"A Less Than Honest Policy"

That's the title of Bob Herbert's excellent column today, in which he details how the Senate's version of the health care insurance reform bill has ticking at its center "a middle-class tax time-bomb." He's referring to the 40% excise tax "on so-called Cadillac health plans, which are popularly viewed as over-the-top plans held only by the very wealthy," a tax that will, due to the rising cost of healthcare, be levied on more and more working Americans with basic employer plans.

In fact, it's a tax that in a few years will hammer millions of middle-class policyholders, forcing them to scale back their access to medical care.

Which is exactly what the tax is designed to do.

The tax would kick in on plans exceeding $23,000 annually for family coverage and $8,500 for individuals, starting in 2013. In the first year it would affect relatively few people in the middle class. But because of the steadily rising costs of health care in the U.S., more and more plans would reach the taxation threshold each year.

Within three years of its implementation, according to the Congressional Budget Office, the tax would apply to nearly 20 percent of all workers with employer-provided health coverage in the country, affecting some 31 million people. Within six years, according to Congress's Joint Committee on Taxation, the tax would reach a fifth of all households earning between $50,000 and $75,000 annually. Those families can hardly be considered very wealthy.

e Congressional Budget Office, the tax would apply to nearly 20 percent of all workers with employer-provided health coverage in the country, affecting some 31 million people. Within six years, according to Congress’s Joint Committee on Taxation, the tax would reach a fifth of all households earning between $50,000 and $75,000 annually. Those families can hardly be considered very wealthy.

Proponents say the tax will raise nearly $150 billion over 10 years, but there's a catch. It's not expected to raise this money directly. The dirty little secret behind this onerous tax is that no one expects very many people to pay it. The idea is that rather than fork over 40 percent in taxes on the amount by which policies exceed the threshold, employers (and individuals who purchase health insurance on their own) will have little choice but to ratchet down the quality of their health plans.

These lower-value plans would have higher out-of-pocket costs, thus increasing the very things that are so maddening to so many policyholders right now: higher and higher co-payments, soaring deductibles and so forth. Some of the benefits of higher-end policies can be expected in many cases to go by the boards: dental and vision care, for example, and expensive mental health coverage.

Proponents say this is a terrific way to hold down health care costs. If policyholders have to pay more out of their own pockets, they will be more careful — that is to say, more reluctant — to access health services. On the other hand, people with very serious illnesses will be saddled with much higher out-of-pocket costs. And a reluctance to seek treatment for something that might seem relatively minor at first could well have terrible (and terribly expensive) consequences in the long run.

So, to sum up: The tax is being introduced as a tax on high-end, or "Cadillac," plans, as defined by how many dollars of healthcare are covered by the plan. But, as the cost of healthcare rises, basic plans that cover a percentage of care will necessarily qualify as "Cadillac" plans. More people will be forced to pay a 40% excise tax, or lower the quality of their healthcare plans. Most people (and/or their employers) will opt for the latter, and the first thing to go will be preventable care, which is the exact thing that's gotten us into this situation in the first place, because our insurance companies currently pay out enormous amounts to pay for treatments of advanced disease for which people with bad or no healthcare didn't get treated earlier (and thus more cheaply).

The Senate bill thus stands to exacerbate spiraling healthcare costs.

The tax on health benefits is being sold to the public dishonestly as something that will affect only the rich, and it makes a mockery of President Obama's repeated pledge that if you like the health coverage you have now, you can keep it.

Gee, it's almost like there's legitimate reason to oppose this bill besides being a dirty fucking pajama-clad hippie who blogs from mom's basement and only cares about ideological purity at the expense of compassion or common sense.