Health care debacle

Posted: 29 December 2009 in Uncategorized
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We could have had real healthcare reform: universal coverage by distributing the surplus created by and appropriated from workers. Instead, we’ll have—at least according to the Senate vote—a plan that strengthens capitalism, by increasing the profits of private insurers as well as the profits of all corporations that will need to pay less to hire workers.

That’s what Bob Herbert understands in his critique of the “middle-class tax time bomb ticking in the Senate’s version of President Obama’s effort to reform health care.”

The problem is in the financing, the 40-percent excise tax on so-called Cadillac health plans.

The dirty little secret behind this onerous tax is that no one expects very many people to pay it. The idea is that rather than fork over 40 percent in taxes on the amount by which policies exceed the threshold, employers (and individuals who purchase health insurance on their own) will have little choice but to ratchet down the quality of their health plans.These lower-value plans would have higher out-of-pocket costs, thus increasing the very things that are so maddening to so many policyholders right now: higher and higher co-payments, soaring deductibles and so forth. Some of the benefits of higher-end policies can be expected in many cases to go by the boards: dental and vision care, for example, and expensive mental health coverage.

This means corporations will have to pay less to get access to labor power (thus increasing their profits) and workers will pay more to get access to decent health care (thus lowering their real wages).

“In the real world, companies cut costs and they pocket the money,” said Larry Cohen, president of the Communications Workers of America and a leader of the opposition to the tax. “Executives tell the shareholders: ‘Hey, higher profits without any revenue growth. Great!’ ”

Clearly, this is not health care reform you can believe in.

  1. I think my project of Transfinancial Economics is acutely relevant to many problems of the world.

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