Friday, October 09, 2009

40 percent excise tax means perhaps 120% increase in employee costs with Baucus plan

If this Baucus government health care insurance bill goes through, look for way more than the stated 40% increase in your health insurance costs.

Why more, you ask?

As an example, let's say your employer covers 2/3 of the true cost of the health insurance they provide for you and your family. You pay $7,000, and the employer pays $14,000 of a $21,000 true cost (that's about what I'm paying for my family at my workplace, and that's the 'less' expensive plan).
The Baucus bill will tax that plan at 40%, thus adding $8,400 to the total real cost. Now the plan costs $29,400 for a family.
The employer will pass that increase on to you (simple economics).

So now you pay $8,400 + $7,000 or $15,400.

That's about a 120% increase in your out of pocket expenses.

Each company will have different plans, so the number 120% may vary, but a realistic range would span anywhere from 70% to 150% increase simply because of this new 40% excise tax. Money doesn't grow on trees, somebody's got to pay the taxes so that government, and their newly concocted inefficient health rationing bureaucracies, can control, regulate and divvy up health care; they're really good at 'spreading the wealth around'

The CBO report that said the health care bill won't raise deficits makes it clear that the Baucus bill's reduction in future budget deficits comes not from controlling government spending or reducing health care costs, but because of a rapid escalation in tax revenues.
The bill imposes a 40 percent excise tax on health-insurance plans that offer benefits in excess of $8,000 for an individual plan and $21,000 for a family plan. Insurers would almost certainly pass this tax on to consumers via higher premiums. As inflation pushes insurance premiums higher in coming years, more and more middle-class families would find themselves caught up in the tax.
In fact, overall, the tax increases in the bill are more than double the amount of deficit reduction. This isn't a health care efficiency bill or a cost containment bill. It is a tax and spend bill, pure and simple.


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