Some States and Unions Get Breaks Under Baucus Conceptual Plan

Chairman Max Baucus's Mark of the so-called Baucus "conceptual plan" is now available here.  Nice that the People can now read it after the vote in the Senate Finance Committee has already taken place.

Kimberley A. Strassel found some interesting special favors for certain mostly Democrat states in the "bill."  She reported on this in The Wall Street Journal on 15 October 2009.  Among her findings,

• The states will have to cover an additional $37 billion in expenses, unless the state is Nevada, Oregon, Rhode Island, or Michigan.  All of these special states will have their additional expenses paid for them for 5 years.
• Those insurance plans costing more than $21,000 per year will be taxed on the excess above that threshold, unless you live in one of the 17 most expensive states, many of which are most expensive because of extensive state requirements for insurance.  New York and Massachusetts are among these states and tax payments will start at $25,000 in those, mostly Democrat, states.  Charles Shumer (D-NY) pushed this one through.  The higher thresholds for taxation do end in 2016.
  
• The pharmaceutical companies will be taxed, but this hits New Jersey hard since 15 of the world's 20 largest drug companies have operations in the state.  NJ Senator Menendez has worked out a $1 billion tax credit for companies engaged in pharmaceutical R&D.
• Senators Debbie Stabenow (D-MI) and John Kerry (D-MA) clearly expect a large increase in insurance premiums despite the public claim to the contrary, so they required that a $5 billion reinsurance program be included to reduce the added costs to union members.

Most of the senators are still waiting to get their special state goodies inserted into the bill to somehow be  assembled on the Senate floor.  As usual, hypocrisy rules the Senate, and the House, and the Presidency.

Government Health Care Insurance Cost Fraud

The Democrats and Max Baucus have pulled the wool over the American people's eyes big time.  Headlines everywhere said the CBO scored the "conceptual plan" of the Baucus Senate Finance Committee "bill" as costing $829 billion and yielding a reduction in the federal deficit of $81 billion.  In these fraudulent numbers they counted only a part of the costs known to be in the "conceptual bill", pretended cost savings for Medicare and Medicaid would occur, which will not occur, and counted tax revenues for 10 years, but cost outlays for only 7 years.  They also ignored the costs being dumped on the American people and the states entirely.

Ex-CBO director Donald Marron believes the Baucus "bill's" uncounted health care new federal spending costs bring the total federal government costs to $904 billion.  New mandates on state spending put $33 billion of additional costs on state governments.  Worst of all, the PriceWaterhouseCoopers study projects the insurance costs we private individuals are going to have to pay will go up by an additional $4000 per family by 2019 and single person coverage will be up by an additional $1500 by then compared to the situation without this bill.  The Massachusetts Taxpayers Foundation has provided a rule of thumb from the Massachusetts health insurance mandate experience: the private sector will pay for 60% of the total costs, while the government books will carry only 40% of the cost, to be passed on to the taxpayer.  So, the private sector will pay 1.5 times as much as the public sector.  Thus, the real cost of the Baucus plan, the lowest cost plan of the many in Congress, is (1.5) ($829 + 33) + $904  = $2,197 billion or $2.197 trillion.

Since 2003 Congress is supposed to have made cuts in Medicare payments to physicians according to law, but every year Congress has refused to allow the cuts, probably because they are very aware that physicians are already underpaid under Medicare.  Such payment reductions are counted on to save $234 billion in the next 10 years according to the Baucus "conceptual plan" and they are very unlikely to happen.  Removing these "savings" leaves one with a government spending increase of $153 billion.  The projected tax increase revenue is also going down from the earlier projections, because Congress is reducing the tax penalty for people who do not have qualified mandated health insurance plans.  Major individual penalties are apparently unpopular!

There are still other reasons that the government costs of this plan are likely to be badly underestimated.  For one thing, taxpayers are supposed to subsidize the costs of those making less than 400% of the poverty level income.  This means 91.5 million people under the age of 65 are eligible for such subsidies.  The CBO estimated that only 29 million of these 91.5 million will become subsidized health insurance plan holders.  The actual number may prove to be much higher, by some estimates, 45 million is a more likely number.

The PriceWaterhouseCoopers study of the costs due to the Baucus "conceptual plan" believes that it will cause health insurance costs to go up an additional 18%.  But, be aware that the costs are very dependent upon which part of the insurance market someone is in.  Those who work for a large employer will see their costs go up by an additional 11%.  Self-insured employers costs will go up by only 9%.  These are the lucky ones.  If you work for a small employer with fewer than 50 employees, the health insurance costs will go up by 28%!  On the other hand, those poor souls in the individual market (non-group) will see costs go up a whopping 49%.  If your employer opts to pay the penalty and to drop out or not offer insurance coverage, those individuals left on their own will see these huge 49% increases.  Of course some will qualify for the government subsidy to offset a portion of that cost increase.

It is always easier to bring on change that destroys than it is to change things for the better.  If you are an empty suit, albeit a well-tailored empty suit, you can promise change and transformation for America easily enough.  If you are a Marxist, the direction your change and transformation will take will prove dramatic for Americans and carry with it mass destruction on a scale most Americans cannot conceive of.  Americans voted for this change, which was hiding in plain sight behind an empty suit and fine, reassuring rhetoric to those who did not think about the meaning of what they were hearing.  In a democracy, even in America given our choice to ignore our Constitution and the sole individual-rights-protection reason for government, the sins of the majority are jackboot visited upon all without discrimination.

Replicating Britsh Health Care Cost Controls

With the Baucus "conceptual plan" for government control of the health care insurance in the U.S. passing the Finance Committee of the Senate, so it can be meshed with the other 4 draconian health plans in the Congress, we are heading in the direction of ever-increasingly expensive health care.  This will put greater burdens on the taxpayer, who will finally demand the kind of government cost controls being used in the more mature government-run health system in Great Britain.

As I have noted before, it is those whose health is deteriorating in their final few years of life who cost the most to a government-run health care system, so the only effective way to save money is to ration their care.  The British have found they can save a lot of money by putting the ill elderly in a hospice on painkilling drugs and by denying them food and water.  They die soon and stop costing money to treat.  It is very effective way for a socialized medical system to control costs.

Here is the story of a man who had stomach cancer and whose treatment stopped it.  Later, he became ill and the British doctors said his cancer had come back, though they did not do tests to prove this.  Tests cost money.  He was put in a hospice, and ignoring his family, they put him on painkiller drugs and denied him food and water.  He died in two weeks.  The post-death autopsy revealed that he died of pneumonia.  He did not have cancer.  The pneumonia was very curable.  His wife had insisted they check him for pneumonia before they put him in the hospice, but they would not do it.  It was apparently too expensive to check him for pneumonia.

Obama's cut in the average family's insurance premium

When Obama was running for the presidency and in the last presidential debate, he said

we estimate we can cut the average family's premium by about $2,500 per year.

He also promised "a net federal spending cut", but added $1.4 trillion to the federal deficit in his first 8 months in office, notes Mark Tapscott in a Washington Examiner editorial. So what is he actually producing on health care based on the Baucus Senate Finance Committee "conceptual outline"?  On this we must bear in mind that because it is only a "conceptual outline" the true costs and "benefits" are simply guesswork.  Add this to the CBO's very long history of huge underestimates.  We must also be wary of the fact that this "conceptual outline" will be melded with the other Senate bill and with the 3 House bills to produce something that will more likely than not be more expensive and more intrusive.

The Baucus conceptual plan does this or more likely more than this:

• Increases government spending by $829 billion
• Adds another 13 million people to Medicaid and children's programs
• Gives subsidies to 23 million more to buy mandated health insurance in insurance exchanges
  
• $426 billion in Medicare and Medicare Advantage benefit cuts
• $201 billion in new taxes on health insurance companies with very comprehensive health insurance plans
• $180 billion in new taxes on medical devices and drugs
• $83 billion in higher income taxes
• $25 billion in new taxes on employers
• $4 billion in fines for those who do not purchase health insurance, or will not validate it to the IRS (me)

Of course the politician's will to make the Medicare cuts will wilt after this law is passed, so much of that will not likely happen.  157 House Democrats sent Nancy Pelosi  a letter objecting to the tax on the very comprehensive health insurance plans, which many union members have, so that may not happen also.  Pelosi is now talking about the business accounting nightmare of implementing a European value added tax (VAT) instead.

But one thing is sure:  the massive government spending increases of this bill will have to be paid for or the deficit will increase greatly.  Usually, the Democrats favor letting the deficit grow, thus creating a huge sinkhole under the country in the end.  Another sure thing is that all of the taxes on business get passed on to the people in higher purchasing prices for goods and services in the end!  Though Obama promised to bring down health care costs, note also that some of the taxes are explicitly on health care goods and services and will drive those costs up very effectively.

So, in addition to the higher taxes and higher costs of many goods and services, what will be the effect on the cost of our health insurance premiums?  A study of that issue by PricewaterhouseCoopers has found this:

• The cost of coverage for the average family now is $12,300, without Baucus it will be $18,400 in 2016, but with Baucus it will cost $2900 more yet in 2016!
• The cost for an individual is now $4,600, the cost in 2016 without Baucus is $6,900, but with Baucus it will be $1,000 higher yet.

So, instead of reducing the average family's health insurance premium by $2,500 a year, Obama is going to increase it by $2,900 a year for a net difference between promise and delivery of $5,400 per year!  A few families will have this partially offset by a tax subsidy.  Everyone will face the higher prices on goods and services due to the added taxes, however.  And probably everyone will have to cope with the inflation or the lower value of the dollar due to the added deficits we will run, despite the pretense to the contrary.

Just in case you are counting, this addition to government net spending breaks another Obama campaign promise.  This huge increase in family health insurance premiums breaks still another campaign promise.  This guy either simply has no control over his promiscuous promises, or he is a very Machiavellian character who thinks we will not remember them for 8 months, or he thinks the People are incredibly stupid.

The Cloak of Invisibility Hiding the Socialist's Death Panels

The socialists want control of the American health care system and the consequent power to make us all their dependents, their children.  They will make any argument to the People which will provide them a path to take over our health care.  They have chosen the following primary arguments:

• Health care costs too much and it is costing more faster than the economy is growing.
• Some Americans do not have health insurance, but everyone ought to have it.
• People with pre-existing conditions cannot get affordable health insurance.

None of these arguments are actually good arguments when examined carefully and rationally.  But they do carry some weight with many voters.  They also influence the design of the health care policies put forth by our socialist government leadership.  I am going to primarily address the cost issue in this post.

Where do the greatest costs in our medical system occur?  It is not at the primary care level with general practitioners, internists, and family physicians.  The primary costs occur when people are really in terrible danger of dying.  They occur when someone has heart disease or cancer.  If you have heart disease, you turn to a specialist called a cardiologist.  If you have cancer, you call upon an oncologist.  These physicians are much more highly trained than primary care physicians and their malpractice insurance costs a lot more.  The equipment they use also costs a lot more.  So, surprise, surprise, their services cost more.  You, however, are willing to pay more, because your life is on the line.  Or, maybe it is your mother's or your wife's life on the line.

To the socialist who acquires life and death power over our lives, the only thing that matters is reducing costs, at least those costs on the government's books.  So, they are desperate to reduce the costs of Medicare, where most costs occur, because most people are never so likely to be desperately ill as they will be sometime after becoming 65 years old.  So, like Willie Sutton who robbed banks because that was where the money was, the socialist removes medical care for the very sick elderly to save money, because that is where the money is spent.

But, how do you do this politically without having the voters catch on?  After all, it cannot be good to be seen to pull the plug on the voter's granny or wife.  The socialist is up to the challenge.  Socialists have been dreaming about taking such power for 200 years and have done so in many countries.  They have thought about this problem.  The Wall Street Journal just did a Review & Outlook piece on this called The War on Specialists.

The Obama administration is using a regulation to shift Medicare payments from expensive specialists such as cardiologists and oncologists to primary care physicians.  The 2010 rules will reduce payments to cardiologists by 11% overall and reduce payments to oncologists by 19% overall.  They will increase payments to primary care physicians by 6 to 8%.  In general, doctors will still be paid less than market value since Medicare's price controls now pay only 0.83 times private care costs.

Echocardiogram or stress test payments will be cut by 42% and catheterization payments will be cut by 24%.  These are fundamental tools for the cardiologist.  These cuts will force many community and independent practices to shutdown, lay off staff, and make patients wait, says Jack Lewin, head of the American College of Cardiology.  These tests will be used less often as a result, so cardiologists will be making more and more guesses and uneducated guesses about heart disease problems.

The socialist administration thinks oncologists are doing too many MRIs and CT scans.  Payments for some diagnostic imaging techniques are being cut by 24%.  It used to be assumed the instruments were being used 50% of the time.  The administration is now asserting that they are used 90% of the time over a 12-hour day, or 10.8 hours.  This unrealistically high utilization rate is being used to justify reduced payments.  Similar reductions are being made in payments for the use of all expensive equipment.  Consequently, payments for anti-tumor radiation treatments are being decreased by as much as 44%. 

Max Baucus, chairman of the Senate Finance Committee, has an additional insidious way to cut costs in his "conceptual plan."  Medicare will be required to rank doctors on how much they cost the Medicare program.  Those costing the most, those in the upper 10%, will be forced to return 5% of all the payments they have received for the year.  This requirement will start in 2015.  The specialists will be the doctors in the upper 10% of costs billed to Medicare, so they will be hard hit by this requirement.  Remember, they are already being paid less than their market value, the administration's 2010 payment reductions will give them still less of market value, and then many of them will have to give 5% back.  This will function as a powerful further deterrent to specialist doctors using the full power of the tools at their disposal to diagnose and treat your disease.  The 5% of doctors being penalized each year will consist of a much larger percentage of the cardiologists and oncologists each year.  This provision is aimed directly at reducing the services of those doctors most involved in trying to save lives in deep danger.

Fewer physicians will choose to enter these specialties.  As the population of Baby Boomers greatly increases the incidence of heart disease and cancer, the specialists who treat these diseases will be reduced in number and will not be allowed or able to use the equipment that correctly diagnoses the deadly diseases and aids the cure. The expensive equipment will not be affordable given the lowered payments, so doctors will not invest in it.  No actual death panel is ever convened to consider granny's illness.  No need.  The decision has been made.  The specialists she needs and the equipment he will need if he still exists, will simply not be available.  The result:  Granny dies.  Or your wife dies.  Or your daughter dies.  Or you die.

And nobody notices.  The Cloak of Invisibility, neatly arrayed by socialist politicians and bureaucrats years before, has covered and hidden the fact that they were the death panel that pulled the highly skilled human resources and the ingenious equipment out from under granny years before.  In the process, they also halted most of the innovations that may have allowed you or your children to live longer than granny will have.  Is this really the medical care you want?

Think long and hard before you give your backing to this insidious socialist death panel lurking in the darkness.  These death dealers are bent on returning us to the Dark Ages of Medicine when magic incantations and mere guess work were offered up as medicine.  I hear that leaches are not very expensive, but we had better not tell the socialist politicians and bureaucrats about this potential cost savings.

The Real Cost of an Expansion of the Government Role in Health Care

Much is being made of the CBO cost scoring of the "conceptual plan" by Senator Max Baucus of his version of the health care insurance reform act.  CBO says that the next 10 years of Medicare spending reductions and tax increases to start immediately will pay for the first 7 years of the new program, which starts in 2013.  This is a curious way to rig the debate.  It is like saying that my next 10 years of earnings will cover my expenses in years 4 through 10.  In addition, there are further costs in the bill which are not even included in the scoring since they are not thought of as part of the new plan.

This does not even address the fact that the "conceptual plan" will no doubt have many additions to it as the Democrats find they have to bribe more and more special interests to get the 60 votes they need with a very skeptical public putting pressure on Senators to vote against this bill.  But the biggest expense issue is this:  this bill is just the Socialist foot in the door to take ever more control of everyone's health care from birth to grave.  The Democrats are not content to "merely" pick winners and losers in business in the private sector with regulations and complex, targeted tax laws.  No, they want to pick who lives and who dies as well.  That is the ultimate power.

When the Socialists have the established the power of the government to dictate what an acceptable health insurance policy is, they can put most of the health care system costs directly upon us as individuals so that the cost does not appear on the government books at all.  These costs will skyrocket, but more off than on the government books.  Thus, this debate about the cost of the Baucus bill is a very secondary issue.  The primary cost issue is what will this "reform" to increase the number of people covered by insurance and to decrease the cost of health insurance cost most Americans.  The answer is that it will cost us a fortune.  The claim that this will bring a reduction of costs at constant quality is a total fiction, a dream of Obama's father, an otherworldly wish.

Pooling the older, the unhealthy, and the drug users, the alcoholics, and the obese with the young and the healthy will of necessity greatly increase the cost of their insurance for decades of their lives.  This is pure and simple a massive transfer of wealth from these poor, innocent lambs who by and large are programmed by the government-run schools and universities to accept this sacrificial role as their public duty.  They will suffer for the fact that they cannot think this through for themselves.  They will suffer mightily.

Most states already mandate many coverages and requirements for the health insurance plans they allow within the state.  Many, many states have created Cadillac plans with the very high price tags to be expected of such plans.  This is a natural combination of politicians wanting always to seem the champion of everyone sick or afflicted and being the prey of special interests who of course would like to force everyone to buy their services.  The federal requirements for health plans are also going to go down this path.  Soon, everyone in the country will be mandated to buy Cadillac health care plans or be fined and/or sent to prison.  This is an incredible expansion of the federal government's power.

This is all so wrongheaded that it puts any rational mind into a whirlwind of anger.  There is no constitutional mandate for Congress to exercise such power.  There is no possibility that such political and governmental power can be exercised without trampling on the rights of the individual.  All schemes to give government such a measure of control over their citizen's health care have led inexorably to a rationing of health care services along egalitarian lines to produce slow, lowest common denominator health care.  The last engine of medical advancement, the United States of America, will be removed from the ranks of innovation and experimental health care as only the tried and true traditional practices are allowed by cost-conscious bureaucrats.  Delays for services will mount and doctor quality and motivation will fall.  The numbers of doctors will fall further and further behind the population growth, unless the population stops growing because that is what has happened in the other countries with socialized medicine.

If we do not own and manage our own bodies, we have no freedoms at all.  It is the ownership and the self-management of our minds and bodies which must precede any further exercise of our freedoms.  Just as the concept of freedom of the press is meaningless if we are not allowed to own and manage the use of a press, so to is the concept of individual freedom meaningless if we are not free to own and manage our own minds and bodies.  ObamaCare is the end of the world as we Americans have known it.

Senior Citizens are Especially Unhappy with ObamaCare

In their pretense of creating a government health care system that will cost less than $900 billion over the next 10 years, the Democrats plan to cut Medicare spending by $400 to $500 billion.  This is worrying senior citizens who are now on Medicare.

About 20% of them are participating in Medicare Advantage, which is a supplementary program subsidized by the government and administered by private insurers.  The senior pays a premium and it pays for additional medical benefits, including dental and vision care.  The Senate plans to cut the subsidy by $123 billion over the next 10 years, which would reduce the subsidy by about half.

The Senate bill is also planning to reduce payments to hospitals, nursing homes, hospice care, and home care by about $211 billion.  The remaining cuts are supposed to come as a result of eliminating waste, fraud, and abuse.

Rasmussen reported that 46% of senior citizens are strongly opposed to ObamaCare.  Only 33% favor it at all.  This is strong opposition compared to that of the rest of the population.  Oddly, the rest of the population will one day be seniors and will supposedly be given the same depleted services, but they simply are not paying attention to the issues as the seniors are.  The seniors vote in larger percentages than the rest of the population too, especially in off-presidential elections.

I am not endorsing Medicare.  It is an unconstitutional program which catastrophically transfers wealth from the poorer young to the richer elderly.  It is also a Ponzi scheme, which is going to collapse.  With more people about to be put on Medicaid by the current so-called health reform bills and the sorry state of the economy and its expected slow recovery, the Social Security, Medicare, and Medicaid programs will have to undergo cut-backs in services and payments.  Increased energy costs and medical expenses due to Democrat bils will permanently retard the growth of the economy.  The present seniors hoped to make it to the end of their lives before that collapse occurs, but the collapse is looming much closer now.

I, however, am actually in favor of cut-backs now, rather than later, but this only makes sense in the context of a general cut-back in government expenditures.  It makes no sense if the cut-back is simply so the government can spend the money on other unconstitutional programs that will overall enlarge the government sector at the expense of the private sector.  The expanded government role in health care due to ObamaCare will cost much more in government expenditures than the $829 billion over 10 years of the CBO estimate of the incomplete mark-up version of the Baucus Senate bill. It will also cost the American people much more in the mandated insurance premiums, which will increase at faster rates than those which caused many people to call for reform in the first place.  In other words, the cut-backs on Medicare proposed are not going to prevent the collapse of entitlements at all.  They are going to actually speed up the collapse.

Senator Bill Nelson (D, FL) wants to stop the cuts in Medicare Advantage for those already enrolled.  He will not allow new enrollments, however.  This is pure politics.  Seniors who paid relatively little for this subsidized program will sponge off young people who will never have a similar program available to them when they are seniors.  There is no principle here, just a further transfer of wealth from the young to the old.  Just another case of theft, though maybe with the advantage that one day there will be no such program.  The theft will then at least have a time limit, for that program.  Meanwhile, the fertile brains of politicians will create many another subsidy program to buy some constituency's votes.

But, at least these drawbacks have the seniors angry and their votes will take revenge on the Democrats in the 2010 elections.  The Democrats have pursued a system that sets many groups against one another while scrambling for subsidies and special privileges.  The number of dependencies is now astounding and the complete system is about to collapse.  It appears that it will collapse on top of the Democrats who mostly constructed the shoddy structure, this house of cards.

Democrats Vote Against Allowing Citizens or Senators to Read Health Insurance Bill

The Senate Finance Committee is debating a version of a health insurance bill put forth by its Chairman Senator Max Baucus (D, Montana) called America's Healthy Future Act. Senator Jim Bunning (R, Kentucky) offered an amendment which would require the bill to be printed and posted on a website for 72 hours before the Finance Committee voted on it. The Democrats voted overwhelmingly against the amendment, clearly indicating their will that this bill will follow the Democrat pattern of being passed out of committee without anyone, most especially the citizens, having read it. Then, of course, they intend it to go before the entire Senate for a vote before anyone has had time to read it. Most importantly, the People must be blindsided!

It is reassuring to all of us that the Democrats in the Senate can intuit whether a law is Constitutional and in the best interest of the General Welfare of the People without reading these complex and long bills. The Democrats are all sure they are intuitive geniuses. I am really impressed..... by their insanity.

Obama Called on Individual Mandate Tax

The Wall Street Journal (WSJ) had an interesting Review & Outlook article on Obama's interview with the usually very Democrat-friendly Democrat George Stephanopoulos during one of the five non-Fox Sunday news programs Obama was on. George Stephanopoulos asked about the individual mandate,

the government is forcing people to spend money, fining you if you don't.... How is this not a tax?

Indeed, how is a penalty as high as $3,800 a year in the Senator Max Baucus plan not a tax? But, Obama responded with a song and dance that the average family is paying $900 a year on average for the emergency care of people who elect not to have health insurance. The WSJ notes that only 2.2% of national health spending today is due to uncompensated care. In 2007, the per capita cost of all spending on health care in the U.S. was about $7600. For a four person family, 2.2% of four times this amount is $669, not $900. Of course, most family households have fewer than four people in them, so this is as high a cost per family for uncompensated care as you can produce with any semblance of justification and even that creates a false impression of expense. After all, children are only dependents for those tax years prior to the one in which they become 18 for some tax purposes. In any case, they eventually move out, usually.

Stephanopoulos persisted,

That may be, but it's still a tax increase."

Obama responded,

No. That's not true, George. The -- for us to say that you've got to take a responsibility to get health insurance is absolutely not a tax increase.

Stepanopoulos continued to persist, by offering the definition of tax from Merriam-Webster,

a charge, usually of money, imposed by authority on persons or property for public purposes.

Obama, equally persistently, continued to reject the idea that the penalty paid to the government for not buying health insurance is a tax. Actually, it is and it clearly is a shattering of Obama's pledge not to increase taxes on anyone making less than $250,000 per year!

Furthermore, it is not a reimbursement of the cost to each of us for uncompensated care that we may in some sense pay for yearly. 2.2% of $7600 is $167.20, which is much less than the $3800 one will be taxed for not buying health insurance. Indeed, many of those this tax is to be levied on are the young and healthy, while much of the uncompensated costs are for illegal aliens and older people who lost their employer-provided insurance when they lost a job.
The way to address the loss of insurance due to losing jobs or changing employers or starting a small business is

• to allow individuals the same tax deductions they get if employers provide insurance
• to make insurance more affordable with health savings accounts coupled to high-deductible insurance plans
• to pull down state barriers to interstate commerce in health insurance
• to prevent outrageously high court awards for medical malpractice
  

Note that the Democrat/Obama plans do not want to address any of these real issues. Indeed, they want to outlaw high deductible plans and end health savings accounts. And, of course, they are so in bed with the trial lawyers, among their biggest campaign fund contributors, that they are resisting all tort reform.

Meanwhile, the Congressional Budget Office is expecting the individual mandate penalty tax to produce new revenues of $20 billion over 10 years because ObamaCare's new regulations will make health care insurance so expensive that many young people and some who cannot afford it will pay the penalty tax to avoid paying the higher cost of medical insurance.

I marvel at Obama's persistence in lying. He is a much more frequent and polished liar than Bill Clinton ever was. The further a politician is to the left, the more need he has to feel comfortable as a liar. He has to adopt so many foolish policies, while pretending they have a rational basis!

Taxing Employer-Provided Health Insurance

Having just examined the $787 billion stimulus bill and its expenditures and noting that that bill clearly signals a government takeover of the health care industry, it is appropriate to wonder where the money will come from to pay for all of this. This is not all, of course, since there are the on-going bailouts, a huge omnibus "regular" government spending bill full of pig ears, and future stimulus bills to consider as well. Is it possible to pay for all this by taxing the rich more heavily? Certainly not. Everyone but a few of the most envy- and hate-ridden socialist ideologists recognize this fact.

So, Max Baucus (D.-MT), chairman of the Senate tax-writing Finance Committee, has proposed that the health care insurance benefits that employees get from their companies should be taxed. President Bush and Sen. John McCain had earlier suggested this. Thirteen other Senators have signed on to this idea. Obama has earlier rejected this idea, but he now is said to be willing to go along if someone else does the proposing. Apparently, if the House and Senate were to pass a bill to tax employee health benefits, he would sign the measure.

The health insurance benefit has never been taxed since it was first offered during WWII on a large scale. This reduces taxable earnings by about $9,000 per year for family coverage. Clearly, taxing this income will move many people into higher tax brackets and will increase government tax revenues. It will also encourage companies to drop this benefit. Indeed, this benefit will make no sense at all if individuals will have access to group insurance plans such as Obama has proposed and will not have the tax benefit.

Actually, it is only fair that this benefit should be taxed like all other income. But, if it is to be taxed, it should happen as a part of a general tax decrease from which everyone will save some money from falling into the rapacious hands of the government. Given the government's hugely wasteful spending plans and given the great damage it has done to the economy resulting in lowered tax revenues, there is no way that such a general tax reduction can be accomplished, at least not without acknowledging that lowering tax rates may soon generate more tax revenues. This happens both because the economy responds with increased growth, but also because at reasonable tax rates, people will make many more taxable transactions. The tax revenue is a function of both the tax rate and the frequency of taxable transactions. It is also a function of the frequency of reported taxable transactions.

The socialists in charge will not provide a broad-based tax cut when they start taxing employer-provided health insurance benefits.