BaucusCare's Mandate Tax

By Big Tent Democrat, Section Other Politics
Posted on Mon Sep 21, 2009 at 09:42:47 AM EST
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The Beltway "progressives" have discovered there is only so much get along from actual progressives in their drive to pass an Health Insurance Industry Profits Protection Act. This puts them in an awkward position. For example, they have to, as Matt Yglesias does here, ignore, even misstate, the fact that the BaucusCare they are championing does in fact include an "excise tax" (Max Baucus' phrase, not mine) for those Americans unable to afford to purchase health insurance. Yglesias calls the Baucus excise tax "regulation" -- "Not being a politician, I can just note that we generally speak the English language in the United States and we’ve never previously taken the word 'tax' to include all regulations that increase some people’s costs of buying stuff."

Ahem, it is rather ridiculous to complain about BaucusCare being described as containing an excise tax when in fact Max Baucus himself included a provision titled "Excise Tax," that provides for taxing people unable to afford to buy health insurance. That is the reality of the mandates without a public option. It is a tax on the less well off created to insure the profits of the health insurance industry. That is the reality. Deal with it Beltway Villagers.

Speaking for me only

< The Beltway War On Howard Dean And The Public Option Continues | FixingThe Mandate Tax: Autoenrollment Into Public Insurance >

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BaucusCare's Mandate Tax | 42 comments (42 topical)

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I do not get it, (5.00 / 3) (#1)
by KeysDan on Mon Sep 21, 2009 at 09:53:16 AM EST

they must not have read Baucus's proposal, or think that anyone else has. As you point out, excise tax is right in front of their eyes if they cared to read it.

Help! (5.00 / 4) (#2)
by lentinel on Mon Sep 21, 2009 at 09:55:03 AM EST

Please explain.
How is taxing someone who is unable to afford health insurance supposed to provide health insurance to those who cannot afford it?

I don't know what I would yell if I were in the Senate chamber when this is being proposed, but it would damned near impossible for me to just sit there.

: Don't know what I would yell (5.00 / 3) (#3)
by nycstray on Mon Sep 21, 2009 at 09:59:03 AM EST

either, but I do know it wouldn't be headline safe . . .

: Definition of "afford" (5.00 / 1) (#18)
by gyrfalcon on Mon Sep 21, 2009 at 10:29:08 AM EST

is what's at issue on that, seems to me. They think they have a structure of subsidies set up that will make insurance "affordable" to everybody over the Medicaid income limits. Oddly, as far as I can tell, the "excise tax" for not having insurance is substantially less than the cost of the insurance even with the subsidies.

The Excise Tax (5.00 / 3) (#4)
by kdog on Mon Sep 21, 2009 at 10:00:03 AM EST

is reverse Robin Hood, anyway you slice it. And I think we've had just about enough of that already.

There's an argument that it's actually (5.00 / 1) (#5)
by Slado on Mon Sep 21, 2009 at 10:04:38 AM EST

unconstitutional and wouldn't stand this pretty conservative court.

What do the lawyers think?

If you read teh arguement (5.00 / 3) (#7)
by Slado on Mon Sep 21, 2009 at 10:07:58 AM EST

in the WSJ piece it actually sets up a wonderful irony.

If it's not a tax it's clearly unconstitutional. If it is a tax then it's political poison.

Good luck Mr. Obama.


: It can't be a tax (5.00 / 1) (#22)
by Abdul Abulbul Amir on Mon Sep 21, 2009 at 10:43:38 AM EST

After all Obama said not one dime in tax increase on the middle class.

Ridiculous argument (none / 0) (#6)
by Big Tent Democrat on Mon Sep 21, 2009 at 10:07:41 AM EST

IT is terrible policy, but clearly constitutional.


Why? (none / 0) (#8)
by Slado on Mon Sep 21, 2009 at 10:08:17 AM EST

You answered your own question (none / 0) (#9)
by Big Tent Democrat on Mon Sep 21, 2009 at 10:09:33 AM EST

It is a tax.


Kind of funny huh. (none / 0) (#10)
by Slado on Mon Sep 21, 2009 at 10:10:02 AM EST

If they argue it isn't then what?


But it is (5.00 / 4) (#11)
by Big Tent Democrat on Mon Sep 21, 2009 at 10:12:30 AM EST

No need to think beyond that.

Of course, the INDIVIDUAL mandate is what you focus on.

But BaucusCare has no EMPLOYER mandate.

This legislation is so terrible it is not worth discussing its merits.

If I were a Senator, I would join a GOP filibuster of it.


The problem then (5.00 / 3) (#12)
by Slado on Mon Sep 21, 2009 at 10:16:25 AM EST

becomes if they don't do the mandate they can't pay for it without taxing something else and that is politically hard to do right now.

He's lost the progressives by dumping the public option but he can't win moderates and conservatives over because he can't afford to really do anything.

This whole thing is a huge mess and his performance against George on ABC was the only take away politically from his media blitz. It was as if he had no idea anyone would call him on such terrible policy.


: We could pay... (none / 0) (#14)
by kdog on Mon Sep 21, 2009 at 10:25:32 AM EST

with spending cuts in other areas in lieu of a tax...say goodbye DEA and half the CIA?
Though I guess thats hard to do politically too...mouths far and wide on those teets.

Evidently Obama did not read the (5.00 / 1) (#13)
by MO Blue on Mon Sep 21, 2009 at 10:19:47 AM EST

provision titled "Excise Tax" in the Baucus bill either. Obama on This Week: Insurance Mandate Is Not A Tax Increase

Wonder whose idea it was to label that provision Excise Tax."

This part (5.00 / 3) (#15)
by TeresaInSnow2 on Mon Sep 21, 2009 at 10:27:56 AM EST

is from the "This Week" site, Crooks didn't seem to have it, but I loved it:

Mr. Obama: "No. That's not true, George. The--for us to say that you've got to take a responsibility to get health insurance is absolutely not a tax increase. What it's saying is, is that we're not going to have other people carrying your burdens for you anymore . . ." In other words, like parents talking to their children, this levy--don't call it a tax--is for your own good

So apparently he's implying that the things we pay real taxes that are called taxes aren't for our own good and that this is, so it's not a tax?

You gotta love a charletan, don't you? Only one of his campaign tent revivals would have made it better.


Obama may be right on mandates (none / 0) (#21)
by MO Blue on Mon Sep 21, 2009 at 10:43:04 AM EST

not being labeled as taxes. A case of too much and too little information for me.

Baucus also expressed some flexibility with regard to his proposal to impose a 35% excise tax on insurers who sell "gold-plated" insurance policies - a levy insurance companies say they would be forced to pass on to their customers. Under the bill as it is currently written, that tax would kick in on plans that cost more than $8,000 for individuals and $21,000 for families. link

Can't find a copy of the provision in the bill. Not sure if the provision labeled Excise Tax is more expansive than just the tax on "gold-plated" insurance policies. Of course with rising premiums, most decent coverage policies will have premiums falling within the so called "gold-plated" category in the next few years.


The individual mandate (none / 0) (#24)
by Big Tent Democrat on Mon Sep 21, 2009 at 10:49:05 AM EST

provides for an excise tax.


What world do these people live in? (none / 0) (#28)
by sj on Mon Sep 21, 2009 at 11:09:29 AM EST

plans that cost more than $8,000 for individuals and $21,000 for families

Really? They think people currently uninsured just have 8 to 12 THOUSAND dollars to put towards health care costs. If people currently uninsured had 8 to 12 THOUSAND dollars to put toward health care costs, they would have, and be visiting, their family physician instead of emergency rooms.

I would love for all the money I've been paying as Health insurance premiums be redirected to taxes funding Health CARE. That way, should I become unemployed I would still have health care without having to make a decison to apply my fewer dollars toward food and housing, or toward some sort of COBRA scam. Or toward an excise tax, when I file with the IRS.

They're going to create a whole new category of criminal that are citizens who aren't able to come with the $3200 excise tax assessed by the IRS. Of course, they could just be increasing the number of criminals who never file with the IRS.


: He's speaking (5.00 / 1) (#30)
by TeresaInSnow2 on Mon Sep 21, 2009 at 11:14:54 AM EST

of Cadillac plans. Those are usually employer-provided, although if you're silly enough to buy one, some are available on the individual market (I say silly, because they really aren't cost effective for most people). It will be a payroll tax, but it's especially regressive. People who do, say, clerical work at, say, Boeing will have to pay the same 35% tax that the executives at the same company pay?

BTD (none / 0) (#29)
by TeresaInSnow2 on Mon Sep 21, 2009 at 11:10:48 AM EST

quotes the mandate/excise tax provision in this diary:

: Thanks (5.00 / 1) (#31)
by MO Blue on Mon Sep 21, 2009 at 11:26:41 AM EST

I actually read that post and somehow forgot it. Will book mark that section and the PFD file for future reference.
Evidently there are Excise taxes everywhere in Baucus bill even though Dems are saying "No increase in taxes."

Baucus bill allows insurance co.s (5.00 / 2) (#16)
by Coral on Mon Sep 21, 2009 at 10:27:58 AM EST

to charge 50-65 year olds 5 times what they charge young people. (via James Ridgeway at Mother Jones)

http://www.motherjones.com/mojo/2009/09/how-baucus-plan-screws-over-50-crowd

In fact age discrimination is allowed in all the bills in Congress, but Baucus is the worst. Combine this with the mandates & you have a political disaster for democrats.

I don't see how Obama et al can still be upbeat about getting politically viable reform enacted. Although I would love to see something decent emerge from this mess.

That's the feature part (none / 0) (#19)
by lambert on Mon Sep 21, 2009 at 10:33:38 AM EST

Where's the bug?


Age discrimination? (none / 0) (#20)
by Abdul Abulbul Amir on Mon Sep 21, 2009 at 10:37:08 AM EST

Charging more than the risk that your age embodies would be discrimination. It would appear at first glance to be discrimination against the young.

BTW, do you think it is discrimination to charge a 60 year old more than a 20 year old for a one year term life policy?


If life insurance... (5.00 / 2) (#23)
by kdog on Mon Sep 21, 2009 at 10:47:09 AM EST

is mandated by law, then yes, it is discriminatory to charge one citizen more than another. Without a mandate, it isn't.


it is discriminatory (none / 0) (#26)
by Abdul Abulbul Amir on Mon Sep 21, 2009 at 10:58:45 AM EST

I agree that it is discriminatory to charge one citizen more than another for the same risk. Likewise, it is discriminatory to charge lower risks the same as higher risks.

The presence or absense of a mandate has nothing to do with price discrimination.


Sure it does... (5.00 / 2) (#27)
by kdog on Mon Sep 21, 2009 at 11:03:37 AM EST

in my book "equality under the law" dictates that if the state is forcing me to buy a product, any product, it sure as hell better cost the same for all those forced to buy it...equality under the law.


Not the same product (none / 0) (#33)
by Abdul Abulbul Amir on Mon Sep 21, 2009 at 12:16:16 PM EST

A life insurance policy for a 70 year old smoker is not he same product as a life insurance policy for a 25 year old non-smoker.

Likewise health insurance.

Frankly, the idea that younger typically lower earning workers should be over charged to reduce the charge on those in the usual peak earning years of 45 to 55 is repugnant.


I agree there should be some difference (none / 0) (#34)
by CST on Mon Sep 21, 2009 at 12:22:06 PM EST

in price. But 5x seems way too high. It's not even that high under traditional plans. I don't mind the younger population subsidizing the older to a degree. That's the whole point of mandates bringing down the overall cost - you get the healthier people in the system.

That being said, you are right that it is not fair for a 25 year old to pay the same as someone who costs significantly more and makes significantly more. But the multiplier is still way off.


Bringing in the young (none / 0) (#40)
by Abdul Abulbul Amir on Mon Sep 21, 2009 at 02:27:34 PM EST

I don't mind the younger population subsidizing the older to a degree. That's the whole point of mandates bringing down the overall cost - you get the healthier people in the system.

Bringing in the young does not lower total cost it increases total cost. The total number of hip replacements will not go down, nor bypass operations, nor cateract operations, nor Papp smears, etc.

Shifting costs from heavy users to light or non-users is not cost reduction it is cost shifting.


: it will bring down (none / 0) (#41)
by CST on Mon Sep 21, 2009 at 03:13:02 PM EST

"average" costs. Obviously you need the same number of hip replacements, etc... but if you have more people paying into the system that don't need those things, the "average" cost per user will go down. That's what I mean about subsidizing. I assume those people will pay into the system and not use it as much. But yes, perhaps it was a poor choice of words there.

I understand your point... (none / 0) (#37)
by kdog on Mon Sep 21, 2009 at 12:49:40 PM EST

which is why we can't mandate insurance, or shouldn't...the product offering does not jive with the intent of equality under the law, and it can't be made to jive.


Much of the additional charges (none / 0) (#42)
by MO Blue on Mon Sep 21, 2009 at 03:18:54 PM EST

will be born by taxpayers.

Finally, if under the Baucus bill, insurers can charge middle-income 50-somethings five times as much as even the most affluent 20-somethings, a great many of those older customers are going to need fat subsidies, sending more tax dollars to Aetna. link

Ins .cos already (none / 0) (#35)
by gyrfalcon on Mon Sep 21, 2009 at 12:31:56 PM EST

do this anyway.


: Isn't it closer (none / 0) (#36)
by CST on Mon Sep 21, 2009 at 12:33:03 PM EST

to 3x or 4x as much? That's what I remember from the previous conversation about this.

It's the economy stupid! (5.00 / 5) (#17)
by mmc9431 on Mon Sep 21, 2009 at 10:28:52 AM EST

The economy is so trashed most lower and middle class people are teetering on the brink. It's absolutely unbelievable to think that "the party of the working class" would even consider passing this fiasco of a bill.

After the continuous diasters of the Bush era, I really thought we had a chance of holding down the Republican's for years to come.

If this bill goes through, Republican's will have total control again after the 2012 election. Democrat's will have only themselves to blame.

Well considering insurers are the only ones (none / 0) (#25)
by vicndabx on Mon Sep 21, 2009 at 10:49:50 AM EST

paying providers anything close to the actual cost for services......

It is a tax on the less well off created to insure the profits of the health insurance industry

I'd rather there be a big brouhaha over the language, it ultimately IMO leads to a discussion on where the money comes from and how much is spent. Which in turn leads to how much do the services cost and why.

There is clearly (none / 0) (#32)
by CST on Mon Sep 21, 2009 at 11:54:01 AM EST

a tax in the Baucus bill. Since the president has stated that he refuses to raise our taxes, that means he opposes the Baucus bill.

using Schumer logic here.

New Proposal (none / 0) (#38)
by waldenpond on Mon Sep 21, 2009 at 01:19:07 PM EST

Just reported....Baucus wants to scale back plan by reducing the tax 35% tax on luxury polities and ooh, ooh, ooh....scaling back the subsidies. How's Ezra doing with that?

: He'll find a way to support it (5.00 / 1) (#39)
by Big Tent Democrat on Mon Sep 21, 2009 at 01:20:41 PM EST

But you know that already.