TomP has a diary up saying that Sens. Landrieu, Lincoln, and Nelson have vowed to filibuster the Senate bill if it is not financed entirely through the health care system. Their demands could be a lot worse.
I actually think requiring the bill to be financed entirely through the health care system is not an unreasonable demand. Financing the bill entirely through the health care system is the only way to make the bill deficit neutral over the very long-run as health care experts have warned us that only health care costs rise as fast as health care costs. You're losing a lot of revenue over the long-term when you don't finance entirely through the health care system, and you'll eventually have to raise and keep raising taxes on the middle-class in some form to finance universal health insurance.
And of course, the tax subsidy for employer-provided health insurance is inequitable. I have a 45% marginal tax rate (15.3% employer and employee payroll, 25% federal income, and 4.7% state income) and a 10-year-old diabetic child. Because I am lucky enough to get health insurance through my employer, Uncle Sam -- through the employer exclusion -- subsidizes 45% of the cost of my health insurance.
The waitress at the local diner who served you and me breakfast last Sunday morning also has a 10-year-old diabetic child. But because her employer doesn't provide her with health insurance, she gets zero help from Uncle Sam when she purchases health insurance on ehealthinsurance.com.
In other words, the waitress with the diabetic child is subsidizing my health insurance. Is this fair?
Folks, in order to get this bill into law, some of the Senate bill's provisions are going to have to stand. I can think of far worse demands from Nelson, Landrieu, Lincoln, et. al. than retaining the excise tax on Cadillac plans. Saying they aren't willing to limit the premium variation by age even more than the Senate bill (3:1) would be one such demand. Saying that they aren't willing to increase the minimum level of coverage an insurance policy must have (60 percent actuarial value) is another such demand. Saying that the bill must contain the Stupak abortion language would be another.
Again, some of the Senate's provisions are going to have to stand. If the excise tax is all we have to live with, and we can get everything else of the House bill -- the rating rules (2:1 age, no smoker rating), the individual mandate (no 8% income exemption -- just a hardship exemption and 2.5% of income tax penalty effective immediately), the minimum benefits package (70 percent actuarial value), the subsidy levels (much, much better at 100-300 percent FPL than the Senate bill), the federal Exchange with competitive bidding to sell on the Exchange, the requirement that plans on each Exchange tier look virtually identical, the employer mandate, and abortion language weaker than Stupak -- all that even with a lack of a public option and the excise tax, I'd say that's a really, really good trade.
