Middle Class Pays More Under Baucus

Posted October 9th, 2009 at 10.04am in Health Care.

The Congressional Budget Office issued a report today giving the Baucus health care bill the stamp of deficit-reduction approval, but this was earned only through steep increases in indirect taxes, such as the coverage mandate. The coverage mandate included in Senator Baucus’ health care plan has significant and disturbing implications for middle-class Americans. Individuals earning up to $45,520 and families earning up to $92,640 would need to cut corners to make ends meet, all in response to the indirect tax implicit in a health care mandate.

For individuals making $34,140 or three times the Federal Poverty Level, the Baucus health care proposal could mandate up to $4,097 in annual premiums, a sum which could have been spent on over nine months of food, almost four months of housing or well over a year of utilities. For a family of four making $69,480 or 300% of poverty, a mandated annual premium of $8,338 would be worth the equivalent of over ten months of food, four months of housing or almost two years of utilities. Is this change to the health care system actual “reform”, or something else?

These numbers become even more staggering for insurance purchasers at the upper threshold of the price cap. Individuals earning $45,520, four times the Federal Poverty Level, would be required to pay $5,462 for their health insurance, when they could have used this same money on over a year of food, four months of rent or a year and a half of utilities. A family earning $92,640, 400% of poverty, would be on the hook for $11,117, the equivalent of over a year of food, five months of housing or two years of utilities. This is quite a burden to place on middle-class Americans.

These mandates are the effective equivalent of taxes on the middle class, because those required to purchase and spend large sums of their income on health insurance would be subsidizing the system. Mandates are the means to levy these taxes, but in the end load the same burden upon the shoulders of the average Americans as a tax hike would. Sadly, mandates are not the only way in which Baucus’ proposal will increase the burden on Americans.

To fund the massive expansion of subsidies, this plan would impose an “Annual Fee on Manufacturers and Importers of Medical Devices”, increasing the price of everything from “wheelchairs and walkers to pacemakers, hearing aids, and MRI scanners”. In his campaign rhetoric, then candidate Obama ensured the American people that he would not raise taxes on anyone earning less than $250,000 per year. In this economic climate, it is essential that he adheres to that promise, not by circumventing the specific word “tax” but by avoiding anything that would increase the financial burden on average Americans. Real change is needed, but mandates and taxes are not the way to achieve this change.

Author: David Green
Interact: Sphere
Share This

4 Comments

October 9, 2009 Freedom of Speech, TX writes:

I will never forget the misty-eyed adoring multitudes chanting “Yes, we can.” during our President’s campaign.

He promised transparency. He promised to unite America. He promised everyone could keep their current health care. Above all, in order to “reel in” well-meaning independents and moderates, he promised that no one making under $250,000 (family), $200,000 (single) would see a tax increase. Many of us knew this was impossible. You HAVE to tax the majority of the population to “re-invent” America.

I know. I know. It could be a fee, a surcharge. It depends how you define “tax”.

Pelosi unwittingly told the “truth” when speaking about a VAT Tax. I’m sure the White House is furious. THE VAT was not supposed to be talked about until AFTER health care reform, cap n’trade, immigration “reform”, and other repressive legislation was put in place.

Taking money from the “middle class” was GOING to happen all along. It may not have been called a tax, but it was going to happen.

More amazing then this duplicity is that many of the same misty-eyed adoring people refuse to believe they have been - had.

After all, he is now a Nobel Peace Prize Winner. The rest of the world trusts him, why shouldn’t we?

October 10, 2009 Samuel Corbin writes:

Again, what are we supposed to do instead? There are no other plans being put forward. The Republican plan is, at this moment, no plan. I’m not saying that there aren’t better ideas floating around, but no one is actually presenting any of them.

Also, bills and taxes can be amended and modified. I’d rather have a burdensome bill that can be changed later and that saves some of the roughly 44 THOUSAND people who die each year in the US because they don’t have health insurance (Harvard, http://pnhp.org/excessdeaths/health-insurance-and-mortality-in-US-adults.pdf).

As for the promised lack of taxation, Obama promised that, but he doesn’t really have the final say in how bills look. It was a pretty ridiculous promise to be making and no one should be remotely surprised that it didn’t come to pass. Really, what can he do? He could veto it, but, again, that’s essentially killing people by waiting. And vetoing it would mean going back through this entire debacle all over again with what would no doubt be new ridiculous exaggerations like that whole “death panel” nonsense.

To summarise, I suppose I can’t really see how any argument against this bill is even remotely reasonable when there are no alternatives at present and so many people are dying.

October 17, 2009 mary, ohio writes:

Max Bachus, is crazy, he should be sent to a insane asslyun! I’am very sure that he deserves to be there, much more, than some of the current residents! FYI, I cannot understand how he ever got elected into any position! I would not elect him as a DOG CATHER, I care more for anilmals than that!

October 27, 2009 David Green, Davis CA writes:

Sam,

Health reform is certainly needed, now more than ever before. The numbers that you posted indicate how tragic the situation we currently are in truly is. Also, you are correct in stating that Republicans in Congress have truly let the ball drop on setting forth a viable alternative to the current suggestions. To their credit, however, they have also been granted next to no participation in the formation of the five bills currently being considered.

I am glad that we agree on the importance and necessary speed with which we must reform health care. However, passing legislation that would only serve to exacerbate the original problem, rapidly rising costs, is the worst thing possible. The current legislation on the subject would be the equivalent of treating a bloodloss patient with leeches-it simply won’t work. In our desire for speed, we must not lose a realistic sight of our goal: affordable, quality health care for individuals who want to purchase it.

While Republicans may have few coherent policy recommendations, there are other solutions available. Numerous alternative proposals have been set forth from the Heritage Foundation alone. I would recommend that you read Webmeme #2448, “A Principled Path to Rational Health Care Reform”. Also, visit the website “Fix Health Care Policy”, and look under the solutions link. I believe that these, among others, should provide reasonable alternatives to current legislation.

The Heritage Foundation - Leadership for America

The Foundry