Monday, November 23, 2009

Kinzi Blair's health plan 

AP profiles San Jose, California, kindergarten teacher Kinzi Blair to illustrate part of the debate about who should bear the costs of funding health care reform. Blair makes $46,000 per year, but has a "Cadillac" health plan, and her employer pays $11,000 per year of premiums. She has no deductible and a $10 co-pay, with extensive coverage.

So, it turns out that some regular people -- not just rich corporate tools -- have nice health plans, some of which would be potentially subject to new taxes under the House or Senate plans. Under the Senate plan, according to the AP piece, Blair's insurance company would be taxed 40% of the amount of her premium greater than $8,500, or about $1,000. Somehow, this is not construed as a tax on Blair (although it is highly likely that the tax on her benefits will cost her something directly in the long run), because otherwise that would be: a) a new tax on someone making less than $250,000 per year; and b) a new tax on a member of a key Democratic Party constituent, a teacher.

The article quotes a Democratic lawmaker regarding his take on the hoped for "gross-up" effect:
One of the arguments for the Cadillac tax is that companies would spend their money to pay higher wages instead of providing rich benefits. Or so the thinking goes.

"The notion that there will be a corresponding increase in wages? You walk into a teachers' lounge or a break room in a factory and say that, you get laughed out of there. Maybe they'd chase you out of there," says Rep. Joe Courtney, D-Conn.
Courtney quickly scrambles back on the bus with a quote that would make Willie Sutton proud ("Why do you rob banks?" "Because that's where the money is."):
The House bill includes a 5.4 percent tax on individuals making more than $500,000 and families making more than $1 million. Courtney says that's the fair way to pay for reform.

"This is a slice of American society that has gotten a very good ride over the past 10 years," Courtney said.
I'm going to go out on a limb here and speculate and say that there will not be anywhere near enough $1 million income families to come close to covering even a fraction of the cost of the bills, and that the existing forecasts are static (don't take into consideration the tax planning reaction of such families) and way high. But, hey, why limit it to 5.4% on amounts over $1 million? Why not 6.9%? Why not 9.6%? Why not 20%? To paraphrase Napoleon regarding Vienna, if you're going to kill the goose, kill the goose, and don't worry about any foregone golden eggs. Willie Sutton wouldn't stop at a measly few percent of the cash on hand at a bank.


By Blogger Georgfelis, at Mon Nov 23, 06:57:00 PM:

Correction: Willie Sutton claimed to have never said the quote that he is credited with.  

By Blogger Assistant Village Idiot, at Mon Nov 23, 09:22:00 PM:

Note Courtney's choice of words: has gotten, and ride. Nothing is more necessary to class warfare than the constant repetition of the idea that those who have wealth do not deserve it - left unstated, but understood, is the followup "and you, dear voter, would get some of that."

The Arts and Humanities Tribe deeply resents that others, unblessed by them, have status and influence.  

By Blogger Don Cox, at Tue Nov 24, 05:20:00 AM:

"her employer pays $11,000 per year of premiums."

Which if there was a good health service, could be added to her salary instead of being given to an insurance company.  

By Anonymous Anonymous, at Tue Nov 24, 08:14:00 AM:

"Which if there was a good health service, could be added to her salary instead of being given to an insurance company."

No, it could not. The $11,000 represents her insurer's best guess approximation of what needs to be put away and invested in order to pay for her ongoing healthcare needs at an agreed (by contract) level. The number does not change if the level of health care does not change. If the Gov't were to pay for health care, it would require the same $11K from Kinzi or from her employer or from us.

That money also needs to be invested and to grow to provide for her future healthcare, otherwise you have the Social Security system, and we all know how well that is turning out...

Jack Hawk83  

By Anonymous Anonymous, at Tue Nov 24, 08:34:00 AM:

"This is a slice of American society that has gotten a very good ride over the past 10 years," Courtney said."
This gives me hope. In ten years this will turn around. After all there will be a different group of people who have "gotten a very good ride".  

By Blogger Chris Wysocki, at Tue Nov 24, 04:10:00 PM:

Would the "Cadillac Plan" tax really impact Ms. Blair? She's a schoolteacher; her salary and benefits are funded by the taxpayers.

If Obama raises the cost of her benefits the school district will just increase property taxes to make up the difference, won't they? That's how a NJ district would do it!  

By Anonymous Blacque Jacques Shellacque, at Wed Nov 25, 02:33:00 PM:

A schoolteacher, eh? And in a major metro area in California, as well.

Heh, I wonder who she voted for last November....?  

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