How Will The Baucus Bill Affect Us?

My well meaning, but decidedly Obot, sister sent me an article from alternet.org recently written by a lesbian mother detailing the additional financial difficulties we face when we are on our partner's health care coverage ("Unbelievable: As A Lesbian Mother, I Have To Pay More For Health Care"). Well, I can appreciate her alarm, but honestly, no freakin' duh. We haven't just been blowing smoke when we claim that there are over 1,000 federal benefits to which we are shut out since we can not be married legally in the U.S. And, big surprise, the article culminates in a call to support the Obama Health Care Plan so that we will be treated like everyone else.

Um, I'm not so sure that's going to be a help. But first, my response to my sister so things stay in context, and to explain why the ire on the writer's part:

Thanks, but I I am well aware. (My partner) and I pay taxes on my insurance through her company since we cannot be legally married. My insurance amount is treated as a benefit to (my partner), thus taxable income under the federal/state system.

Well, considering Obama claims the Baucus plan is the plan he wants (today - it could be different by tomorrow), it's not gonna be a whole lot more in savings according to this Washington Post story, "Alarm Bell On Health Reform":

The Democratic senator from Oregon has been the Energizer Bunny of health reform for the past five years. This week he lobbed a big rhetorical stink bomb. Wyden warned publicly that the package being crafted by the Senate Finance Committee would cost lower-income Americans too much and give many people too little choice of insurance plans.

Under the Finance Committee proposal, individuals would be required to obtain insurance. But to drive down the cost of the package, Montana Democrat Max Baucus's Gang of Six -- a gang that pointedly does not include Wyden -- trimmed the size of the subsidies available for those who could not afford insurance on their own. Now, a family earning three times the poverty level -- $66,150 for a family of four -- would have to pay up to 13 percent of their income for health insurance. And that's just the premiums -- not counting deductibles, co-payments and out-of-pocket expenses.

"I don't know very many working-class families who you can look in the eyes and say: 'Do you have that kind of money in your checking account?' -- because they don't," Wyden told me.

Those without coverage would face a fine of as much as $3,800, unless costs exceeded 10 percent of their income, in which case they would be given an "affordability exemption." In other words, they wouldn't have insurance, but at least they wouldn't be penalized for it.

Nobody ever told the folks carrying the public-option signs all over America that 85 percent wouldn't even get to choose it," Wyden said. "For hundreds of millions of people, they're going to have no more leverage after this bill passes than they do today. They work in some company, some person they don't know in the human resources department decides what's good for them. Nothing has changed."

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Bear in mind, Wyden is actually an ally of Obama's. Yikes.

I concluded with some questions about how all of this would affect us personally, including getting in a little dig particularly about the Federal taxes which didn't look like they are going to change anytime soon given Obama's Justice Department's characterizing us as pedophiles or "incestuous relatives" in its support of DOMA. Ahem.

The Wall Street Journal had not yet come out with its editorial on the Baucus Plan at that time, "Public Option Lite," or else, I would have just sent that to her, and highlighted this Obama mailer they thoughtfully provided:



Remember this? Yeah, WHO'S plan is going to levee fines?? Sheesh.

I won't reprint the whole thing here - it is worth your time to take a look, but here are some of the pertinent paragraphs:

Everyone would be forced to buy these government-approved policies, whether or not they suit their needs or budget. Families would face tax penalties as high as $3,800 a year for not complying, singles $950. As one resident of Massachusetts where Mitt Romney imposed an individual mandate in 2006 put it in a Journal story yesterday, this is like taxing the homeless for not buying a mansion.

The political irony here is rich. If liberal health-care reform is going to make people better off, why does it require "a very harsh, stiff penalty" to make everyone buy it? That's what Senator Obama called it in his Presidential campaign when he opposed the individual mandate supported by Hillary Clinton. He correctly argued then that many people were uninsured not because they didn't want coverage but because it was too expensive. The nearby mailer to Ohio primary voters gives the flavor of Mr. Obama's attacks.

And the Baucus-Obama plan will only make insurance even more expensive. Employers will be required to offer "qualified coverage" to their workers (or pay another "free rider" penalty) and workers will be required to accept it, paying for it in lower wages. The vast majority of households already confront the same tradeoff today, except Congress will now declare that there's only one right answer.

Hold the phone for just a second here. Yes, Clinton's plan did call for mandated coverage, but OBAMA was the one who said she was going to have fines, not Clinton, a charge she consistently disputed. And if you want a reminder of the two plans, Clinton's and Obama's, here's a LINK to Paul Krugman's good article in which he highlights those differences.

Now, back to the Journal's Editorial:

The subsidies in the Baucus plan go to people without a job-based plan and who earn under three times the federal poverty level, or about $66,000 for a family of four. Yet according to a Congressional Budget Office analysis we've seen, the plan isn't much of an improvement over the current market.

Take a family of four making $42,000 in 2016. While government would subsidize 80% of their premium and pay $1,500 to offset cost-sharing, they'd still pay $6,000 a year or 14.3% of their total income. A family making $54,000 could still pay 18.1% of their income, while an individual earning $26,500 would be on the hook for 15.5%, and one earning $32,400 for 17.3%. So lower-income workers would still be forced to devote huge portions of their salaries to expensive policies that they may not want or be able to afford.

Cough, sputter, what??? We're going to be spending HOW MUCH? Oh, but wait, there's more:

Like the House bill, Mr. Baucus uses 10 years of taxes to fund about seven years of spending. Some $215 billion is scrounged up by imposing a 35% excise tax on insurance companies for plans valued at more than $21,000 for families and $8,000 for individuals. This levy would merely be added to the insurers' "administrative load" and passed down to all consumers in higher prices. Ditto for the $59 billion that Mr. Baucus would raise by taxing the likes of clinical laboratories and drug and device makers.

Mr. Baucus also wants to cut $409 billion from Medicare, according to CBO, though the only money that is certain to see the budget ax is $123 billion from the Medicare Advantage program. Liberal Democrats hate Advantage because it gives 10.2 million seniors private options. The other "savings" come from supposedly automatic cuts that a future Congress is unlikely to ever approve that is, until this entitlement spending swamps the federal budget. Then the government will have no choice but to raise taxes to European welfare-state levels or impose drastic restrictions on patient care. Or, most likely, both.

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To sum up, the Baucus-Obama plan would increase the cost of insurance and then force people to buy it, requiring subsidies. Those subsidies would be paid for by taxes that make health care and thus insurance even more expensive, requiring even more subsidies and still higher taxes. It's a recipe to ruin health care and bankrupt the country, and that's even before liberal Democrats see Mr. Baucus and raise him, and then attempt to ram it all through the Senate. (Emphasis mine.)

Gee, they make this sound so good, where do I sign up?? Ahem. As Bronwyn's Harbor pointed out in TWO excellent posts this week, there will be incredible costs to all of us that are being masked, or simply unmentioned, by our esteemed elected officials. Looks like the WSJ has had enough of that subterfuge. Let's hope more sources will expose these plans, too.

I guess I'm getting an idea of just how this might affect us after all...