The Baucus Plan For Expanded Health Insurance Coverage

This is the culmination of a “year of work” by Sen. Max Baucus. And the cost? Well much less than the House version if you’re to believe the Senators who put it together. Instead of 1.5 trillion, this one will only cost us 850 to 900 billion over 10 years – another sum we cannot afford.

Why is this version less costly than the House version? Well they’re going to tax insurance companies.

Yes, I hear you. I know you know what it really means. But for the benefit of those on the left who stop by here to troll instead of taking the time to learn basic economics, we’ll again restate what should be obvious.

Corporations don’t pay taxes. Their customers do. The buck doesn’t start or stop with them – they just pass them along.

A recent report by Oppenheimer & Company, the investment bank, said, “It will be very difficult for the Senate Finance Committee to structure the fees in a way that they won’t be immediately passed on to customers in the form of higher premiums.”

Of course it will be difficult for that committee to structure them that way since it has no desire to do so:

Mr. Baucus’s plan, expected to cost $850 billion to $900 billion over 10 years, would tax insurance companies on their most expensive health care policies. The hope is that employers would buy cheaper, less generous coverage for employees, thereby reducing the overuse of medical services.

The separate new fee on insurance companies would help raise money to pay for the plan. The fee would raise $6 billion a year starting in 2010, and it would be allocated among insurance companies according to their market shares.

So it is a redistribution of your money (once the insurance company raises its fee to offset the “tax”) back to the very same insurance companies to subsidize the effort to insure everyone.

If this doesn’t catch the eye of union employees and pensioners and turn them completely against this version, then they’re totally impervious to reason. They are prime candidates for newer, cheaper and less generous coverage if this were to be passed into law.

To make the misery equal for all, Baucus and crew hope your employer, union, pension fund will drop the health care you’re now satisfied with for a cheaper, less generous policy and thereby reduce “the overuse of medical services”. And the money taken from you will be given back to the very insurance companies which it previously “taxed” to subsidize the uninsured.

But mind you, it’s all for your own good. And no, this isn’t at all government intrusion in a market to a level sufficient to change behavior – quit saying that. Because we all know that Jay Rockefeller is right, don’t we?

Mr. Rockefeller said the fees were justified because insurance companies were “rapaciously, greedily and unstoppably making money by underpaying the patient, by underpaying the provider and by overpaying themselves.”

Who again sets the standard for medical reimbursement in the US? It darn sure isn’t private insurance companies, is it? To bad that White House email address for fishy health care info isn’t still functioning.

And of course, when Chuck Schumer says something like, “The health insurance industry should pay its fair share of the cost because it stands to gain over 40 million new consumers under health care reform legislation,” you know its a bad idea. Schumer has never once demonstrated he has a grasp on the economics of anything. And this is no exception. But he does understand the political ramifications of such a bill.

In fact, the devil is found in what Schumer doesn’t say – “40 million new customers, no pre-existing conditions, no option to deny coverage, no lifetime cap on payouts”. Yeah, sounds like a heck of a bargain, doesn’t it? 40 million new consumers and guaranteed bankruptcy leaving what?

Well good old Chuck Schumer and the government to fall back on, huh? And, after neatly rigging the game in such a way as to effectively eliminate private coverage, they’ll also offer up a hearty “we told you so” and blame it on a “market failure”.

Who needs a public option or a trigger when you can set things up this way? Yup, as is apparent, there are all sorts of ways to skin that single-payer cat, aren’t there?

[Crossposted at QandO]

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