In summer of 2009, as Obamacare crafters were assembling their plan to destroy the U.S. health care industry, they faced several problems, and most of them involved financing.
Over twenty years ago, Mrs. Clinton’s health reform plan died when the Congressional Budget Office (CBO) determined it would cost too much.
Learning from her failure, White House officials knew they had to create a plan the CBO could score as budget-neutral. But where, oh, where, would they find the money to not only subsidize insurance purchases but also fund an “unknowable” number of new agencies, boards, commissions, and task forces?
It was at that point in late-July that Obama’s economic team advocated that the plan eliminate the tax exemption for job-based insurance. What was later dubbed the Cadillac Tax would result in an estimated federal tax grab of $250 billion per year.
But, as Jonathan Gruber told a Boston audience, any plan that ended the tax exclusion would have been a political hot potato. “Economists have called for 40 years to get rid of the regressive, inefficient and expensive tax subsidy provided for employer provider health insurance…It turns out politically it’s really hard to get rid of.”
That’s where then-Senator John Kerry became Gruber’s “Massachusetts hero” by introducing a scheme to trick Americans. “No, no,” Gruber quotes Kerry, “we’re not going to tax your health insurance. We’re going to tax those evil insurance companies!”
An ordinary person responsible for such duplicity might have experienced regret, even shame. But not Kerry, who, like Gruber, aimed to exploit Americans’ “lack of basic economic understanding.”
Less than six months later, Kerry doubled down on his deceit, penning a January 2010 Huffington Post piece explaining his support for the Cadillac Tax.
It will help control future health care costs without — I repeat without — directly taxing employees.
Notice the word “directly?” By this he means the tax on insurance companies will be borne by the worker, but certainly not clearly or directly. It was intended that Americans blame insurance companies and employers for jacking up premiums, deductibles, and copayments. (In fact, Harvard faculty members are already blaming the university for out-of-pocket cost increases.) Later, they hope, we will curse our bosses for eliminating job-based insurance altogether.
The excise tax included in the Senate-passed health care bill will affect only a small portion of the very highest cost health plans.
Not according to the American Health Policy Institute, who projects the tax will “hit 17 percent of all American businesses, and 38 percent of large employers” in 2018. And as Gruber explained, the method establishing the yearly tax threshold means that eventually all plans will be subject to the Cadillac Tax.
For the small sub-set of plans that are affected, the likely impact will be to increase workers’ wages. MIT economist Jon Gruber recently found that the excise tax included in the Senate bill would lead employers to raise wages by $223 billion between 2010 and 2019. In 2019, wages for those affected by the provision will be higher by about $660 per household. I repeat — raise wages.
Did anyone think to ask Kerry how a tax on insurance companies naturally produces higher pay for America’s workers? That’s a curious connection, isn’t it?
Well, you see, Secretary Kerry conveniently omitted the “Employers-Kill-Your-Health-Plan” factor in his analysis. What he failed to mention is his apparent belief that, as employers shrink insurance benefits or dump employees in Obamacare exchanges, they’ll compensate them with higher wages.
After spending years and years hearing from workers tired of seeing their unions forced to spend all of their energy at the bargaining table just to hold on to health care instead of negotiating for better wages, we now have a way to help increase wages and improve health care simultaneously.
If Kerry believed union workers would gleefully skip off to the Obamacare exchanges, he was wildly uninformed.
Let’s not forget: this is the same John Kerry currently negotiating a nuclear agreement with Iran.
More than likely, Iran’s mullahs will fare better than Americans have with Obamacare.
But they may have to sign the deal to find out what’s in the deal.