NCPA - National Center for Policy Analysis


September 10, 2009

The chairman of the Senate Finance Committee wants levies on insurers to pay for ObamaCare and fines for families who don't sign up.  We can cut costs and expand coverage without sacrificing freedom, says Max Baucus (D-Mont.).

To keep ObamaCare alive, Baucus has proposed a Rube Goldberg scheme of fees and fines on insurers and the uninsured designed to forcibly bring everyone into the loving and protective arms of the nanny state, says Investor's Business Daily (IBD).

To help finance his Plan B, Baucus would impose annual fees of:

  • $6 billion on health insurers.
  • $4 billion on medical-device makers.
  • $2.3 billion on drug manufacturers.
  • $750 million on clinical laboratories.

These fees and taxes punish medical innovation and those who bring us lifesaving medicines that reduce hospital stays, obviate surgeries and extend lives.  And these costs will inevitably be passed on to consumers, says IBD.

Stating the obvious, industry spokesman Robert Zirkelbach of America's Health Insurance Plans (AHIP) says, "New taxes on health insurance coverage is only going to make coverage less affordable for individuals, families and small businesses."

President Obama has said that if you're happy with your health insurance, you can keep it.  So why would he want to impose punitive taxes on insurers?  Is it part of a plan to put private insurers out of business to clear the field for a government-run public option?

  • The $6 billion fee on health insurers equals 25 percent of the industry's pretax profit and 60 percent of after-tax earnings.
  • Under Baucus' plan, companies with more than 50 employees that don't offer insurance would pay a fee of up to $400 per worker, who would qualify for a new tax credit under the plan; however, this might result in fewer workers and higher costs of doing business for small businesses.

Baucus would require that under ObamaCare all Americans get health insurance:

  • Penalties for not doing so would start at $750 a year for individuals and $1,500 for families.
  • Households making more than three times the poverty level would face the maximum fines: $3,800 for families and $950 for individuals.

Fact is, most Americans like their health care, says IBD.  There are ways to provide expanded coverage at lower cost, such as health savings accounts, medical malpractice reform and allowing insurance to be bought across state lines.  Baucus mentions none of this.

It's hard to see how Baucus' plan, like its ObamaCare twin, will make us any healthier or health care any cheaper.  Like Obama's example of service, the post office, we'll get less service at higher cost while waiting in a line that gets longer, says IBD.

Source: Editorial, "Land Of The Fee," Investor's Business Daily, September 10, 2009.

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