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Sen Kerry about the excise tax, the good in it, the less good and how to fix it.

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Mass Donating Member (1000+ posts) Send PM | Profile | Ignore Thu Jan-07-10 04:16 PM
Original message
Sen Kerry about the excise tax, the good in it, the less good and how to fix it.
First, it is important to know that Senator Kerry is one of those who have proposed this idea initially, and that he intended it as a way not the employee like the right wanted it to be.

This said, honest people have long exposed the problem with the tax as it is written. I am among the skeptic (even if Kerry is my senator and I respect him for trying). But here is the post he had today on the Hill and Huffinton Post, and we should all appreciate when people try an honest conversation, rather than demonizing people we disagree with.

http://thehill.com/blogs/congress-blog/healthcare/74835-why-this-progressive-is-sticking-by-the-tax-on-insurers-sen-john-kerry

There've been a lot of claims made and exaggerations leveled in the last days about a provision in the Senate-passed health reform bill that places an excise tax on the insurance companies that offer high cost health insurance plans. A lot of it comes from the right wing that wants to kill health care reform. But a lot of it also comes from friends who share my convictions about health care.

I want to address what they're seeing, hearing, and saying.


First the good things, including a few I did not know and that were part of what worries me in this bill.

Fourth, the excise tax included in the Senate-passed health care bill will affect only a small portion of the very highest cost health plans -- a total of 3% of premiums in 2013. The vast majority of health plans fall below the thresholds set in the Senate plan and would be completely unaffected by the provision. In addition, the Senate plan provides special protections to plans held by workers in high-risk professions -- like police and firefighters -- as well as by those over 55.


Second, the less good things. I have seen people here say that the plan as is defined will not hurt hard working American families. According to Kerry, not true, and it is why he is asking that the threshold be changed

Does the Senate-passed bill cast too broad a net by setting the excise tax threshold too low? Yes. This could affect some of the hardest working American families. So let's fix it, not nix it. I believe the final health care reform bill will include appropriate adjustments to preserve its cost containing benefits while increasing the fairness of this provision. But let's get back to the business of doing that instead of fighting to kill a provision that improves health care -- and improves the chances of passing health care this month.


Now, Kerry did not convince me that the House way was not better and there are a few points I do not understand and for which I would need to read more research, but I appreciate somebody ready to make his point honestly.
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uponit7771 Donating Member (1000+ posts) Send PM | Profile | Ignore Thu Jan-07-10 04:22 PM
Response to Original message
1. Some folk who are bitchin about the bill haven't even read the damn thing!!!
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Mass Donating Member (1000+ posts) Send PM | Profile | Ignore Thu Jan-07-10 04:25 PM
Response to Reply #1
2. I suspect that some of those who support it wholeheartedly have not either!
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GodlessBiker Donating Member (1000+ posts) Send PM | Profile | Ignore Thu Jan-07-10 04:26 PM
Response to Original message
3. The threshold should be indexed to the inflation rate of health care.
The House way is better.
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SpartanDem Donating Member (1000+ posts) Send PM | Profile | Ignore Thu Jan-07-10 04:34 PM
Response to Reply #3
4. It is indexed to inflation
Edited on Thu Jan-07-10 04:35 PM by SpartanDem
pg 8

Beginning in 2013, insurance policies with relatively high total premiums would be subject to a 40 percent excise tax on the amount by which the premiums exceeded a specified threshold. That threshold would be set initially at $8,500 for single policies and $23,000 for family policies (with certain exceptions); after 2013, those amounts would be indexed to overall inflation plus 1 percentage point

http://www.cbo.gov/ftpdocs/108xx/doc10868/12-19-Reid_Letter_Managers_Correction_Noted.pdf
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karynnj Donating Member (1000+ posts) Send PM | Profile | Ignore Thu Jan-07-10 04:40 PM
Response to Reply #3
5. It is indexed to inflation plus 1 %
per - http://www.cbo.gov/ftpdocs/108xx/doc10868/12-19-Reid_Letter_Managers_Correction_Noted.pdf (go to bottom of page 7 into page 8 - thatnks to dflprincess for the exact place in the document that was cited in Deaniac83's DKOS diary. ( http://www.dailykos.com/storyonly/2010/1/5/821971/-The-anatomy-of-the-Cadillac-Tax )

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Mass Donating Member (1000+ posts) Send PM | Profile | Ignore Thu Jan-07-10 04:50 PM
Response to Reply #5
7. Healthcare cost inflation is a lot higher than inflation, unfortunately.
Edited on Thu Jan-07-10 05:21 PM by Mass
But thanks, I did not know that.

This also does not take into account where you live. Insurance costs can change according to geography.
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karynnj Donating Member (1000+ posts) Send PM | Profile | Ignore Thu Jan-07-10 08:01 PM
Response to Reply #7
12. I know and I think it is indexed that way on purpose
If part of the goal is to rein in insurance costs, you can not allow policies to increase at incredible rates. There will be huge incentives for insurance companies to come in just below the threshold. So, this MAY cause the most expensive policies to eventually change at the regular inflation rate.

I agree with you that it would have been good to have geographical limits - insurance is higher in NJ than in ID.
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SpartanDem Donating Member (1000+ posts) Send PM | Profile | Ignore Thu Jan-07-10 04:40 PM
Response to Original message
6. Kerry lays out the issues well
There are number benefits to the excise tax, it isn't the massive betrayl of working people as some portray it. But there are some structural issues that need to be fixed.
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wisteria Donating Member (1000+ posts) Send PM | Profile | Ignore Thu Jan-07-10 04:51 PM
Response to Original message
8. I am pleased that he has explained this and that he knows where it needs to be tweeked. n/t
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frazzled Donating Member (1000+ posts) Send PM | Profile | Ignore Thu Jan-07-10 05:09 PM
Response to Original message
9. I've been saying it exempts plans for high-risk professions and older workers for weeks
I think people thought I was making it up.
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karynnj Donating Member (1000+ posts) Send PM | Profile | Ignore Thu Jan-07-10 08:02 PM
Response to Reply #9
13. There was and still is a lot of misinformation out there on this
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Clio the Leo Donating Member (1000+ posts) Send PM | Profile | Ignore Thu Jan-07-10 05:10 PM
Response to Original message
10. And I appreciate your sharing this. NT
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ProSense Donating Member (1000+ posts) Send PM | Profile | Ignore Thu Jan-07-10 06:38 PM
Response to Original message
11. Finally,
common sense.

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