Friday, February 19, 2010

Health Care Costs 'Taxing' Obama, Dems

President Obama's new health care reform plan shows that the history of American health care is as big an obstacle to Obama and the Democrats as is the Republican opposition.
"Officials said the president’s bill was expected to include a version of the Senate’s proposed tax on high-cost, employer-sponsored insurance policies," the New York Times reported.
Ouch. So much for employers getting behind the bill. For it was tax breaks, not tax hikes, that spurred employer-based coverage in the past century.
"In 1943, the Internal Revenue Service ruled that employer-based health care should be tax free," NPR reported. "A second law, in 1954, made the tax advantages even more attractive."
The problem for Obama seems to be where to find the $900 billion that would insure about 30 million Americans by 2019. Taxing employer-sponsored policies is a shortsighted solution, as it would remove one of the incentives for employers to offer health care.
Then again, it's not like there are many more appealing ways. Look at what my home state, Massachusetts, did to fund near-universal care.
"Democrats have already hiked the fines for people who don't obtain insurance under the 'individual mandate,' already increased business penalties, taxed insurers and hospitals, raised premiums, and pumped up the state tobacco levy," the Wall Street Journal noted. "That's still not enough money."
Still, if Obama wants to pass health-care reform, he has to find funding alternatives to taxing businesses. If those who do not learn from history are doomed to repeat its mistakes, those who go against health-care history are doomed to make even worse mistakes.

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