With the AFL-CIO opposing passage of the Senate health bill on account of the “Cadillac tax” and House members increasingly skittish in the wake of Scott Brown’s victory in Massachusetts, it appears unlikely the House of Representatives will pass the bill.
That said, it’s worth exploring the motivation behind the so-called Cadillac tax, which is one of the main obstacles to the health bill’s passage in the House.
Rep. Jerrold Nadler acknowledged the obvious absurdity of this Cadillac tax concept a couple weeks prior to the deal struck with Big Labor. Nadler said “The fact that premiums are higher does not mean that benefits are better.”
Duh.
Something far more sinister is at work here.
Patricia Murphy at Politics Daily nails it in just two paragraphs:
Despite the politically powerful unions that oppose it, the tax is enormously attractive to government economists because it both raises revenue -- $149 billion over 10 years -- and should depress the rate of health care inflation by discouraging companies from offering more generous health plans. The Joint Committee on Taxation and the CBO credit the tax as the largest factor in "bending the cost curve" and cutting the federal deficit, as Senate Democrats say the bill will do.
Christina Romer, a senior economic adviser to the president, predicted in October that the tax would encourage "both employers and employees to be more watchful health care consumers." But research released last week by Mercer, an employee benefits consulting firm, showed that in addition to considering lower-cost plans, two-thirds of companies polled said they would also raise health care costs for workers through higher co-pays and deductibles, regardless of whether the employee is a CEO or a line worker at a factory.
Christina Romer, a senior economic adviser to the president, predicted in October that the tax would encourage "both employers and employees to be more watchful health care consumers." But research released last week by Mercer, an employee benefits consulting firm, showed that in addition to considering lower-cost plans, two-thirds of companies polled said they would also raise health care costs for workers through higher co-pays and deductibles, regardless of whether the employee is a CEO or a line worker at a factory.
This is odd as we have been told to the point of exhaustion that insurance companies are shamelessly denying people health care as a matter of course all in the name of profit.
But that’s the dirty little secret – these so-called health reformers believe Americans consume far too much medical care. Of course they won’t come right out and say that for political reasons. Instead, they simply rail against insurance companies, the drug companies, and whatever other bogeymen they have created to pollute this debate.
This tax on “Cadillac” plans would create the groundwork for a situation whereby we all end up paying substantially more for health care but get appreciably less in services than that which we are accustomed.
It’s eerily similar to the Japanese health model. Insurance companies are heavily regulated. The Japanese pay unusually high co-pays, a large chunk of their insurance premiums (employers picking up the rest) and out-of-pocket health expenses for services not covered by the modest insurance plans.
This works to ensure more equality of medical treatment – but it’s sub-par treatment.
While Japanese patients want American-style treatment, their policymakers are alarmed. With a huge national debt and corporations worried about higher taxes, they say Japan can't afford to pour money into treatments that can't extend life span by very much.
"America did too much of this and that's why their medical costs have grown," said Masaharu Nakajima, a surgeon and former director of the Health Bureau at the Ministry of Health, Labor and Welfare.
Since Japan enacted universal health insurance in the early 1960s, the emphasis has been on a minimum standard of care for all. People must pay a monthly health-insurance fee, and large companies pay also. Coverage decisions, doctors' pay, and other rules are set by the central government.
Japanese doctors complain that they have no time to spend with patients. The experience of seeing a doctor is summarized as "a three-hour wait for a three-minute visit."
"America did too much of this and that's why their medical costs have grown," said Masaharu Nakajima, a surgeon and former director of the Health Bureau at the Ministry of Health, Labor and Welfare.
Since Japan enacted universal health insurance in the early 1960s, the emphasis has been on a minimum standard of care for all. People must pay a monthly health-insurance fee, and large companies pay also. Coverage decisions, doctors' pay, and other rules are set by the central government.
Japanese doctors complain that they have no time to spend with patients. The experience of seeing a doctor is summarized as "a three-hour wait for a three-minute visit."
“Minimum standard of care for all.” Those are the key words.
The commitment to "social justice" is driving this idea and not any commitment to sound health policy.
It’s hard to believe Americans in 2010 are prepared to give up their Cadillacs in exchange for Pintos.
