Health Care Burdens
[Guest post by DRJ]
Via TaxProf Blog, Douglas Holtz-Eakin writes in the Wall Street Journal that the Baucus bill will impose a 23% marginal tax rate on the middle class. This follows N. Gregory Mankiw’s analysis that marginal tax rates could go as high as 80%.
Less than one million Americans file bankruptcy each year, which is far less than 1% of Americans. Some undoubtedly file because of medical bills. Under every version of ObamaCare I’ve seen, an expanded class of Americans will face financial difficulty because of increased taxes that will almost certainly be non-dischargeable in bankruptcy. They may (or may not) have health care but more Americans will have fewer options when it comes to dealing with their debts — and a liquidation bankruptcy probably won’t be one of those options.
So we may discard a health care system that provides care to all Americans and results in far less than 1% filing bankruptcy because of health care debts. We’re doing this to adopt a health care system that provides not-necessarily-better care to all Americans with more financial hardship that can’t be discharged in bankruptcy.
Does this make sense?
— DRJ
Makes sense to Socialists.
krusher (6f6e76) — 10/15/2009 @ 1:56 amI watched my Dad (proud Goldwater fan) practically develop ulcers during the Clinton years. His disdain was severe enough that we discouraged him from driving through Hope, Arkansas to visit – better to take I-20 all the way through to Shreveport.
voiceofreason2 (cfab95) — 10/15/2009 @ 3:18 amThat was small potatoes compared to how he is taking all the Obama hijinks. Now in his seventies the health care issue has him very worried.
No, this approach to help 1% doesn’t make any sense.
AARP/ACORN is selling our little country out very very badly. At this point our douchebag little president man shouldn’t be seen to be getting any credit for implementing this dirty socialist health care farce I don’t think.
When the little president man decided America’s feeble-minded codgers were but wrinkled whores he could buy for $250, he gave away who was pulling his little president man puppet strings, and for now it’s clear AARP/ACORN owns this pitiful Chicago street trash loser what’s prancing prancing prancing around with a tawdry Nobel Peace prize dangling from his scrawny low-class dirty socialist neck.
happyfeet (f62c43) — 10/15/2009 @ 5:00 amWhat I don’t get is, if you don’t get the insurance and you own a home…and the IRS is levying the fines…can they confiscate your property even in the absence of any overdue medical bills?
That would kind of an ugly twist, yes?
cassandra in MT (b017d6) — 10/15/2009 @ 5:42 amditto, Krusher.
If Health Care Reform was really what they were after, they would be talking about Tort Reform first. Then they would talk about how to deal with the burden illegal aliens have placed on our health system. Then they would wait to watch it recover. That would be real “Reform”. The Obama plan is just another tax and spend policy that will have dozens of negative unintended consequences.
tyree (bf0ee2) — 10/15/2009 @ 6:21 amIf your goal is to drive Americans into debt peonage where they will be dependent upon government largess to be doled out by Democrats in Congress, it makes perfect sense.
Mark L (0ccd61) — 10/15/2009 @ 6:25 amI wouldn’t give up on Olympia Snowe yet. She may have voted for the Baucus bill because of Maine’s hope for a bail out. On the other hand, she may realize that the reason why Maine needs a bailout is because they implemented the Obama/Baucus plan early.
It used to be said that experience was the best teacher. Is that still said ?
Anyway, we will see how this plays out as the bill is written. What she voted on was not the actual bill.
Mike K (187f3b) — 10/15/2009 @ 6:48 amAll they see is that the promise of affordable coverage for all swept them into office, and that implementing it will get them re-elected.They’ve worked out the timing so that the sting to middle-class taxpayers won’t hit until after the next mid-term elections.
Icy Texan (6fdd44) — 10/15/2009 @ 7:34 amOnly 23% – they must be slipping…
EricPWJohnson (b2203a) — 10/15/2009 @ 7:38 amThe healthcare reform that the Leftists are pushing have very little to do with reforming healthcare. It is about power and control.
JD (683268) — 10/15/2009 @ 7:44 amOh Wait!!!
This isn’t a tax! This is just compelling everyone to do their share to provide top quality health care to illegal aliens and citizens who can afford coverage.
At least Obama Econ Adviser Robert Reich spoke the truth about Obamacare.
Now seniors in particular have to reconcile the impact of their health care future with the outrageous cost imposed on the non-retired work force. We’ll see if they are paying attention.
MAS1916 (9c3ecb) — 10/15/2009 @ 7:47 amAs I’ve mentioned before, the whole health care “debate” is a perfect example of the law of unintended consequences, a concept championed by columnist and economist Walter Williams.
According to this law, the government perceives a “problem” and then sets out to “fix” said
“problem” by establishing a set of rules and regulations. In the process, however, the government creates an entirely new set of problems – many of which are worse than the original “problem.”
I fear that this is what is happening with health care. In order to “help” a relatively small number of people, our “leaders” have decided to screw a much larger number of people.
Oh well, I guess it’s the thought that counts.
Bubba Maximus (456175) — 10/15/2009 @ 7:56 amDRJ, there are countless reasons to oppose this idea, but tax-induced bankruptcy isn’t one of them. The amount of non-dischargable tax is in the 4-figure range which isn’t an intolerable or life-altering burden. A few thousand dollars isn’t really all that much money anymore.
The risk that people take without health insurance, however, can easily lead to debt of six figures, which is life-altering and intolerable and could easily cause bankruptcy. I’ve said before and will say again that voluntarily going without health insurance — at any age — is certifiably insane.
What the bill needs to do is make it possible for anyone to get medical insurance, in the sense of a limitation on medical expenses. Sadly, the bill goes the other way and outlaws actual medical insurance (now called “catastrophic” coverage) and replacing it with mandatory pre-paid medical service policies that are the heart of the underlying problem.
Kevin Murphy (3c3db0) — 10/15/2009 @ 8:28 amThe truth is, people will always suffer due to medical bills. Under Obamacare, people will still suffer, but it will be a different group of people. The middle and upper class will suffer, and the “poor” will get free care. That’s socialism!
I also wonder how it can be legal that the federal government imposes mandates on private insurance companies, like in the TARP bill, the rider that forces carriers to provide coverage for mental health issues. This is what forces premiums up.
Patricia (c95a48) — 10/15/2009 @ 8:37 amWe watch as our nation slowly descends into the Weimar Republic, Part Deaux.
Dmac (5ddc52) — 10/15/2009 @ 9:27 am“Does this make sense?”
===============================
Well, of course, not RATIONAL sense.
But it sure does make all the Morally Superior People On The Hill who are willing to do the Hard Work Of Spending Other People’s Money in order to More Fairly Distribute The Wealth Of This Great Nation feel really, REALLY self-congratulatory. They’re just WALLOWING in the certain knowledge of their Compassion and Self-Importance. (*)
Pfffeh!
(*) Yes, I know the overabundance of caps is annoying. So are The Elected Who Feel They Have The Moral Vision To Fix Us All.
A_Nonny_Mouse (57cacf) — 10/15/2009 @ 9:29 amGoing without health insurance is a rational thing to do, provided you have enough income and assets to self insure. Since insurance is most efficient when it protects against disaster as opposed to inconvenience, catastrophic health coverage works for those who can afford to pay for ordinary health expenses. It is really a matter of choice.
Bar Sinister (d2caac) — 10/15/2009 @ 9:38 amWell, the basic idiot idea is this. young people don’t want to buy insurance. so, the democrats say, we will force them to buy insurance to help pay for the elderly. Now they can’t directly force people to buy it–there is that troublesome precedent in Roe v. Wade preventing that. so instead they tax them for not doing so.
Now, first, question. is it okay to try to achieve by taxes what you can’t by direct action?
Second, okay so the idea is this. they tax you for not buying health insurance, in order to try to incentivize buying insurance. but then the tax turns out to be much less than the cost of insurance. meanwhile, they tell insurance companies that they have to take on pretty much anyone regardless of pre-existing condition.
So basically democrats don’t understand in any basic way what it means to create an incentive. greaaaat.
Seriously, at what point do you stop accepting stupidity as an adqueate explanation?
A.W. (b1db52) — 10/15/2009 @ 9:38 amAre not most young people part of the middle class? And didn’t Teh Won promise not to raise middle class taxes AT ALL?
Icy Texan (6fdd44) — 10/15/2009 @ 9:47 amIt was never about making sense, and it’s always been about control of the serfs.
AD - RtR/OS! (caade8) — 10/15/2009 @ 10:12 amPoor Harry Reid, beset on all sides by liberal Democrats,moderate Republicans, Blue Dogs, and hated conservatives. The man can hardly sleep and is having real problems keeping his story straight these days.
Everything will be better for him on January 3, 2011, when his Republican replacement is sworn in.
Scott (94805a) — 10/15/2009 @ 10:46 amIt just struck me that Obama’s model for selling health insurance/care reform is the same model used on TV for hawking the Veg-o-magic:
Identify/manufacture a problem: “Hi friends, Billy Amazing here for the Veg-o-magic. Are you tired of wasting endless hours you could be spending with your family stuck in the kitchen cutting up piles of carrots and potatoes with that dangerous, old-fashioned, hard to use knife? Ouch!
(President Obama here to warn all Americans of impending national disaster: we have a crisis on our hands, Medicare is going to go broke unless we do something now, and I mean right now. We only have 12 days to fix this problem. That’s right, the world depends on us, so lets all agree to pass essential legislation before Congress leaves for summer recess. Oh yes, I would have already taken care of the problem, but George Bush wouldn’t let me, and the kids wanted to visit Disneyland.)
Present a solution: Buy our shinny new plastic and stainless steel kitchen wonder! It safely and conveniently slices and dices, it makes waffle cuts, it even practically cleans itself in complete safely, no more painful cuts, and without muss or fuss. Your family will love the healthy meals you make in seconds. Did I mention all the money you’ll save?
(Obama’s new and improved razzle dazzle, pie in the sky, health care plan will cover all Americans (and a few million illegals) without costing a dime. That’s right! 47 million newly insured Democrat voters without spending one extra dime. Some smoke and mirrors, a little muddy accounting, a few new new taxes on those mean old rich guys, and presto – ObamaCare for one and all. Well, er, no I haven’t got a copy for you to read. Why are you asking silly questions? Don’t you know little Susie from East Overshoe has been denied coverage from the bad, very bad GOP owned and operated health insurance company? Have you no compassion, you want little Susie’s blood on your hands? We have to pass my takeover plan now, now, do you hear me? Now, now, now, or Bill Ayres will tell everyone who wrote my book, and not only that, Reverend Wright will snitch me off for what I was really doing in his church for 20 years.)
Throw in some extras: But wait, there’s more. Much more….
Close the deal: We don’t take no for an answer, if you get my drift. You’re going to pay up whether you like it or not. So just shut up and get in line. Opposition is RACISM, you dirty rat, and asking inconvenient questions is a crime now too. It’s in the small print. No you can’t read the bill. It hasn’t been written yet, but it’s there alright. Bet you didn’t know an elected representative could do stuff like that. Well, welcome to the age of Obama, now give me your wallet.
ropelight (a5ea44) — 10/15/2009 @ 11:26 amI wish someone in Congress would explain how this will work on a national level when it failed in Tennessee, and is failing in Maine and Mass. Do the feds have some kind of magic wand that we don’t know about? (Other than their threats of higher taxes, jail and the IRS)?
Rochf (ae9c58) — 10/15/2009 @ 11:27 amHey, if we get thrown in jail, we get Health-Care!
AD - RtR/OS! (caade8) — 10/15/2009 @ 11:32 amRoch
Explaining is for the peasants, not congress.
Ropelight
Well, i am pretty sure billy mays never called someone racist for not buying his sh-t. so there is that difference.
i am personally struck by how much the dems are doing what they used to accuse bush of doing: making up a crisis to push through his agenda.
A.W. (b1db52) — 10/15/2009 @ 11:57 amIn 2007 822,590 individual (non-business) bankruptcies were filed. It should be remembered that it is not just the individual filing for whom this is a disaster, if they’re married, the spouse and children are financially devastated too.
Specifically, “[a] recent study found that 62 percent of all bankruptcies filed in 2007 were linked to medical expenses. Of those who filed for bankruptcy, nearly 80 percent had health insurance.” (From From National Coalition on Healthcare site)
Study is: Himmelstein, D, E., et al, “Medical Bankruptcy in the United States, 2007: Results of a National Study, American Journal of Medicine, May 2009.
Peccator Dubius (a5ed70) — 10/15/2009 @ 2:23 pmPeccator – That 62% “linked to medical bills has been debunked more times than it has been trotted out.
JD (c87796) — 10/15/2009 @ 2:32 pmThe medical bankruptcy study might just as well be a climate model.
happyfeet (71f55e) — 10/15/2009 @ 2:34 pmJD – OK, I deal in facts, and am happy to be corrected. Can you give me a reference or link to another study that gives a contrary conclusion.
Peccator Dubius (a5ed70) — 10/15/2009 @ 2:51 pmPeccator, that study is complete B.S. It counted any bankruptcy that had any medical debt at all as a bankruptcy “caused” by medical costs. We’ve debunked that faux “study” repeatedly. Pay attention.
I practice in consumer bankruptcy and have only seen a handful of bankruptcy clients whose bankruptcies were the direct result of medical expenses rather than job loss or buying stuff they couldn’t afford.
I’ve filed scores of petitions where there were 40,000 to 100,000 dollars in liabilities of which a few thousand were medical bills. That bogus study would have listed them as bankruptcies caused by medical expenses. Utter horse manure.
SPQR (26be8b) — 10/15/2009 @ 2:52 pmPeccator – What SPQR said. In that study, if your house is being foreclosed, your car repossessed, and you had large consumer debt, coupled with any medical bills, that counted towards the 62%. Being concerned with facts is a good thing.
JD (5b6053) — 10/15/2009 @ 2:59 pmOK, point taken.
Peccator Dubius (a5ed70) — 10/15/2009 @ 2:59 pmMcArdle probably did some of the most quoted work in debunking that study.
This guy points out that the study hides the fact that even with their skewed definitions, the amount of bankruptcies attributable to medical expenses has been dropping rather than rising in recent years. He also shows that the claim that lack of insurance causes bankruptcy is belied by their statistics too.
SPQR (26be8b) — 10/15/2009 @ 3:03 pmSorry if I came off strident, Peccator. That “study” just kind of annoys me.
JD (5b6053) — 10/15/2009 @ 3:06 pm