact, it’s a very dangerous idea, and I’m not even sure the coal miners in West Virginia are aware that this is what is waiting if this bill passes."

Before making up your mind on the pros and cons of the Senate Finance bill, try reading the whole thing, all 223 pages of the Baucus proposal.

Then call your Senators.