Senate Democrats Consider Taxing Health Insurance Carriers – Fees to Cover Costs of Health Program will be Passed on to the Consumer

SenateFinance Committee Democrats, are seeking ways to fund the proposed Health Care Reform – the target – health insurance carriers. To date, the hospital and pharmaceutical industries have pledged $235 billion dollars towards the program, with no pledges from the insurance industry. Schumer (D-NY) and Rockefeller (D-WV) feel that the insurance carriers enjoy too much of a profit, and have portrayed them as the villain of health care:

Schumer and Sens. John Rockefeller (D-WV), Debbie Stabenow (D-MI) and Robert Menendez (D-NJ) pounded the insurers, who they portrayed as unwilling to help pay for reform even while they have enjoyed exploding profits

Assuming that the insurance industry is assessed fees of over $100 billion dollars; one has to expect that these companies, already burdened by increasing regulation and mandated state and federal benefits, will ultimately pass that increase onto the consumer. Case in point: Massachusetts.

When the State of Massachusetts adopted the trail version of Universal Health Care coverage, known as “Commonwealth Care”, originally designed to increase competition among insurers, and offer low-cost health insurance coverage to uninsured in the Bay-State, up to 26 mandated benefits were added by the State Legislature. Mandated benefits, are those that the insurance company must include in reimbursements to hospitals and other health care providers, some of the Commonwealth mandated benefits include procedures that, in the past, were normally considered “elective”, (not medically necessary or experimental), which would be the patients reponsibility. One of those that makes up over 80% of the cost to insurers is the addition of the treatment of infertility, which costs the State approximately $687 million annually. In addition, the result of adding mandates has caused private insurance health premiums to rise up to 56 %.

The suggestion to those even contemplating the addition of a national health care program - look to the Massachusetts product, one which when managed by a majority Democrat Legislature, with a State bureaucracy that is one’s worst DMV (Department of Motor Vehicles, pick a State) nightmares has consistently run under-budget, and is a major burden on the remaining taxpayers in the Commonwealth – it is simply a badly implemented and managed program. Nationally - the Republican House has produced a chart (here)that shows the planned bureaucracy – which would even make the Massachusetts Legislature blush. It appears that the Federal government has taken the Bay State Model and adjusted it somewhat.

It is a fact that there is a need to cover the uninsured, which is why there is a Medicaid program – or, in other words, government run universal healthcare – already in place. Making adjustments to the existing program, by offering benefits to the working uninsured at a lower premium, would, in effect, to do the trick. It is simple math at this point; as unemployment rises, with no end in sight, (see Stimulus), the Federal and State governments will continue to lose income, and turning to the private sector, which is caring for the remaining tax base, by assessing additional fees, is merely a band aid – not a cure.