Obama Health Care Plan is on the Web
update: Igor Volsky provides a good summary of the proposal
As far as I can see the Snowe plan worst tax ever free rider provision to prevent employment of people who need jobs provision is included.
I believe I am the first person to publicly object to this proposal when the gang of six said that they were considering it.
Any company with 50 or more employees that does not offer coverage and whose employees access taxpayer supported health programs will be required to help offset the costs to the American taxpayer.
update 2: In comments Bruce Webb explains that the worst tax ever is almost certainly not included. It wasn’t in the Senate bill. The Senate bill has a free rider provision that sounds vaguely like the Snowe worst tax ever proposal, but doesn’t have the same perverse effects. The administration hasn’t released legislative language, but presumably didn’t reintroduce the strong perverse incentives.
The point is that Snowe wasn’t thinking precisely when she made her proposal and so can easily be convinced that something quite different is what she had in mind.
On the other hand she voted against cloture anyway, so I don’t see why the administration didn’t just go with the house approach which is better than the not the worst tax ever version of the free rider tax.
end update 2
There is a tax increase on the rich so that’s something
Broadened Medicare Hospital Insurance (HI) Tax Base for High-Income Taxpayers
Under current law, workers who earn a salary pay a flat tax of 1.45 percent of their wages to support the Medicare Hospital Insurance (HI) trust fund, but those who have substantial unearned income do not, raising issues of fairness. The Act will include an additional 0.9 percentage point Hospital Insurance tax for households with incomes exceeding $200,000 for singles and $250,000 for married couples filing jointly. In addition, it would add a 2.9 percent tax for such high-income households to unearned income including interest, dividends, annuities, royalties and rents (excluding income from active participation in S corporations).
In exchange the cadillac plan excise tax is reduced. It now starts at a higher level and there are corrections for plans which are well read it
Reformed Excise Tax on Insurance Companies
Beginning in 2018, the Act imposes an excise tax on insurance companies to help finance the tax credits and other portions of comprehensive health reform.
The excise tax will only apply to premiums above $27,500 for families and $10,200 for singles in 2018 and would be adjusted at the consumer price index plus one thereafter.
The excise tax includes important new permanent reforms that will focus its impact on plans that provide the highest-cost benefits – not those that happen to cover the highest-cost workers. These include permanent adjustments based on age, gender and high-risk professions.
I’d say the financing is improved. It seems to be a genuine compromise between the House and Senate plans.
There is no hint of a public option.
I guess it’s OK. It’s very important that the changes not add to the deficit or they can’t be implemented by 50 Senators plus Biden. I’m angry about dumping the public option now that cloture is out of the question anyway, but I’m not surprised (leaks made this very clear).
I can’t quite believe that the worst tax ever version of the employer mandate is still in the bill. I hope I’m misinterpreting the very brief explanation.
i can’t claim to understand the mechanics, much less your expostition
but it sounded to me like you were claiming that requiring employers of more than 50 people to provide health care or pay a “tax” would “kill jobs.”
I suspect this is nonsense. IF an employer can make money he will hire people. And if the only way he can make money is not to pay them enough for health care, one way or another, we probably don’t need his business.
I suspect, just suspect, that you have fallen for another Republican fairy tale: If you pay workers enough, they will just get lazy and want more.
Yes, let’s kill alot of businesses, we don’t need those jobs anyway.
At least we know what plan we are talking about.
Well if it is nonsense it is nonsense that lots of economists that do Social Security policy share.
I have yet to read the plan but it seems to me a lot rides on the definition of “whose employees access taxpayer supported health programs”. If that includes everyone who gets a subsidy to buy insurance in the exchange I can’t get too excited, because that could include households making up to $88,000 (400% of FPL). It is not like employers are going to conclude ‘hmm I better not hire anybody under a wage of $90,000 because I’ll have to kick in a couple of G’s as a fee to the government). Now if this fee only applied to those folks eligible for expanded Medicaid then it would be different, but given how many Americans actually qualify for exchange subsidies maybe not so much so.
I don’t see how any plan that is related to Obama’s original plan has any chance of passing. They don’t have the votes anymore.
In reading the summary I am inclined to my view that this is not just the Free Rider provision, but instead just implementing a compromise between the House and Senate Bills as to what a ‘larger employer’ means. I believe under the original House Tri-Committee Bill 50 or more employees meant you were a ‘larger’ employee and HAD to provide coverage. In light of that this would be a tax break.
The problem is that the tax depends not on employment but on the subsidies that the employees receive from the federal government to help them buy health insurance. This means that the tax liability of the employer is not a function of the wage they pay but a function of their employees family income and it *decreases* if the employees family has lots of other income while it increases if there are lots of people who need insurance in the family.
Imagine an employer who can hire a single mother with 3 kids or a man married to a woman with a high income. The employer saves by hiring the man who doesn’t need the job, not the woman who does need the job.
The house plan imposes a penalty based on payroll so it doesn’t have this effect. My preferred option is to say that if it is found that a firm has employed someone without providing them with insurance then the firm is confiscated by the federal budget (a trillion percent payroll tax penalty would do that by bankrupting the firm).
The problem with the Senate/administration approach is not that employers pay a tax but that the tax depends on exactly who they hire in exactly the opposite way that is desirable. This makes bad effects of the tax very large, since it is hard to convince an employer who wold otherwise hire not to hire anyone (elasticity of labor demand is fairly low about 0.5 maybe) but very easy to convince the employer to hire one person and not the other. For some jobs, employers know basically roughly about nothing about the people they hire.
I sure didn’t fall for anyone else’s fairy tale. As far as I know I am the first person anywhere to make this argument. Here on this blog. http://tinyurl.com/yfcn57m
I was not however the last. The same argument was later made by many others not all of whom are Republicans. For example, I don’t think that Ezra Klein is a Republican http://tinyurl.com/mhp5zw . He wrote “I have not found one person — not one — who thinks this policy is a good idea. The fate of the “free rider” provision, which seems to be a favorite of Olympia Snowe’s, is going to be almost a laboratory test of whether the policy community can persuade Congress to avert an obvious and completely predictable disaster. “
Well now we know. The consensus of the policy community has no effect on the Senate *or* the administration.
Igor Volsky has a much better summary of the proposed bill.
He is quite sure it includes the free rider provision.
The argument that the subsidies ceiling is high seems to include the assumption that the subsidies are constant and then suddenly drop to zero (creating an infinite marginal tax on income). Of course they gradually decline reaching zero at the ceiling. So employer liability decreases in family income pretty much from 4/3 of the poverty line up to the ceiling.
Also note, even if the penalty were a constant per employee rather than being higher for employees from poorer or larger families it would still be monsterously regressive.
To defend the proposal, I think one has to argue that it is preferable to a payroll tax on firms which don’t provide insurance (that’s the House’s approach).
Given all the different versions of the Senate bill and the fact that the Chairman’s mark in SFC was released in non-legislative language it would be difficult to go back and reconstruct everything. But I don’t recall that the original free rider provision was tagged to precise dollar levels of subsidies through the exchange but were indeed on numbers of participants. Thus in your example an employee who was already covered by either an employer or other individual family plan and thus did not have to individually participate himself in the Exchange would indeed represent a break to the employer who would then be better off hiring his covered nephew than a single mother. But since employers have no direct way to track total family income of a two income family and so would have no clear idea of what level of total subsidy that family would be getting it is difficult to see that the employer would have enough information to distinguish between Exchange eligible individuals in quite the way he would in Medicaid Yes/No. And even for his own single employees he might not have a good idea about outside income one way or another.
Still the House approach was clearly superior as shown among other things in a significantly higher coverage ratio in its CBO score.
That’s because you apparently are not tracking the issue as it has developed over the last week. And Obama never had a detailed ‘original plan’ to start with.
The same dynamics are in place. If they change the senate bill then they have to vote on it again and the republicans can filibuster it. The meeting looks ridiculous to me since the differences are irreconcilable. Republicans just can’t allow the government to move in and start exerting the kind of control that Obama and the left side of the democrats want to impose on us. Nobody forced anyone to take Bush’s tax cut. A liberal could have mailed it back. But we don’t have the same choice with this heavy handed healthcare imitative.
And Obama never had a detailed ‘original plan’ to start with.
I seem to remember a plan that we were told to read that I never bothered to. That was the democrat plan. Obama is the number one democrat, he supported the plan, so as far as i’m conserned it was his plan. He can took to you guys for plausible deniability.
Robert it isn’t often that I agree with you, but this time we find freezing in that low hot spot. Do we have an implementation plan yet? It is going to the House first? Or the Senate?
CBO tells us we do not have a bill yet with the current “O” version, so when we have this come out of this first committee it will be different. Bigger. More costly.
What amazes me, is the complete arrogance shown with this latest approach. Jamming it down the voters’ throats is a political strategy?
November is closer every day.
Krugman tells us that Anthem is in a death spiral. He says that healthy people are leaving the plan and what they have left is a pool of people with above average heathcare costs. So Anthem is raising insurance premiums to pay for this reality. Now Obama is saying he wants to prevent insurance companies like Anthem for raising rates. But Krugman tell su they need to raise rates because they are in a death spiral and they need higher rates. So many disconnects.
Krugman tells us that Anthem is in a death spiral. He says that healthy people are leaving the plan and what they have left is a pool of people with above average heathcare costs. So Anthem is raising insurance premiums to pay for this reality. Now Obama is saying he wants to prevent insurance companies like Anthem from raising rates. But Krugman tell us they need to raise rates because they are in a death spiral and they need higher rates. So many disconnects.
I stand corrected.
I very tentatively guessed that “shared the cost of the subsides” (quoting journalistic accounts from memory) might meant shared the cost of the subsidies.
Note I said that I can’t tell if the administration proposal is the Snowe worst tax ever proposal. I should have added that I also didn’t know if the Senate bill is the Snowe proposal or something that sounds similar but creates very different incentives.
I’m not completely reassured yet. I guess I can look up the Senate bill and figure out the administration proposal using Volsky’s explanation of the changes which won’t be of he sort to make a mildly bad tax horrible (there is a consensus in the policy community).
I guess I’m saying “thanks for the information Bruce, but a link and an excerpt would of been nice.” Obviously what this really means is “I don’t like to stand corrected.,”
Given (1) Obama’s repeated claim to be “in favor of” the public option as a “good idea” to rein in costs, (2) the fact that when understood as a choice one can make it is very popular, (3) it is almost universally popular (and mostly very, very popular) among Democrats, (4) Obama is a Democrat, (5) it is to be funded entirely from premiums and is not intended to draw operating funds from the general treasury (tax revenues), and (6) will reduce the overall costs of the reform according to the CBO, eventually even chippiong away at the long-term deficit, what in hell can possibly account for the palpable hostility to the concept from the administration?
When the public option was revived in late September and early October with the state opt-out concept, with a comprehensive range of Democratic opinion from Baucus and Nelson to to Carper to Schumer to Howard Dean expressing a real intereset in what seemed like the ultimate in fairness — states that don’t want it don’t have to have it — Emanuel, Axelrod and Jarrett went on the Sunday shows and quite deliberately talked it down or showed a distinct lack of interest in contrast to Democrats generally in Congress. They doid this instead of taking the obvious politically-saavy step of showing interest without being committal, while giving it a framework that would dominate the media narrative for a week or two — with Chris Matthews et al being forced to declaim, “How can you disagree with that? What could possibly be fairer?” — and letting it play itself out. All they would have had to say is that, while they are still studying it, the President thinks it “sure sounds fair to everyone,” possibly adding that it seemed the most collegial approach in the Senate where one Senator is not telling other Senators their citizens cannot have a choice that they want.
Now you see the same annoyance playing itself out over the Senators’ letter, with Sebelius cynically saying, “Sure, we’ll support it if that’s what they want” — while you know damned well Emanuel is threatening all the rest of the Democratic Senators not to sign on, accompanied by a few especially vicious expletives that seem to be reserved solely for the strongest supprters of Obam.
I have my own speculation about what accounts for it. Even if it may be the pragmatic course, it’s not very pretty, what with toying with those strongest supporters by continuing to declare commitment to something that obviously, now, they never were committed to. I’m especially interested in the wisdom of Bruce Webb on possible explanations.
The Dems will pass the healthcare bill with 51 votes and reconciliation, negating the Republican partisan blocking efforts. As long as they keep under the $950 billion(?) or at it or pay for it within the bill, there doesn’t (I believe) need to be a 60 vote super-majority.
Cantie, Dems can pass it now, they could have passed it earlier, they will not be able to pass it after Nov. Passing it now with reconciliation will just insure that by Nov. the voters have even more reason to vote them out of office. It’s their super-majority. Use it at risk.
Obama presidency, approaching the cliff, guns the accelerator.
The bookies have it as just better than a 1 in 3 chance that Obama’s bill will get passed.
Will ‘Obamacare’ health care reform become law in the United States?
‘Obamacare’ health care reform (see contract rules) to become law before midnight ET 30 Jun 2010
This contract will settle (expire) at 100 ($10.00) if a healthcare reform bill is passed into law before midnight ET on the date specified in the contract. The contract will settle (expire) at 0 ($0.00) if if a healthcare reform bill is not passed into law before midnight ET on the date specified in the contract. Expiry will be based on the official passage of a healthcare reform bill into law, as reported by three independent and reliable media sources.
For purposes of this contract a healthcare reform bill is considered one of the following:
– The Affordable Health Care for America Act (H.R. 3962)
– The Patient Protection and Affordable Care Act (H.R. 3590)
– A bill reconciling the differences between the two bills named above
If any of these bills are passed into law the contract will expire at 100. If none of these three are passed into law the contract will expire at 0. Due to the nature of this contract please also see Contract Rule 1.7 Unforeseen Circumstances. The Exchange reserves the right to invoke Contract Rule 1.8 (Time Protection) if deemed appropriate. Any changes to the result after the contract has expired will not be taken into account – Exchange Rule 1.4 Please contact the exchange by emailing email@example.com if you have any questions regarding this contract before you place a trade.
A federal government run health insurance plan to be approved before midnight ET 30 Jun 2010
Commie Cappucino Cafes! In Calabria!! Or Capua!!!! Or the Capitoline Hill!!!!!
Snark aside Obama’s appointments to the Debt Commission including Alan Simpson and Alice Rivlin are truly scary. Anyone that simply gives the Obama Admin the benefit of the doubt is just ignoring the facts. Skepticism and triple checking everything is mandatory.
save the rust belt,
Different burdens affecting labor “costs” affect sales among competitors, especially across borders with open trade.
The burden of health insurance, and paying OASDI payroll taxes on the US auto industry represented a significant percent of the cost of making American automobiles.
At least, relative to the burden of social safety net on payrolls endured by a number of the price competitive manufacturers exporting onto the US market.
Did that kill a lot of good jobs?
You would have liked this site before the 2006 election. Times change.
Hey man, where did everybody go. Is there a party that I did not get an invite to.