Taxing Healthcare Benefits Will Harm My Patients

Posted on 07 January 2010

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By Deborah Burger, RN
National Nurses United

The nation’s largest union and professional organization of registered nurse—National Nurses United (NNU)--is today calling on House members to hold the line in opposing a tax on workers’ healthcare benefits], and called for other changes in the final healthcare legislation to expand affordability and crack down on insurance industry abuses. 
It is unconscionable that workers and families with employer-sponsored health plans, who receive virtually no benefits from the proposed legislation, would have their health coverage taxed and seriously eroded. 
As co-president of the 150,000 member NNU (formed last month through a unification of the California Nurses Association/NNOC, United American Nurses, and the Massachusetts Nurses Association) I know that nurses across the country believe this tax to be a disgraceful betrayal of working families and their yearning for genuine reform.
The excise tax on workers’ benefits is a central plank of the Senate version of the bill, and is supported by the White House, in contrast to the House bill which instead sets new taxes on the highest-income earners. Congressional Budget estimates say the tax would affect 19 percent of employer-paid plans, or 30 million Americans by 2016, a number that Citizens for Tax Justice says will soar to 58 million people by 2019.
Advocates of the tax have made clear their intent: to force working people into cheaper, high deductible plans that provide less coverage and shift more costs to employees. The inevitable effect will be more people skipping needed medical care, enduring much higher out-of-pocket costs and risking financial ruin due to medical bills. 
Do we really want to reform healthcare by discouraging workers from accessing it? 

It’s clear that what we’ll see.  A Towers-Perrin employer survey last September found 86 percent of employers would pass along their higher costs to employees, a bitter pill for those working families who were assured that health reform would not undermine their present coverage.  They will be saddled with higher costs and less coverage, while insurance companies will still have free rein to raise premiums, co-pays, deductibles, co-insurance and other fees, and continue to routinely deny needed medical care.”
Enactment of the tax, whose central premise is to control healthcare costs by reducing utilization of needed medical care while failing to control the pricing practices of the healthcare industry, would symbolize a central failing of the proposed legislation, ceding far too much to the insurers and the rest of the healthcare industry.
 In addition to calling on Congressional leaders to drop the excise tax, NNU is calling on Congress to make other changes in the final bill, including:

  1. A state waiver to ERISA, the federal employee retirement system, to allow states to pass Medicare for all/single-payer reforms without a court challenge from healthcare corporations.
  2. Medicaid expansion to 150 percent of the poverty level (the House version) rather than the more limited Senate Medicaid expansion. Half of the increased coverage under the bill comes through Medicaid expansion; with the failure of Congress to stop the price gouging of the insurers and drug companies, the broadest possible increase in Medicaid eligibility is essential for American families.
  3. Closure of the loopholes on the insurance regulations in the bills that ostensibly ban rescissions (insurers dropping people when they get sick) and refusal to sell policies to people with pre-existing conditions.

Among the ways to close those loopholes are:

  • Eliminate the state-based exchanges in favor of a strongly regulated federal exchange, to prohibit insurers from avoiding strong consumer-won protections in some states by issuing the policies in unregulated states.
  • Prohibit rescissions under any circumstances. The current bill allows patients to be dropped for “fraud or intentional misrepresentation,” the same pretext insurers commonly use now.
  • Prevent insurers from being able to charge up to four times more based on age, or more for certain conditions. No age-based premiums should be allowed, and the bill should include a direct prohibition on marketing gimmicks that enable insurers to avoid sicker enrollees.
  • Bar the higher charges allowed for employees who fail “wellness” programs because they have diabetes, high blood pressure, high cholesterol readings or other chronic conditions.

The repeated concessions Congress and the White House have made to opponents and obstructionists have gravely weakened the promise of reform. 

Nurses will continue to campaign for more cost effective, comprehensive reform by expanding Medicare to cover everyone, and passing single payer bills in individual states.

In the meantime, Congress has one final opportunity to fix some of the worst problems in this legislation. We will be closely monitoring the votes of our legislators on the final bill.
Deborah Burger, RN is co-president of the California Nurses Association, and National Nurses United, the nation's largest union of registered nurses.

What is unconscionable is the existing for-profit healthcare industry built around the idea that healthcare is a privilege of the wealthy and the healthy, not part of every American's inalienable right to life.

What is unconscionable is the elimination of the pre-existing condition denial without also preventing companies from raising the premiums of those patients. What good is an insurance plan you are now allowed to have, only to be forced out months later as the premium doubles every month until you can no longer afford it?

What is unconscionable is the shameless political corruption of Republicans and Joe Lieberman in Congress, who were willing to act as the mouthpieces for an industry clearly fighting for what was best for insurance companies, not the economy, the nation or Americans. Simultaneously claiming a public option would be more expensive than any private one because the government red tape would make it inefficient, while buying votes to prevent it from inclusion in the bill because the insurance industry knew a public option would drive competition within the bloated industry.

What is unconscionable is the idea that a for-profit insurance industry, with its huge costs to the nation's healthcare, is needed at all. Should healthcare become a right, what exactly would we be insuring against?

What is unconscionable is the number of Americans with healthcare who didn't care that so many of their fellow citizens were unable to access even basic, life saving and life extending medical treatment, simply because it didn't affect them personally.

What is unconscionable is the idea that the wealthiest Americans, who benefited from 8 years of Bush's targeted tax cuts, would not be asked to pay more to insure that all Americans can see a doctor.

What is unconscionable are all those who think the wealthiest Americans are wealthy because of hard work and intelligence. Nepotism and birth have far more to do with who in America has money and who does not. No one can say the CEO of a hotel corporation works harder than any of the hotel's maids.

What is unconscionable is the growing disparity between the wealthiest 1 percent of Americans who retain an ever larger grip on the preponderance of the nation's wealth, and the rest of us.

What is unconscionable are all those who think the wealthiest Americans are wealthy because of hard work and intelligence. Nepotism and birth have far more to do with who in America has money and who does not. No one can say the CEO of a hotel corporation works harder than any of the hotel's maids.

The majority of wealthy people in the US got that way in one generation of hard work. Yes, there are some who are born with a silver spoon in their mouth and a huge trust fund (like Al Gore), but the majority of fortunes have been made in one generation - and a surprising proportion of them are lost by the spoiled kids and grandkids of the person who made them. That's a fact.

As for whether or not the CEO of a hotel corporation works harder than a hotel's maids, what does THAT have to do with anything? I have little doubt that a guy who digs ditches with his bare hands works harder than any of them. And a body builder in the gym 'works' (if you use the scientific definition of force times distance) far harder than all three of them. That does not mean that their work has equal value - either to the corporation or to society as a whole. Work is worth what someone will pay you for it in the free market. A computer programmer may do trifling 'work' in terms of physical activity - but that doesn't mean they haven't added value to our lives.

What is unconscionable is the growing disparity between the wealthiest 1 percent of Americans who retain an ever larger grip on the preponderance of the nation's wealth, and the rest of us.

Perhaps no statement is more misleading than this one. Wealth is a variable that is functionally bounded on only one side. The poorest will ALWAYS have nothing - either from misfortune or character defect. They will never go much below zero wealth because no one will lend them the money to do so. And even if they did, they can go through bankruptcy to erase any negative net worth. There is effectively no bounds on the upper limit of wealth - witness Bill Gates.

But the other problem with this analogy is that IT ISN'T A ZERO-SUM GAME. Bill Gates is not uber-rich because he picked the pockets of some homeless people. Bill Gates is uber-rich because he came up with products that had not previously even existed that people were willing to pay a lot of money for because they benefited those people in some way.

EVERY SINGLE INCREASE IN THE MEDIAN INCOME INCREASES THE DISPARITY BETWEEN THE RICH AND THE POOR, but that doesn't mean that the median person has done anything wrong. They haven't 'stolen the poor's fair share,' they have rather worked and contributed to the growth of wealth in the entire society while - too often - the poor have just gotten drunk or done drugs, or suffered from their own misfortunes unrelated to the prosperity of the median. A significant percentage of the homeless have mental health issues. The rich did not give them those issues. A significant portion of the poor have drug and alcohol issues. The rich did not give them those issues.

In survey's done of people who have won million dollar lotteries, a significant percentage of them will - within two years - have a NEGATIVE net worth. The rich did not take their money away from them (hell they were rich themselves), they simply pi$$ed it away because they had never learned how to handle money.

You aren't going to help the poor by punishing the rich and you sure as hell aren't going to help California by driving more rich people out of the state.