NCPA - National Center for Policy Analysis


September 24, 2009

Remember what Barack Obama said about Hillary Clinton's health plan?  "Hillary's health care plan forces everyone to buy insurance, even if you can't afford it…and you pay a penalty if you don't."  Well, that idea is back, says John C. Goodman, President, CEO and the Kellye Wright Fellow with the National Center for Policy Analysis.

Welcome to Obama Care ala Max Baucus.  The specifics of the bill are apparently changing hourly and there are 564 amendments being proposed.  However, the core features are likely to remain intact, says Goodman.  Like other versions of the health reform before Congress, this bill will:

  • Require every American to buy a health insurance plan that will be designed in Washington and (through time) be shaped and molded by special interest pressures or pay a hefty tax.
  • Subsidize health insurance for young people by taking about $500 billion away from Medicare and Medicaid.
  • Cause several million (mostly moderate-income) seniors to lose their coverage under Medicare Advantage.
  • Cause millions of families to move from private coverage (which allows them to see a broad array of doctors) to Medicaid and S-CHIP programs (where health care access is much more limited).
  • Cause millions of American families to lose their current private coverage and obtain insurance in an artificial market (an Exchange), where insurers will have perverse incentives to underprovide to the sickest patients.
  • Nationalize the private health insurance marketplace by effectively outlawing a real market for health care risks.

But unlike the other bills, explains Goodman, this bill has two additional harsh features:

  • A 35 percent tax on private health insurance -- initially targeting "Cadillac" plans, but eventually reaching all plans.
  • An employer play-or-pay mandate that is effectively an implicit tax as high as 26 percent or more on the wages of middle-income workers.

Source: John C. Goodman, "Senator Baucus Declares War on the Middle Class," John Goodman's Health Policy Blog, September 23, 2009.

For text:


Browse more articles on Health Issues