"A Junk Insurance Tax"

To follow up on Tuesday's post about Massachusetts' healthcare, it bears repeating: healthcare reform has to make people's lives better. In other words, people have to like this crap. And this isn't cutting it (boldface mine; italics original):

When it came time to renew my own insurance, I asked the insurance broker, what it would cost to buy good insurance in New York State. She said, "sit down". I held my breath in anticipation, she said, "$1300 a month."

When it came time for me to renew my health insurance which was a barely adequate policy with a $500 deductible, the new premium came with a 32% price hike. If I wanted to keep my policy with the $500 deductible, I'd be paying $742.98 a month and if this so-called reform were the law, I'd get hit with the Cadillac Tax for what amounts to Chevrolet insurance. Mr. Obama, I was doing better, way better with, holy Jeebus, George Bush!

So, when I received my premium renewal, like millions of other Americans hit with huge price hikes, I downscaled. In order to maintain any insurance, I went deep into the land of high deductible junk insurance. I now have a $3000 deductible, I pay $500 per day (with a 3 day maximum) for any hospitalization, with no cap on this extra charge. So for example, if I am hospitalized four times in 2010 and each hospitalization is for four days, my portion for each hospitalization will be $1500 ($500 x 3 days) for all four stays! This would be a staggering additional $6000 per year out-of-pocket in addition to the monthly premium!

My office visit co-pay went from $20 to $40, and that's if I remain in the network. Ambulatory surgery co-pay which had been nothing goes to $500 for each event. All of these additional charges were the literal price I had to pay to maintain any insurance at all. And for this, I'm blessed to pay $560.00 a month, which brings me perilously close to paying the outrageous Cadillac tax which kicks in at $8500 dollars.

...Once again, the political class responsible for this legislation, doesn't have any idea that most Americans don't have an extra $200-$300 at the end of the month for health insurance. And then to add myriad co-pays and deductibles on top of that, oh well, good luck to the IRS trying to collect the fines from all these hard working people.

Some Democrats should have made it clear to the Blue Dogs that they are going to be in serious political trouble with this crap. And it's their own damn fault.

I only hope a close Senate election in MA serves as a wake up call.

Update: It appears that some Democrats are starting to realize this will lead to some serious political blowback:

But Representative Jerrold Nadler, Democrat of New York, said: "The view of many progressives is that the tax is unacceptable. It would affect a lot of middle-income people."

Mr. Nadler said the politics of the tax should worry Democrats. In effect, he said, "the tax tells blue-collar workers that you should pay higher taxes and get lower benefits to help finance coverage for the uninsured."

Yes, it does.

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Anyone want to start a pool on how many people will pay the fine rather than the (much higher) premiums?

By D. C. Sessions (not verified) on 13 Jan 2010 #permalink

I am amazed at how upset people are at the "unfairness" of the tax on high cost plans. Yet, people are not upset at how some people have to pay for their insurance completely with after tax dollars if their employer does not provide an insurance plan. If the people outraged at the tax on cadillac plans showed the same outrage that others have to pay for insurance completely with after tax dollars, then I could sympathize with them.

@Sam: Well that was the entire point of health care reform, at least in the beginning. Especially for those that wanted single payer or a very strong and quite well subsidized public option. Now that it's hit the corporate giveaway phase, everyone is pretty much outraged by everything. A large part of the outrage is that this will mostly hit union workers that gave up pay raises for better health care plans. Plans that will now be taxed until they scale back their plan and lose benefits.

No matter what a person thinks of the idea of reform, it should be a given that any "health care reform" that ends in people actually losing health care is a mistake. Even if there's a net gain in the number of people covered, it means nothing if they can't afford to use it.

I do find it amusing that we're starting to see the "Holy shit! Maybe union busting wasn't such a hot idea." reaction from the party.

By JThompson (not verified) on 13 Jan 2010 #permalink

$500 a day for hospital!! No wonder illness can send you bankrupt over there.

Here it's $200 per admission. So my eleven hours on the operating table, eight days in intensive care and another five days in a surgical ward was $200 total.

By Keith Harwood (not verified) on 13 Jan 2010 #permalink

Frank Cornish, hold your horses. Come here where it's free (UK). I had an aortic valve replaced and paid not a penny from admission to discharge. Nor do I pay for a lifetime of regular coagulation tesing. But I did claim on a small ($15 per month equivalent) "inconvenience" policy I hold, and they sent me $500. So I came out ahead on that.

"Here" is Australia. See it in the graphic given on a previous thread, showing half the health costs of US and a greater longevity.

That $200 per admission is for a private hospital. Public hospitals don't make a charge. I've been in both (I have a season ticket for the operating theatre at Westmead), there's not much difference between them; the food is better in private (unless you are being fed brown glop through a tube direct into your stomach) and as a public (i.e. uninsured) patient in a public hospital you have to pay to watch television.

The health insurance is reasonably priced and most people have it. I'm not sure how much I pay, it's between $700 and $800 per annum.

By Keith Harwood (not verified) on 14 Jan 2010 #permalink

I'm sorry, what? I'm sitting here in Vancouver, and I've been increasingly astonished following this whole health care reform debacle.

I made $70k last year. My total tax bill, including the equivalent of social security, was $15k. Medical insurance, including the employer paid portion, was $200/month for me and my wife.

I've had an appendix removed; that was free. I've had minor surgery a couple times in the hospital; free both times. Prescriptions are fully covered, including birth control. Doctor and dentist visits are always free. I broke a finger 5 years ago and didn't pay anything, nor did I pay for the month of physical therapy sessions that followed.

I'm absolutely stunned that anyone would have to pay as much for medical care in a month as I pay in a year, and then still have to pay even more if they actually use it!

But I think the thing that stuns me the most is that so many Americans actually don't want what we have. Obviously our system isn't perfect but it seems like there's an instictive fear of having the government involved.

Looking at the US health system from the other side of the world, getting the information from newspapers, television and the net, it seems to me that Americans are proud of the inordinate cost. It seems to be connected to American exceptionalism.

American healthcare costs twice as much as equally or more effective healthcare anywhere else in the world. Therefore America is exceptional. Therefor it is a good thing. Therefore making it cost more is even better.

Therefore people such as our esteemed host here, who complain about the cost, are anti-American and practically traitors.

By Keith Harwood (not verified) on 17 Jan 2010 #permalink