Obama's healthcare plan: Tax and fix: The Swamp
The Swamp
Chicago Tribune
Posted February 26, 2009 7:15 AM
The Swamp

by Noam Levey
.
Making good on populist rhetoric he has employed since he was a candidate, President Obama plans to begin paying for a healthcare overhaul with $634 billion in new taxes on wealthy Americans and cuts in government healthcare spending, administration officials said Wednesday.

The money would help defray the staggering costs of insuring more than 47 million people in America currently without health coverage, a centerpiece of Obama's agenda.

Obama's plan does not lay out a proposal for how to expand access to insurance coverage. The White House is collaborating with senior Democrats on Capitol Hill on how that might be accomplished. Some are advocating potentially controversial concepts such mandating that every American obtain health coverage, or creating a new public insurance program to compete with private insurers.

An administration offical, who was not authorized to speak on the record, said the proposal to raise revenue was intended to signal the president's seriousness about moving forward. Another official called it a "substantial down payment on reforming the health care system.''

By relying heavily on wealither taxpayers--couples making more than $250,000 a year--the president is adding another controversial element to Obama's healthcare overhaul, whose price tag could reach into the trillions of dollars. An outline of the plan will become public today when Obama releases a summary of his first federal budget.

The funding proposal comes on the heels of Obama's promise Tuesday night, during his address to Congress, to forge ahead with sweeping changes to the healthcare system despite the current economic crisis.

See the rest of the story on Obama's health care plans and taxes in Tribune newspapers and here in the Swamp:

Obama has already signed legislation dedicating more than $170 billion in new federal healthcare spending for children's health coverage, public insurance programs for the poor, health information technology and more disease research.

But reaching Obama's goals will likely cost even more.
The president and his allies on Capitol Hill have talked of spending money on new initiatives that would make the healthcare system more efficient in the long run. For example,they have talked of creating incentives to reduce duplicative and unnecessary care that many experts say is driving up healthcare costs.

But many analysts say the federal government will have to continue to increase spending for years to come before it begins to reap any savings from a redesigned system.

"It's a big ship that's not moving that fast, but it is very big and it's very hard to turn," Congressional Budget Office director Doug Elmendorf told the Senate Finance Committee Wednesday.

Under the plan, roughly half of the money would be generated through changes in the way that the wealthiest Americans itemize deductions for charitable donations, state taxes or interest payments on a home.

Under the president's proposal, joint filers making more than $250,000 a year would only recoup 28% of the value of qualified deductions, rather than higher percentages under current law.

That could mean a couple in the 35% tax bracket who once could have recouped $3,500 from making a $10,000 donation to a charity would now be able to recoup only $2,800.

The White House estimates that would generate about $318 billion.
The remaining money in the president's plan would be generated largely from changes in the way the federal government pays for healthcare through Medicare and Medicaid, its two primary public insurance programs.

By creating a new competitive bidding process, Obama plans to cut payments to insurance companies that currently contract with the federal government to provide care to senior citizens on Medicare.

Studies have found that this program - known as Medicare Advantage - ends up costing the government substantially more than the traditional fee-for-service program, making it a favorite target for congressional Democrats who have lambasted the program as a give-away to industry.

That could generate more than $170 billion over the next decade, according to the administration.
The president also wants to speed federal approval of generic drugs derived from biological rather than chemical processes--known as biologics--a move that could save money for public and private insurance.

And he is proposing new systems to encourage better--and more cost-effective--care, in part by reducing government reimbursements to hospitals with high readmission rates.

Obama's cost-cutting plans risk substantial opposition from industries that count on the federal government to pay their bills.

On Wednesday, the proposal was greeted warily by health insurers, who claimed that changes in Medicare would hurt seniors. "This proposal asks seniors to pay a disproportionate share of the cost of health care reform," said Robert Zirkelbach, a spokesman for America's Health Insurance Plans, the industry's Washington-based lobbying arm.

Chip Kahn, who heads the Federation of American Hospitals, said he would review the potential impact of the president's plans. "The devil really is in the details," said Kahn, expressing hopes that hospitals would be able to work with lawmakers on the incentive system contemplated by the administration.

A spokesman for the Pharmaceutical Research and Manufacturers of America was equally cautious.
On Capitol Hill, Republicans are almost certain to oppose the tax hikes proposed by Obama.

"Everyone agrees that all Americans deserve access to affordable health care, but is increasing taxes during an economic recession ..... the right way to accomplish that goal?" asked House Republican Leader John Boehner of Ohio.

Peter Nicholas in our Washington bureau contributed to this report.

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Comments

Now that's what I cal fiscal responsibility! Not.


Re: 47 million "uninsured"...
12 million are illegals
11.5 million are folks who qualify for programs like medicaid & medicare but have not yet applied
10.6 million make over $75,000 year and chose to not buy health insurance. So much for the "uninsured." Drop Medicare "Advantage" (pork plans) and save another 7.1 Billion Dollars. G.Posner


Before he starts new programs, he had better clear up the mess we already have.

We may not be around in 2011 and he will have hurt more people and jobs.


I'm guessing that Obama is basing his tax revenue on 2006 returns. There are now significantly less people making that sum of money now than there were two years ago.

Alos currently the Average American spends 8000.00 per year on health care so adding 45M will cost at least 360B more per year not the 61.4B a year that the administration seems to think. Finally people who do not have to pay to use a product or service tend to overuse it. Since most new insured will have no payment to make at all they will in all likelihood abuse and or overtax the medical system.

Frankly this is going to be far more expensive than President Obama and his administration claims it will be.


Where is TORT REFORM?
Why isn't Barry put a limit on lawyers compensation for suing doctors, hospitals and drug companies.
Lawyers are the problem with our health care system.


Another giant liberal tax and spend program, to be push through without debate because of the now created Obama crisis economy. Anyone have "sticker shock"? Where is the money for this overhaul toward government control. Hospitals, doctors, and other providers will take a hit but not the lawyers and the malpractice cash cow. The lawyer induced cost of practicing defensive medicine is one of the single great needless expense. Cost effective medicine will be government rationing. Need an expensive test? Wait in line or some government dude will reject it as not cost effective. Might as well have a clause for high maintenance old folks to volunteer to pass on, for the good of the country. All these economic plans are on credit. There is no credit flowing because there is no money, only debt. We will see the taxes eventually on the lower middle class. 250K is hardly wealthy. We are ask to pay for another"s mortgage, many of them irresponsible, and now for healthcare for many non-citizens too. Have you ever seen a government run program cut costs? When the lobbyists and special interest groups (especially those Dems/lefty/liberal ones) along with the major health related corporations get through with this it will be the biggest socialists boondoggle in history. This should be done by a non-partisan commission with a powerful, timely mandate to propose a comprehensive plan, then voted up or down without politics.


When was the last time cuts in govt spending actually happened??? Except when Democrats leave us vulnerable by cutting defense.

Also, there isn't enough money available from "the rich" to pay for this, so, middle class, prepare to fork over.

Also, your health care providers will be so busy filling out additional and triply redundant government forms that they just might have about 2 minutes to spare for you.


Those making $250,000 and up already pay 90 percent of the federal income taxes. So, how will about 3 percent of the populace pay another $600 billion-plus in taxes? And, after we're done taking all of their money, who will be left to take money from?
Without a doubt, in just a month's time, the administration is THE most disastrous presidency in this country's history.


I retired a year ago so my income is drastically reduced. The stimulus bill gave me $400 but because congress refused to patch the automated minimum tax, my federal taxes skyrocketed. So much for tax breaks for the middle class. It's not just the rich, we are all being bamboozled and I am very angry about it. I cannot afford this elitist mentality in my twilight years.


Well, I gave him a chance.

He's a leftist. The smooth words are a cover.

Yes, Virginia, it CAN happen here.


People will can always argue it's too expensive to implement this but in the long run it will save Americans money, result in better services and costs will be reduced. Just look to Canada, the same prescription drugs costs 30% less there ! Staff, HealthcareReviews.com


Really? Europe tried national health care and are in the midst of dismantling it because it simply does not work. Yet we move closer and closer to this very system. Do I want a health system run in the same fashion as Amtrak and the Postal Service? To make matters worse we raise the taxes (penalize) on a segment of society because they are financially successful? This is both stupid and unjust.


Taking away tax breaks or effectively changing the tax codes to suck more taxes out of successful Americans is very simplistic and rather juvenile. It will provide more tax revenues in the first and even second years after implimentation so the new programs can create larger government and spend more tax payer money.

What will happen after that seems to be too dificult to understand for this administration. The "ideas" based on concept and theory that aren't fully thought out will most likely earn them the dunce cap down the road. An expensive dunce cap we will all have to pay for.

As we constantly hear of the "Bad Bush" and "Evil Republican" policies being the linchpin of our national economic problems, short term feel good concepts and the rhetoric necessary to advance these positions occupy the populous.

Politics 101 (Obama Administration) tells you to blame the guy on the way out and claim that CHANGE and only CHANGE can correct all problems. These are the primary campaigning tactics used to fool the sheeple into voting for you. It worked rather well for president Obama but he has to get out of campaign mode now and I fear that our president and his financial backers don't truely understand our economy, so we must HOPE his ideas work.

In the time that it takes to send your child through high school and college, our economy will be no better and maybe even worse.


Noam:

Try spell-checking your posts - it's "wealthier," not "wealither."


Too bad some of the bail money could have gone to health care instead to fat Political Pockets


obama's plan to socialize medical treatment would in future generations start hugh tax increases resulting in the disappearance of the middle class in the U.S.


Posted by: Robert | February 26, 2009 9:28 AM


Evidence please.


Tax cheat Tom Daschle came up with this draconian health plan that will take money from the frail elderly to give to illegals,the unemployed and a variety of the losers Obama prefers to receive government benefits. It is a form of socialized rationing like Canada and UK which come to America to get real health care. Obama is pro abortion and now with this socalled health plan he is for euthanasia for the seniors.When will America wakeup? Jerry White,


Have you tried to get your drivers license renewed lately? Of course this too will fail - it will be like going to the DMV with a wound.


I think it's about time someone made an effort to fix this problem. This is something that will benefit all. I'm 28 and I work for a small company that doesn't offer insurance but I make too much to qualify for medicaid but I don't make enough to afford medical cost on my own. Plus individual insurance plans are not really insurance just discount plans, so why do I have too pay too much and I just found out I'm a mom to be.


This article -- and the president himself -- confuse health insurance with health "care." These proposals thankfully do nothing to reform health CARE. They address the provision of health INSURANCE to people without it today. America's health CARE is the best in the world. Leaders from other countries come here for their treatment. Americans do not want their government to run health "care." Let the doctors do that. Making that health care accessible to those without insurance is appropriate to do.


Those making $250,000 and up already pay 90 percent of the federal income taxes. So, how will about 3 percent of the populace pay another $600 billion-plus in taxes? And, after we're done taking all of their money, who will be left to take money from?
Without a doubt, in just a month's time, the administration is THE most disastrous presidency in this country's history.

Posted by: John D
____


Gee the right-wing kooks will MAKE UP ANYTHING!

That is such a lie.

The upper 1% do not not even pay 50% of all taxes.

The upper 5% ($250000) do not even pay 50% of all taxes.

(And one has to assume that that this right-wing mouth piece is referring to Federal income a taxes.)

The correct distribtuion of tax payments can be found in the US Treasury's annual reports on effective tax rates and tax income.

It comes out every December.


This president is doing everything he can to bankrupt our country. From these pie-in-the-sky programs to everytime he opens his mouth the market tanks. I think it started with his inaugural address when he changed our Christian-Judeo history to Christian-Muslim. That should have given everyone pause.


At some point, the liberals are going to realize that most of those people in the top 2% of taxpayers, actuall set their own salaries. In addition, they already have gobs of money.

They can easily take an income holiday should the tax rates get ridiculous.

But at that point, we will have comitted to the costs that go with this.

That can only mean one thing, hello middle class taxpayers!!!!!


Having a dissproportiate increase in taxes for those individuals in the 250,000/year or more bracket is fair only if it applies to any and all entities making more than 250,000/year including businesses and corporations. The cost of health-care needs to borne by everybody and requiring healthcare insurance to access care is no different than requiring drivers insurance in order to drive.

In addition, if you are taking more of my hard-earned dollars (my income wasn't a gift from above...I trained for a long time and studied my you-know-what off to get where I am) in order to pay for health-care for those more needy than myself as well as medicare, then it better be crystal clear that only US citizens or those with a legal right to be here and are paying into the system are getting those health benefits. You show proof of citizenship or legal right to be here such as green card or you don't get publically-financed care. You can always pay cash to get care anywhere


I can't believe how many grown adults are so afraid of trying new things. Many of you are fond of complaining, but when someone tries to do something, they are attacked as liberal, irresponsible, or anti American. Yet, I don't hear any alternatives from you. The only thing I keep hearing is "more of the same". Tax cuts and massive defense spending did not work for eight years under a party that even supported that plan. Why do you think it would work under a democrat? That fundamental misunderstanding shows how little many of you care about America. You just care about your own interests and your own political party. Finally, Bush signed the first bailout package with literally no strings attached. If "Barry" is going to be repeatedly attacked for being a "spender" (even though his bailout has far more strings), can we also attack the person who started the spending?! Many of you are insultingly hypocritical. Do you not read what you're writing, or do you just ignore anything that happened yesterday?


This is one area where I disagree with Obama.
The system is broken beyond repair. Even major reform which leaves the basic mess intact will fail.
We need single payer national health insurance.


"Do I want a health system run in the same fashion as Amtrak and the Postal Service?"

Robert,

Have you seen Europe's rail system?

The entities you mention have been starved of funding in a deliberate attempts to destroy them since the Gingrich politburo controlled the House.

True story;
There once was conservative congressional delegation from a small inter-mountain western state. They worked for years to kill Amtrak and finally the service to their capitol city had to be dropped for budgetary reasons.

Now the same gaggle of fundy Jesus freaks and airport stall cowboys are clamoring for restoration of service.
It just doesn't get any funnier than this.


"Do I want a health system run in the same fashion as Amtrak and the Postal Service?"

Robert,

Have you seen Europe's rail system?

The entities you mention have been starved of funding in a deliberate attempts to destroy them since the Gingrich politburo controlled the House.

True story;
There once was conservative congressional delegation from a small inter-mountain western state. They worked for years to kill Amtrak and finally the service to their capitol city had to be dropped for budgetary reasons.

Now the same gaggle of fundy Jesus freaks and airport stall cowboys are clamoring for restoration of service.
It just doesn't get any funnier than this.


And while the champions of unfettered capitalism cry about creeping socialism, check out our "socialist" neighbors to the north:

http://tburg.wordpress.com/2009/02/20/and-this-just-in-from-the-christian-science-monitor/


dt,
There you go again, with that logic stuff.
Only in 'conservative fairy tale land' is Canada not the best neighbor a country could have.


As someone who is not making 250,000 dollars a year. Who also doesn't have a government healthcare plan to enjoy. I just wasted my time trying to find concrete info on the impact of Obama's plan on my life.

Obama never operated a business. I hope he can clear his head of class warfare ideas and reward work.

Does America have the will to fight political corruption, illegal immigration, social restructing of society, drugs, health and medical practices, and citizen taxation?

I would say no but hope that will change.


If the $634 Billion is any indication of Obama's health care plan, Obama is planning a radical change in the health care system. The plan has not yet been laid out and already Obama is earmarking more than half a trillion for it and explaining that it will just be the beginning of what will be necessary.

One of the reasons that health care seems to be so expensive (among many others) is the cost of research and development in order to procure new treatments and drugs.

At the moment the health care industry has a significant incentive to pour money into research and development because of the possibility of making money. What will happen when this incentive is marginalized when the government has taken over the health care system? Will our advancements slow down or even cease?

http://www.weeklypoint.com/2009/02/26/obama-budget-plans-634-billion-down-payment-for-health-care-reform/


The CEO salaries of all insurance companies needs to be capped. The profit needs to go back into the company as a whole, not one person. This is crazy. National Health care is not the answer based on the internet research I've done. Emergency cardio care here in the USA has little to no wait, where there is a wait list of 2 to 6 months in countries with nat'l health care. Meanwhile, several die when care could have been prevented. This parallels our insurance companies who deny claims simply to deny them as a quota and profit system.
Payoffs to our rep's is wrong, this parallels mafia activity. Those who accept "bribes" now have a carrot over their heads forever and have to support the CEO's mil/billion take. Taxing is short term, we need control of what is out of control before we lose our Republic.
There are a lot of ideas out there, but to cap the CEO's is perhaps better than a short taxing system. Like I said the profit from our premiums need to go into the system, not the CEO's. Not the state rep's or our President. The minute they do this they are just as dirty and nothing will get accomplished. Any money accepted by any insurance lobbyist should be given back to them, it is our money they accepted. Our health care!


Will someone please clarify?
The way this plan was broken down to me is: If your employer currently pays $250/mon toward your healthcare & you pay $250/mon, you will be taxed on a total extra of $500/mon. If this is true it means I would be paying taxes on money that isn't & will never part of my gross income. I DON'T LIKE THAT IDEA AT ALL.
I'm one of those working-poor who has never earned more than $25K/yr, raised 3 children on my salary without DSS. I find it amusing to hear the complaints of others who can't seem to make ends meet & earn a heck of a lot more than people like me.


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