WSJ: Insurers Expect Big Hit in Final Health Bill

[StrongBad]

WASHINGTON -- The health-insurance industry's top lobbyist estimated Thursday that insurers will face up to $225 billion in new taxes and fees under a final health bill.

Insurance companies are pressing lawmakers to peel back a new tax on high-value insurance plans that President Barack Obama wants to include in the final bill. They also want to delay an across-the-board tax so it doesn't kick in until the government begins distributing new subsidies to help lower earners buy insurance.

"Our fees are going to be well in excess of $200 billion, probably in the neighborhood of about $225 or so" over a decade, said Karen Ignagni, president of America's Health Insurance Plans.

Ms. Ignagni's estimate is based on the taxes in the Senate bill, which President Obama wants to use as the backbone for final legislation. But the total hit to the industry could be a lot bigger.

The Senate bill would raise about $149 billion over a decade from a 40% tax on insurance plans worth more than $8,500 for individuals and $23,000 for families, according to congressional estimates. It also levies about $60 billion over a decade in new fees from a flat tax on insurers based on their market share.

Full Article: http://online.wsj.com/article/SB126289015456920057.html?mod=WSJ_WSJ_US_News_6

In my opinion, this is some solid evidence that Obama is not a puppet of the insurance lobby.

[BeyondGeography]

1. But teh stock prices went up after teh Senate vote!11!!!!!1!!

Fools.

[Captain Hilts]

4. Indeed. nt

[SharonAnn]

36. Let's see: their revenues will go up so they want their costs reduced? Well, so do I!

[mkultra]

2. Which is why they have their Digital thugs out en masse

Straight from town halls to message boards.

[Richardo]

3. Yeah, the insurance industry LOVES this bill.

[Parker CA]

5. Nice! K&R! This should make for an interesting thread. nt

[Hello_Kitty]

6. How about we just go with the House plan and tax the ultra-rich a bit higher?

:shrug:

[StrongBad]

7. Seems to me...

...it would make sense to implement policy on the actual industry you're trying to change.

[Hello_Kitty]

8. Seems to me it would make sense to go with the plan that raises more money and would work

The House's idea of taxing people who make $500k or more would raise $450 billion. The Senate plan to tax health plans claims it will raise $150 billion. But that is based on the laughably absurd proposition that employers will pass reduced costs onto employees in the form of higher salaries and taxes paid on those higher salaries will be most of that $150 billion. Seriously.

[StrongBad]

9. You're focusing only on fundraising via taxation. That's half the issue.

The whole point of regulation is to influence the behavior of certain institutions. Taxes and fees are implemented to achieve this end. Blindly taxing anyone making over $500K would be great at increasing governmental revenue but will have little direct impact on the insurance industry and their behavior at all.

Ideally, I would be in favor of doing both. Increasing taxes on individuals making over $500K while imposing fees on the insurance industry would be great. However, given the pragmatic reality of politics, Obama is going to have to take what he can get.

And remember, the issue of a more progressive tax structure can be addressed in many other venues outside of healthcare. I'm sure it will be done eventually.

[dionysus]

11. nicely stated

:thumbsup:

[Hello_Kitty]

13. That's nice but this is being presented as a cost-cutting and revenue raising measure.

And the basis of that - $150 billion will be raised from taxes paid on increased wages generously passed on to employees by their employers - is laughably absurd. If the Senate wanted this to be viewed as a regulatory measure they would have presented it as such.

[StrongBad]

18. This is a long term plan. Per the article...

...the bill over this next decade will raise a total of approximately $225 billion solely through the methods of taxes and fees.

The argument concerning an extra $150 billion raised through wage taxes may very well be absurd. However, that purported amount is of completely separate concern than the $220 billion to be raised by taxes and fees. The 220 will be raised regardless of whether the 150 argument holds true.

$220 billion is quite a sum and enough to enact some successful regulation while at the same time being able to put that hefty revenue to good use.

[newtothegame]

14. Couldn't we all just pay for it?

We're all going to use it.

[Hello_Kitty]

17. Hey, I'm for single payer myself.

But that's too radical, despite the majority of Americans supporting it.

[dionysus]

10. fine by me.

[ShortnFiery]

12. Final Health "HIT" Bill is more like it = more middle class dollars GIFTED up to the super-rich. eom

[StrongBad]

19. Curb your hysteria

It is not a gift when a service is performed in return. Yes, Americans will be paying a fee for health coverage (though those who truly can't afford it will get subsidized), but the purpose of the taxes and fees in this bill is to force insurance companies to cover and treat all citizens without discrimination.

I'm sure you're going to counter by saying that it's all a sham. That no services ever get performed when you have an insurance policy anyway. Yet again, you would be missing the point. The reason these industries are going to be penalized and fined under this bill is to induce them to become more efficient in treating more people. They're inefficiency will be directly correlated with how much they are taxed.

In the end (which is not too distant), an exponentially greater amount of Americans (90%+ according to most estimates) will have access to the treatment options usually made available to an upper-middle class citizen.

But that's bad, right?

[bread_and_roses]

22. er...insurance cos don't "treat" people

health care providers "treat" people. I can't even be bothered to go into all the reasons this is an abomination, just look at who supports it and who opposes it and you'll get the drift pretty quick. As for Obama's support of it, it's a profound betrayal of very hard working people who worked like hell to get him into office. It's sickening.

[StrongBad]

25. Of course they don't, but they PAY for the treatment to be performed.

I can't believe you entered a reply simply to point out the obvious intent of meaning while furthermore not supplying a decent argument against the bill other than "look who supports it".

Ok let's do just that. Most Democrats support it. So does most of the country.

Now what?

[bread_and_roses]

31. you really think most of the country supports the mandate and the tax on good plans?

I don't think so. I don't need to make a decent argument against this monstrous give-a-way to big Insurance and big Pharma vampires - it's all easily accessible on the web, you can read as well as I, why should I repeat what others have said better? And yes, I trust EPI a hell of a lot more than I trust any of these bought and sold corporate shills serving in Congress, and far more than I trust Obama at this point. I also trust the AFL-CIO knows what they are talking about when they tell me that this tax is going to hit "Chevy" plans, not just "Cadillac" plans - and btw, the entire usage of that word - "Cadillac" for plans THAT ACTUALLY COVER PEOPLE'S HEALTH NEEDS WITHOUT BEGGARING THEM - cause that's what these so-called "Cadillac" plans are - is abominable and a betrayal of the very core principles that we all fought for in health care reform.

[StrongBad]

32. Ok so I did some research and according to Rasmussen 42% support it currently

http://www.rasmussenreports.com/public_content/politics/current_events/healthcare/september_2009/health_care_reform

So fine, it isn't presently a majority like I initially stated. It had been previously around 50% but people have been souring recently.

I would imagine that the people opposing the bill at this stage are Republicans and a chunk of centrist voters currently covered by their employer. The truth is that they aren't going to see much difference in their coverage for quite a while. The bill is orchestrated to influence the insurance industry to more scrupulous behavior but it won't come overnight or within a few years in my opinion.

However, the currently uninsured and unemployed will have fairly quick tangible benefit from this bill, making it quite a pragmatic triumph in my opinion. Additionally, the precedents being set by this bill will always leave the door open for more liberal reforms in the future.

[levander]

33. You need to check the polls again..

So fine, it isn't presently a majority like I initially stated. It had been previously around 50% but people have been souring recently.

Since June, more people have been opposed than favored this plan. And before June, it was much less clear exactly how they were going to do it. Pollster.com is the easiest place I've found to get an idea of where the polls are at: http://www.pollster.com/polls/us/healthplan.php">Click

They've been "souring recently" because as soon as it came out how stupid this plan is, people turned against it.

[Clio the Leo]

15. Pity that you even needed to post this, but thank you anyway. NT

[PBS Poll-435]

16. MTE. nt

[SpartanDem]

20. But it's a giant giveaway

[uponit7771]

21. But Obama is teh corporatist!!!

[Jeff In Milwaukee]

26. Well he is....he's just not very good at it!

Nobody can be good at everything. Hey, even Superman had a hard time with Kryponite!

:rofl:

[ProgressOnTheMove]

23. Exactly, Pres. Obama has been massively misrepresented because the last administration jaded...

people's perceptions to a very high level. All Obama really has tried to do is find solutions in a nation where conservatism and a misplaced trust in corporations is prevalent on the right. He's trying to accommodate that theory whilst moving forward and regaining a trust in government so progressive policy is easier to pass in the future. A left leaning utopia is not where we are but it's where we can be down the line and Pres. Obama is laying the foundation. Will he be appreciated for it once this day arrives probably not, but he will of been responsible for it once it does. He's not President to just the left unless the country as a whole is more left leaning and that's where we've got to work to be. We have the twitter, we have the coffee chats at cafes, we have the printer and paper. We can bring folks over to our corner if we are persistent.

[jenmito]

24. Funny how the critics here are either silent or still misrepresenting the bill...

just like Sarah Palin is still talking about "death panels" which has been deemed the "lie of the year."

[Kurt_and_Hunter]

27. The spin in this thread is weird. The headline is insurers still asking for better deal

Insurers are not telling investors to dump their stock because they're going to be hit so hard.

They are LOBBYING for further breaks.

"Insurance companies are pressing lawmakers to peel back a new tax on high-value insurance plans that President Barack Obama wants to include in the final bill."

Of course they are complaining about the cost while the bill is still in process. Duh.

And of course they are not offering a comprehensive analysis of anything that might benefit them.

When you are relying in what Insurance Companies say to spin the healthcare plan it's a problem.

[uponit7771]

28. "insurers will face up to $225 billion in new taxes and fees under a final health bill"

...don't see how this is positive for HCI's...this confirms the OP's title no?

TIA

[Kurt_and_Hunter]

29. Oh geez...

"insurers will face up to $225 billion in new taxes and fees under a final health bill"

Do you think that is a net figure? If so, why?

"insurers will face up to $225 billion in new taxes and fees under a final health bill"

Yes, and what will they gain? If zero then they're out $225 billion. If $500 billion then they're $275 billion... and so on.

Would that "confirm the OP's title"?

The OP is using a health insurance LOBBYING CLAIM to make a factual claim about how tough life is for insurance companies.

If you don't see the difficulty then that's what it is.

[Nicholas D Wolfwood]

30. But it's okay to rely on teabagger arguments?

Really?

[Hello_Kitty]

34. Did he say that?

Really?

[boppers]

35. Combine the House *and* Senate taxes.

It's not like health care is getting any cheaper.

[TheKentuckian]

37. They aren't going to pay the tax because they'll just kill benefits as the tax intends

Don't fall for the okiedoak. This is exactly the funding source the industry wants and that is why it has been in the whole way from back when the industry and Finance staff wrote the damn thing.

How can anyone that has observed this process, this industry in particular, and criminal corporations in general believe that they are going to pay shit? Don't be ridiculous. Love Obama all you want but only a complete dumbass would even hope to believe that he will affect this craven culture and shady practices.

The headline should be: Consumers should expect a gradual reduction in benefits with additional costs being shifted to them as insurers react to Max Tax squeeze play.

[frazzled]

38. The bill contains regulations on insurance that require certain coverage standards and limits

You can't keep taking one aspect of the plan without mentioning the others. That is to say, you can't discuss the excise tax without also looking at the new regulations. You can't discuss the mandate without looking at the subsidies.

I think what the anti-excise-tax left is failing to think about is how this constant negotiating for benefits instead of wages has been a huge boon to the insurance industry, while keeping workers' wages flat. Someone needs to do the actuarials for our (the workers') side of the fence--paying $21K a year (and going up) over a lifetime of work versus the expected benefits. I believe unions should start to negotiate for actual benefits instead of simply higher cost plans. To refocus, that is, on the real problems in the benefits/wages issue. There are many labor and health economists who have done many years of study on this, but it's of course complex and speculative. We need more information, in a distilled manner ... not just yelling and screaming for "more of the same."