Healthcare Blog

Boomer Update on Health Care

Hello Boomers. It just gets more complicated all the time.

Big Labor, Big Favors
By Grace-Marie Turner
The Cornhusker Kick: Just when we thought the health care legislation could not possibly get any worse, any more damaging, or any more disgusting in its vote-buying kickbacks and special favors, then along comes this!

In marathon meetings at the White House, the president and congressional Democrats came up with a "big, fat wet kiss for labor unions" (New York Post) in exempting them from the tax on high cost health plans until 2018.

The deal exempts them from one of the "revenue generating" parts of the Senate health overhaul bill that exposes expensive health plans to a 40% excise tax. The tax on plans costing more than $24,000 a year for families and $8,900 for individuals would be paid by insurance companies, who would simply pass it along in even higher premiums.

And how is Congress going to make up the revenue? With another jobs-killing tax that would subject investment income to Medicare payroll taxes. This will hit small businesses and others that rely on investment income to build their businesses. Apart from the economic damage this would do, it is terrible policy to start thinking of Medicare taxes as yet another piggy bank to fund special political deals.

It is relatively clear that President Obama's economic policy is strictly one dimensional: raise taxes everywhere and anywhere you possibly can to expand the size and scope of government. And the only people who will be exempt from these crushing taxes will be political friends who have cut special deals.

This is not a democracy. This is banana republic politics. Unless you have political connections and lots of campaign cash, expect to get hit.

It's clear that the winners are the powerful labor unions who've bought a place at the table with their huge campaign contributions and election spending. That bought them the deal that exempts union members from $60 billion in taxes on health benefits.

But who are the losers? For starters, workers in states that have fewer labor unions, such as Nebraska. Is Sen. Ben Nelson going to be able to defend a deal that would tax health insurance for workers in his state, most of whom are not unionized, at a higher rate than the more highly-unionized workers in Pennsylvania? This might be called the "Cornhusker Kick."

The union payback shows the same raw politics as a deal in the Senate bill that would force construction companies with five or fewer workers to provide expensive, government-mandated health insurance to their employees. (For other industries, the mandate doesn't kick in until a firm has 50 workers.) The unions had complained that exempting the small, non-union firms from the mandate put unionized companies at a competitive disadvantage.

This is disgraceful.

Political guru Charlie Cook writes today: "Honorable and intelligent people can disagree over the substance and details of what President Obama and congressional Democrats are trying to do on health care reform and climate change. But nearly a year after Obama's inauguration, judging by where the Democrats stand today, it's clear that they have made a colossal miscalculation."


Massachusetts: And what impact is the Massachusetts special Senate election going to have on health reform?

You know the world has changed when people around the country are looking to Massachusetts to stop expansion of a liberal social agenda. One member of Congress told me his constituents are stopping him on the street to ask what they can do to send a message to Massachusetts voters, saying they are all that stands between them and passage of a health reform bill that frightens them.

Republican Scott Brown had the quote of the campaign during Monday night's Massachusetts Senate debate when moderator David Gergen asked him, "Are you willing … to say I'm going to be the person -- I'm going to sit in Teddy Kennedy's seat and I'm going to be the person that's going to block [health reform] for another 15 years?"

Brown replied, "Well, with all due respect, it's not the Kennedys' seat and it's not the Democrats' seat, it's the people's seat."


The public plan lives on, despite most claims that this central pillar of Big Labor's agenda won't be part of the final health overhaul bill.

There is a reason they are silent on this issue. Their government-run health plan just has a new name. It's now called a national health insurance exchange.

The federal government, rather than the states, would have the authority to set up the new health insurance purchasing exchange. This would be the vehicle to centralize health insurance regulation, with Washington dictating what benefits must be covered, what insurers can charge, and how health plans must operate.

The House bill calls for the national exchange to be run by the Orwellian "Health Choices Administration," vesting vast new power for health insurance regulation with the federal government and giving states, consumers, and businesses little or no say over the health "choices" available to them through the exchanges. The national exchange would quickly become a vehicle for price controls and excessive regulation of insurance markets, which have driven up costs and driven out competition in many states.

Giving the federal government power over health insurance through this new regulatory mechanism would create the foundation for a government-run public plan. Speaker Pelosi gave a preview of the power that she believes will be invested in the national exchange when she said at a recent news conference that once the legislation is passed, the insurance companies "will be crying out for a public option."

The politics of intimidation and political favors will not win support for this plan. Stay tuned. This still is not over yet.

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