Drudge has been pumping up the fact that the Obama
administration would not rule out the possibility of raising
middle-class taxes to pay for health care legislation. While this
is worth highlighting, it shouldn't distract attention from the
fact that the health care bills currently being proposed all
include a middle-class tax hike in the form of a mandate
requiring that individuals purchase health insurance.
It's true that current proposals offer subsidies to help people
buy insurance, but even the more generous subsidies in the House
Democratic health care bill cap off at 400 percent of the
federal
poverty level, or $43,320 for individuals. Yet if you look at
Census
data, 8.5 million of the uninsured have incomes of between
$50,000 and $74,999, while an additional 9.1 million have
household incomes of $75,000 or more. We can't put a precise
number on the full cost of the mandate to the middle class based
on these statistics. For instance, Census data refers to
"household" income which in some cases could mean individuals but
in other cases could mean families, and we don't know how the
uninsured population breaks down within the over $75,000 group
(i.e., how many of them have household incomes of between $75,000
to $85,000 vs. how many are above $200,000). But what is pretty
obvious is that there will be millions of middle-class Americans
who won't qualify for subsidies, yet will be forced to either buy
insurance or pay a fine. While people focus on the penalty aspect
of it, if you're making $45,000 a year and the government begins
forcing you to spend thousands of dollars each year for a
product, that's a lot of money, and it's undeniably a tax on the
middle-class.
And there's also something else insipid about the idea of
mandates. While those advocating mandates accuse those Americans
who are uninsured by choice as being burdens on the system,
there's a flip side to that. Millions of the uninsured are young
and healthy and simply don't spend enough on medical care each
year to justify the annual cost of premiums. If Obama gets his
way, they'll be forced buy something that isn't a good deal for
them so that older and sicker people can obtain more affordable
insurance. If liberals want to argue that it's a moral imperative
that government make it affordable for sick Americans to get
health insurance, they'll have to be forced to acknowledge that
the cost of doing so will have to be paid by others -- and some
of that burden will be borne by the middle class.
Too convaluted to follow, or to make the electorate follow.
Far better just to hit hard on the punitive and coercive aspects
of the legislation, all of which is unamerican.
And besides that, of course, to hit hard on the financing of the
proposed legislation.
Aaron| 8.3.09 @ 3:08PM
In response to a bill without Republican support; "We will have
contingencies in place. These plans will likely be considered as
a last resort, but they are on the table," Schumer told reporters
on a conference call. He declined to elaborate.
I think its time we Americans that are opposed have our own
"contingencies" in place for this September.
Liberal Reader| 8.3.09 @ 6:09PM
Mr Klein --
I'm not an economist or an accountant, and frankly I find the
health care story difficult to keep up with.
However, there is good reason for anyone in the middle class to
fear that if they have not yet lost their health insurance, they
may well lose it in the next five to ten years.
The prices are going up faster than anyone imagined fifteen years
ago, busting families, small business, and state governments.
Medical costs are affecting everyone now; they'll continue to do
so.
The Democrats believe they can pay for the health reform with
Medicare savings and a tax on the wealthiest Americans. It may be
they cannot, but that doesn't mean we shouldn't do it. If the
middle class does get hit with a modest tax increase, maybe one
less trip to Starbucks per day, then so be it.
I totally agree with you. The cost will raise tremendous.
Liberal Reader| 8.3.09 @ 6:12PM
One other thing:
Thank you for writing a criticism of the Health Care bill that
does not warn readers that Big Black Barack, the Illegal Alien
from Kenya, is coming to Kill Your Poor Old Grandmother -- which
is apparently what most other conservative commentators are
running with.
Bob| 8.3.09 @ 7:23PM
You should all know that Good Ole' Tex only has a rudimentary
knowledge of adverse selection and proved it with his responses.
And then, he doesn't even understand that health insurance
premiums are not "allocated" by state, they are "calculated" by
state. Allocation assumes a sum of money is divided. Then again,
he only thinks he knows something about insurance.
But the point of my comment (and he completely missed it) is that
if you allow people to purchase insurance across state lines it
changes the risk profile by state and thus the cost structure. If
Ol' Tex knew anything about actuarial costs, he would have known
that. What will happen is that those in the NE would buy policies
in the SW thereby increasing the cost of insurance for those that
live in the SW.
But then again, you have to know insurance to understand that.
Jim O'Brien| 8.4.09 @ 7:47AM
When BHO declares that he won't increase taxes on the middle
class, it's the same as telling us that his evacuations don't
stink. He has already announced that he will let the Bush tax
cuts expire, so he speaks with a forked tongue. Being a good
Socialist, he will claim that the Bush cuts were all designed to
benefit the rich. But the "middle class" knows better.
Michael Dooley| 8.4.09 @ 11:00AM
Dear Liberal Reader:
Far be it from me to defend daily runs to Starbucks. Personally,
I would rather Starbucks patrons take their money and give it to
one of the various food banks or to the Salvation Army. But
that’s just me. (The parishes in my city of my denomination
maintain a large “pantry” with give food and clothing [and, in
special cases, cash] to thousands. As you must imagine,
“business” is pretty brisk these days.)
Aside from a number of other objections, Conservatives are
genuinely puzzled why so many Liberals assume health care reform
(“doing something”) will just work. Some advocates speak as if
government sponsored reform were a magic wand that will “lower
the hills and the mountain and make straight the way of the
Lord”.
I believe in American Exceptionalism too. But as an empirical
matter, there is little reason to believe “universal healthcare”
will turn out any differently in the United States than it has in
Europe and Canada. I know Liberals find comparisons to European
healthcare systems tiresome; but they provide real world studies
that cut through a lot of theories and ideologies being thrown
around.
Since it inception in the 1960’s, both Republicans and Democrats
have talked about getting savings out of Medicare by squeezing
out waste and fraud or some other “tidying up the ship”. Never
happens. Somehow those savings never show up.
Having been on the inside of Medicare dealings with hospitals and
other medical facilities, the government negotiates nothing. They
tell you how much they will pay and that’s that. It’s been this
way for years. Payment is often pennies on the dollar. Guess who
picks up the balance. Guess what happens when there is no one to
pick up the balance.
It is amazing how the yearly income government gnomes define as
“rich” keeps drifting downward when push comes to shove.
I know you don’t claim to be an economist; but I would
familiarize myself with what is called “third-party effects”. In
a simplified form, there are a least two phenomena which
following when someone other than the recipient of goods or
services pays. 1.) When A pays B for services to C, B becomes
more compelled to please A than C. 2.) With sufficient time, B
will work to convince A to approve services and programs B would
prefer to provide rather than what C wants—B will succeed in this
“sell” far more often than one would think. Thus it is little
wonder why “single payer” systems turn out as they do.
The differences between Liberals and Conservatives on healthcare
derive in part from their general sensibilities. Conservatives
see healthcare the same as so much in this imperfect world: a
limited and scarce resource. Until the last half century, the
natural condition of mankind was living in poverty, dirt and
sickness. Climbing out of that crippling curse was/is a long and
torturous haul. Healthcare simply isn’t something we can grant to
ourselves. It would be a positive good for everyone to have
healthcare; but such is a goal we must work towards.
Liberals, on the other hand, look upon the suffering and misery
of the world and think it is unfair and unconscionable that some
get medical care and some do not. Conservatives would agree but
not in the same sense Liberals mean it. Liberals tend to view the
lack of healthcare a social insult to the personal dignity of
each of the uninsured. Especially in recent years, Liberals have
pronounced that healthcare is not merely a goal but a civil
right. That is, it is appropriate the unfortunate among us to
require and expect services and materials for their healthcare
needs from the rest of the community. Some in the leadership of
the churches pronounce that the failure of any community to
provide such a right is “sinful”.
But is turning “wants” or goals into “rights” an answer likely to
be successful? Does the insistence in this equality damage at the
cost of essential liberty? My guess is that the Liberal would
answer “yes” to the first and “no” to the second. The
Conservative would certainly answer in the reverse.
Trying to the General Welfare clause in the constitution is a
complete farce in the justification for justifying to force anyone
to buy any type of product especially from a particular source. I
hope and pray that this law gets over turned for my sake and the
sake of my kids and their kids.
Dan| 8.3.09 @ 2:35PM
Too convaluted to follow, or to make the electorate follow.
Far better just to hit hard on the punitive and coercive aspects of the legislation, all of which is unamerican.
And besides that, of course, to hit hard on the financing of the proposed legislation.
Aaron| 8.3.09 @ 3:08PM
In response to a bill without Republican support; "We will have contingencies in place. These plans will likely be considered as a last resort, but they are on the table," Schumer told reporters on a conference call. He declined to elaborate.
I think its time we Americans that are opposed have our own "contingencies" in place for this September.
Liberal Reader| 8.3.09 @ 6:09PM
Mr Klein --
I'm not an economist or an accountant, and frankly I find the health care story difficult to keep up with.
However, there is good reason for anyone in the middle class to fear that if they have not yet lost their health insurance, they may well lose it in the next five to ten years.
The prices are going up faster than anyone imagined fifteen years ago, busting families, small business, and state governments.
Medical costs are affecting everyone now; they'll continue to do so.
The Democrats believe they can pay for the health reform with Medicare savings and a tax on the wealthiest Americans. It may be they cannot, but that doesn't mean we shouldn't do it. If the middle class does get hit with a modest tax increase, maybe one less trip to Starbucks per day, then so be it.
Garfield Secondo| 10.29.10 @ 7:00AM
I totally agree with you. The cost will raise tremendous.
Garfield Secondo| 10.29.10 @ 7:00AM
I totally agree with you. The cost will raise tremendous.
Liberal Reader| 8.3.09 @ 6:12PM
One other thing:
Thank you for writing a criticism of the Health Care bill that does not warn readers that Big Black Barack, the Illegal Alien from Kenya, is coming to Kill Your Poor Old Grandmother -- which is apparently what most other conservative commentators are running with.
Bob| 8.3.09 @ 7:23PM
You should all know that Good Ole' Tex only has a rudimentary knowledge of adverse selection and proved it with his responses. And then, he doesn't even understand that health insurance premiums are not "allocated" by state, they are "calculated" by state. Allocation assumes a sum of money is divided. Then again, he only thinks he knows something about insurance.
But the point of my comment (and he completely missed it) is that if you allow people to purchase insurance across state lines it changes the risk profile by state and thus the cost structure. If Ol' Tex knew anything about actuarial costs, he would have known that. What will happen is that those in the NE would buy policies in the SW thereby increasing the cost of insurance for those that live in the SW.
But then again, you have to know insurance to understand that.
Jim O'Brien| 8.4.09 @ 7:47AM
When BHO declares that he won't increase taxes on the middle class, it's the same as telling us that his evacuations don't stink. He has already announced that he will let the Bush tax cuts expire, so he speaks with a forked tongue. Being a good Socialist, he will claim that the Bush cuts were all designed to benefit the rich. But the "middle class" knows better.
Michael Dooley| 8.4.09 @ 11:00AM
Dear Liberal Reader:
Far be it from me to defend daily runs to Starbucks. Personally, I would rather Starbucks patrons take their money and give it to one of the various food banks or to the Salvation Army. But that’s just me. (The parishes in my city of my denomination maintain a large “pantry” with give food and clothing [and, in special cases, cash] to thousands. As you must imagine, “business” is pretty brisk these days.)
Aside from a number of other objections, Conservatives are genuinely puzzled why so many Liberals assume health care reform (“doing something”) will just work. Some advocates speak as if government sponsored reform were a magic wand that will “lower the hills and the mountain and make straight the way of the Lord”.
I believe in American Exceptionalism too. But as an empirical matter, there is little reason to believe “universal healthcare” will turn out any differently in the United States than it has in Europe and Canada. I know Liberals find comparisons to European healthcare systems tiresome; but they provide real world studies that cut through a lot of theories and ideologies being thrown around.
Since it inception in the 1960’s, both Republicans and Democrats have talked about getting savings out of Medicare by squeezing out waste and fraud or some other “tidying up the ship”. Never happens. Somehow those savings never show up.
Having been on the inside of Medicare dealings with hospitals and other medical facilities, the government negotiates nothing. They tell you how much they will pay and that’s that. It’s been this way for years. Payment is often pennies on the dollar. Guess who picks up the balance. Guess what happens when there is no one to pick up the balance.
It is amazing how the yearly income government gnomes define as “rich” keeps drifting downward when push comes to shove.
I know you don’t claim to be an economist; but I would familiarize myself with what is called “third-party effects”. In a simplified form, there are a least two phenomena which following when someone other than the recipient of goods or services pays. 1.) When A pays B for services to C, B becomes more compelled to please A than C. 2.) With sufficient time, B will work to convince A to approve services and programs B would prefer to provide rather than what C wants—B will succeed in this “sell” far more often than one would think. Thus it is little wonder why “single payer” systems turn out as they do.
The differences between Liberals and Conservatives on healthcare derive in part from their general sensibilities. Conservatives see healthcare the same as so much in this imperfect world: a limited and scarce resource. Until the last half century, the natural condition of mankind was living in poverty, dirt and sickness. Climbing out of that crippling curse was/is a long and torturous haul. Healthcare simply isn’t something we can grant to ourselves. It would be a positive good for everyone to have healthcare; but such is a goal we must work towards.
Liberals, on the other hand, look upon the suffering and misery of the world and think it is unfair and unconscionable that some get medical care and some do not. Conservatives would agree but not in the same sense Liberals mean it. Liberals tend to view the lack of healthcare a social insult to the personal dignity of each of the uninsured. Especially in recent years, Liberals have pronounced that healthcare is not merely a goal but a civil right. That is, it is appropriate the unfortunate among us to require and expect services and materials for their healthcare needs from the rest of the community. Some in the leadership of the churches pronounce that the failure of any community to provide such a right is “sinful”.
But is turning “wants” or goals into “rights” an answer likely to be successful? Does the insistence in this equality damage at the cost of essential liberty? My guess is that the Liberal would answer “yes” to the first and “no” to the second. The Conservative would certainly answer in the reverse.
Kate| 8.12.09 @ 2:35AM
Drop by. Nice Blog.
Isagenix Challenge| 5.23.11 @ 7:37AM
Trying to the General Welfare clause in the constitution is a complete farce in the justification for justifying to force anyone to buy any type of product especially from a particular source. I hope and pray that this law gets over turned for my sake and the sake of my kids and their kids.