Unions throw grandma under the bus

It’s a bit difficult to deconstruct health care legislation when the “most open, honest and ethical Congress” (per Nancy Pelosi (D. Ca.) in 2007) is negotiating that legislation behind closed doors, but, every now and then something slips out to the public.

Last Thursday, we learned of yet another “deal” that has been struck, this time involving the unions.  Congress has decided that we are spending too much money on health care in this country, and one component of that expenditure is health insurance premiums.  Using very perverse logic, Congress wants to impose a 40% tax on so called “Cadillac” insurance plans in order to reduce the amount of money we spend in that area.  Here is the way that would work.  If your employer provides you with a health plan with premiums exceeding $8900 for an individual plan, or $24,000 for a family plan, a tax would be paid by the insurer.  But, in reality, as most large employers are self insured, the tax would be paid by your employer.  This, in turn, would cause your employer/insurer to reduce your benefits to a plan below those thresholds, and thus avoid the tax.  And, voila, according to Congress, at the end of the day we will spend less on health care than we do now.

It should come as no surprise that unions, whose members are the beneficiaries of most of the Cadillac plans, weren’t happy about either a tax, or reduced benefits.  So, our open, honest ethical Congress negotiated a deal with them.  While you can expect lower benefits beginning in 2013 so your employer can avoid the tax, your next door neighbor, who just happens to be a union member, won’t have to see any reduction in benefits at least until 2018. 

But, it gets better.  Exempting the unions from this tax will lower tax revenues by an estimated $60 billion.

To make up for the lost revenue—and to increase subsidies for lower earners to buy health insurance—negotiators are considering increasing the financial hit on drug makers, nursing homes and medical-device makers, according to people familiar with the discussions. [emphasis supplied]

Nursing homes?  Are you kidding me?  To placate the unions, Congress is actually considering making the cost of nursing home care more expensive.  Silly me…and I thought the tax on Cadillac plans was perverse.  This goes that idea one better.