Romer: White House Sticks With Excise Tax, But Numbers Are Being Adjusted
From This Week with George Stephanopoulos, a conversation with Christina Romer, chair of the White House Council of Economic Advisers about the proposed excise tax on "Cadillac plans" to fund the healthcare bill.
As someone who got into the nuts and bolts of union health care plans when I was a reporter, I can tell you there's almost always some lard in there. (I remember one contract that covered a week-long hospital stay for normal childbirth.) The insurance broker is usually politically connected, and the premiums are inflated so the broker can kick back a percentage to the politicians. So theoretically, this tax will put some useful pressure on inflated plans - but create some very unhappy politicians:
STEPHANOPOULOS: Senator Harry Reid, though, the Democratic leader in the Senate said that has to wait until health care is done and the negotiations between the House and Senate have begun this week. The president weighed in with the leaders on behalf of this so-called Cadillac tax, the excise tax on high-priced health insurance plan. That is facing some real resistance in the House. Here's Congressman Joe Sestak.
(BEGIN VIDEO CLIP)
SESTAK: They're not just pulling the Cadillac. They're pulling the Chevrolets. By 2019, because they index it to a wrong inflation rate, we're going to have one-third of all the workers in employer-based plans paying a middle-class tax. No, this has to change.
(END VIDEO CLIP)
STEPHANOPOULOS: He and labor leaders like Gerry McEntee say this is going to be a middle-class tax increase that could hit up to 40 percent of union workers.
ROMER: All right, so the -- the important thing the president has said that he thinks that this excise tax on Cadillac plans is important. He's been convinced by experts across the ideological spectrum that say this is one of those things that genuinely slows the growth rate of costs, and anybody that's worried about the budget deficit knows that we've got to -- to do that.
You know, what the president has said is, you know, he's always open to -- you know, there are design issues here. He's going to be continuing to -- to work with the Congress to say, are there ways to -- to make it work better? But we want to maintain that -- that crucial focus on cost containment.
STEPHANOPOULOS: Even if it's a middle-class tax increase?
ROMER: You know, I think that the numbers that you were hearing, you know, that the levels where this is being set -- I think the current number is something like $23,000 for a plan, a family plan -- that's a very high level and -- and exempts an awful lot...
(CROSSTALK)
STEPHANOPOULOS: Well, except union leaders say it's not. They say that at $23,000, it affects 1 in 4 union members. If you raise the threshold to $27,000, it'll be 1 in 14. Are you willing to raise that level?
ROMER: No, you -- you absolutely -- I think you've got to be very careful on the numbers. They're actually, as it's being developed -- they're being, you know, changes made to make sure that, if you've got just older workers and that's why your costs are higher, or things like that, if you're a first-responder, so we've been very receptive to -- to, you know, arguments like that, and, also, the -- you know, sort of the -- the level at which you set.
I think the important thing is the -- you know, the incentives that it provides to genuinely slow the growth rate of costs (ph). If this thing works just right, nobody hits it, right, because -- precisely because it slows the growth rate of costs.
ABC News
(ABC News)
STEPHANOPOULOS: Well, that's because insurance plans might be dropped, as well. But, still, even with this in there, the Senate bill, your own chief actuary of Medicare and Medicaid says that this is going to increase health care costs by $222 billion over the next 10 years.
ROMER: All right, so you need to be very careful. There are lots of estimates out there. I think, you know, the Congressional Budget Office...
STEPHANOPOULOS: But that's your own actuary.
ROMER: The -- the actuary is independent, right, and the Congressional Budget Office is nonpartisan, highly respected organization, as well. They have said that the Senate bill as it came out would genuinely reduce the deficit over the 10-year window and, even more important, said that it would slow the growth rate of costs so that those -- that deficit reduction was going to be growing over time.
So I do think you need to -- to -- to look at the range of estimates. And we, certainly, have looked very hard at the CBO estimates and -- and think they're very reasonable.
if they are working class under $250,000, no tax.
No. Democrats are trying to prove that they can fuck the working man just as much as the GOP can.
USA! USA! USA!
"Anyone that makes less than $150K in this country, has no business voting Republican."
and you turn around and bash them. Good job of replying to a comment, "NOT".
That is retarded, the tax code should be progressive, the higher your income the higher the % you pay, what is so hard to understand?
They shouldn't be taxed on benefits. I wish some of you would think before you comment.
wish we would just agree with you and not post.
Hey, at least try and be rational.
Sounds reasonable to me, Ron.
Say what you mean. Mean what you say. But don't say it mean.
some of us try to use common sense.
Common sense, a gift many forget or neglect to open.
Say what you mean. Mean what you say. But don't say it mean.
...that won't work.
Unless my understanding is seriously off, the way the tax will work is that it will be levied on the insurance companies issuing the policies, with the expectation that the costs will be passed on to the employer who will then opt for a cheaper plan that covers less (and/or has higher deductibles and co-pays) to avoid the surcharge.
The whole idea of group plans is to treat those covered as a group, not as a series of discrete individuals. I don't believe group plans would be able to exempt individuals from their portion of such a surcharge based on their income.
(Notice that this is not the same as the question of how much of their share of the total premium an individual pays, but of being exempted from a tax on that premium, a share which will then have to be picked up by others.)
The tax would be levied on the reciipient of the coverage based on the value of the plan.
I triple-checked and I was right: First, the tax applies primarily to employer-supplied health insurance coverage. Next, according to the Center on Budget and Policy Priorities,
The conservative Committee for a Responsible Federal Budget adds that
To consumers, that is, via their employers or other group plan providers. The whole idea, again, is to force employers (and employees) to cut back on coverage to avoid the tax - which is not imposed directly on individuals, making exempting individuals based on their income problematic at the least.
sorry ron you better re-read the excise tax proposal.
Not so, as others have pointed out.
I'll be totally shocked to see Obama and his Dem's try anything so "radical".
Obama , Emanuel and the democrats are looking as much like corporate republicans as the corporate republicans do..
Face it Obama and the democrats LIED>>> They FEED us a bunch of BS to receive our votes , than threw us under the bus...
http://speeches.demconwatchblog.com/2008/09/o...
Wednesday, September 24, 2008
http://innovation.cqpolitics.com/cq-rollcall/...
None
If Romer went on television to explain this aspect of the health care plan she sounded like she didn't know what she was talking about. I agree with the blogger: no tax on anyone making less than $250,000.
These plans as they affect union members, for instance, are almost all related to retirees.
along.
Bastards
WHEN is Georgie going over to Cluster-Fox?? He sounds just like Billo-the-clown..naaa more like beck !!
So he's advocating doing NOTHING for the majority of Americans (not just the union guys) and giving more money away to the slave owners rather than give any help to us - the slaves.. Well, screw him. Hopefully he'll leave for Cluster-Fox soon so we can COMPLETELY dis-regard ANYTHING he says...what a dweeb...
little twerp can't refuse.
"Oh boy you mean I'll be able to afford a 165 foot Yacht to dock in Miami?"
increases on the rich that's for sure.
... and up taxes on the dwindling middle class.
If only the poor could afford to pay more bribes.
Estate tax for 2010: Zero.
Corruption favors the wealthy.
Making no sense whatsoever. Bush tax cuts will be phased out for the higher incomes.
Estate Tax will still be in force as if was renewed by Congress. Of course, let Republicans get their hands on it and you can tell it goodbye.
Please check your information before you spout off about my being "delusional."
Bush tax cuts peaking in 2010 here.
Estate Tax in 2010 is zero here.
There was no "phasing out" of the Bush tax cuts. The Democrats let them fully run their course. They are at their peak right now.
I'd respond to "Estate Tax will still be in force as if was renewed by Congress," but I haven't a clue what that's supposed to mean - especially in this context. I can tell you, however, that even a quick Wikipedia check might have helped with some pretty basic information.
Corruption favors the wealthy.
And replace them with 3rd-party candidates because no party is trustworthy anymore.
Neither of the corporatistic parties are worthy of my vote when they both refuse to reform health care reasonably.
Green Party for 2012 and indefinitely.
A week long stay in the hospital used to be the norm for normal childbirth, back in the 1950's, here in the United States. My parents paid for it out of pocket twice, for my birth and my brother's. They had no health insurance, they were not wealthy, and it did not bankrupt them.
When I visited some hospitals in the Socialist Republic of Viet Nam in '81 and '87, I was charmed to see that the Vietnamese continued that five-day rule, broke as they were.
Normal childbirth is VERY painful and tiring. I'd say five days is the minimum you'd want, if you'd ever given birth to anything but this blog.
Single payer means single standard of care. If single payer is where you want to get to then Cadillac plans have to go.
Hasa Diga Eebowai
..does she have a problem speaking coherently?
I remember one contract that covered a week-long hospital stay for normal childbirth.
Maybe you're too young to remember, Susie, but that used to be the NORMAL stay for a new mother. As it is in countries that have single-payer medical plans, as in Europe. My sister lives in Spain, and she stayed in the hospital for about a week. That's kind of standard - at least in civilized countries.
It's not about the mother being sick. It's about her having time to bond with her baby and regain her strength and her bodily equilibrium without the drains and distractions of household life. It's about her being able to go home with her child, both of them having been monitored and checked out thoroughly in that crucial first week. A lot can go wrong those first few days, and it's safest for the two of them to be where any emergencies or unforeseen problems can be dealt with quickly and surely.
"Lard"? No. It's precaution and good sound care. We've just grown so accustomed to being treated like shit by our medical system, getting kicked out into the street as soon as we stop bleeding, that we've lost the sense of what good medical care is anymore.
There's always free cheddar in the mousetrap, baby. - Tom Waits
And certainly a necessity if "normal childbirth" includes routine episiotomy.
Tomorrow's meeting between Obama and union leaders will result in tweaking the Cadillac numbers upward. On the other hand, there is no doubt that this is one of the major effective strategies for attacking increase in health care costs in respect to insurance itself.
And if there are going to be "costs" in the first 10 years, we also need to look at what the longer term projections are. And these are favorable.
The goal of any HCR is to have in place a system that will address the long term. I hope that there will be further adjustments, but that will only be possible with a new foundation in place.
Leave it to George to do followup galore with a member of the administration as, perhaps, his way of making up for not having done so with Giuliani.
More of that liberal media, right?
Here in Canada we have a single payer system. It costs a lot of money, and we for it with taxes rather than premiums.
By and large, we like it. Although our government is not as accountable as it should be, it is more accountable than private insurance corporations are. Also, most of the money spent goes directly to the cost of health care itself, very little to administration costs, not to mention the obscene profits of private health insurance corporations.
The proposed reform health care bill passed by the Senate, as I understand it, will have the taxpayer subsidize the cost of health carew insurance premiums, giving those taxpayer dollars to private insurance companies. At the same time, it forces Americans to buy their products, shoddy as they are, without offering an optional public system. Its seems to be the most aggregious, ineffective and expensive solution to the US health care crisis imaginable.
The US is going deeper and deeper into debt. This so-called reform is a tragic joke that will only add to the next financial collapse.
Its seems impossible for your political system to deal honestly and effectively with a critical problem.
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