Thursday, January 14, 2010

Finally, the truth!

I've said repeatedly that supporters of the Senate health care bill - which include Ezra Klein - are misleading you when they say that the tax on good health insurance plans (aka "Cadillac") will reduce "costs". The impression one gets is that putting the burden on workers - which is what a reduction in coverage does - will somehow reduce the "costs" for drugs and services. It won't.

So, it's nice to see the following in an AP story about the House-Senate negotiation: (emp add)
The White House reached a tentative agreement with union leaders early Thursday to tax high-cost insurance plans, officials said, removing one of the major stumbling blocks in the way of a final compromise on comprehensive health care legislation sought by President Barack Obama.

The breakthrough on the insurance tax marked a victory for the White House, which has long sought a tax on high-cost plans as a way of curbing the rise in health care expenditures. Organized labor — backed by its allies in the House — had opposed it, arguing the impact would fall heavily on workers whose bargaining contracts gave them more robust health care coverage
Yes! A tax on high-cost insurance plans will result in those plans being scaled back and that means that less will be spent on health care. "Expenditures" will go down. The health care that workers get will go down. "Costs"? Not at all.

A way to reduce "costs" (as we normally think of that word) would be to allow drug importation from Canada, Medicare negotiating for drugs, or other approaches that target the price. Obama would prefer not to do that, and instead, pretend that by providing less coverage, he's reducing its price. (And it also means the House plan to tax millionaires is dropped.)



For almost the entirety of the health care debate, the Obama Administration has relied on economist Jonathan Gruber to make the public case for its idea of reform - even the most unpopular parts. But as Firedoglake revealed on Friday, the Obama Administration has failed to disclose that it paid the same economist more than $780,000.

By Anonymous omen, at 1/15/2010 4:00 AM  

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