In a post below, I raised questions about the application of a new tax on relatively expensive insurance policies, pointing out the potential inequities depending how it was designed. Well, thanks to Senator Baucus, we now have confirmation that I was correct to be concerned.
As noted in this Boston Globe story by Lisa Wangsness, the tax has a broader reach than so-called "Cadillac" plans. It disproportionately affects states whose health care premiums are above the national average, or plans within states that are more expensive for actuarial reasons.
We are finding out, again, that President Obama's formulation of health care reform as offering more access, lower costs, and consumer choice is flawed and misleading. As long as Congress tries to pass a bill based on this fiction, it will be forced to make political -- not policy -- choices that try to hide the real costs.
But the derivative of doing so is that the battle between the states will begin in earnest: Now, it's just about money. There is a minuscule chance of holding together 51 votes for the Baucus plan when 17 states -- including many represented by Democrats -- are affected disproportionately. Especially because their labor partners oppose it. (By the way, on that front, keep an eye out for union-friendly amendments that would exempt collectively bargained insurance plans from the tax.)
But, here's the rub. If you diminish or roll back this tax, you have to come up with other money to keep the program deficit-neutral, a commitment made by President Obama. If you can't find new dollars, you have to cut back on subsidies for low-income people and undermine the goal of universal access. I think access is the most important goal, but it requires a broad-based, progressive tax plan. We should accept the fact that we have to pay for a national priority.