Wednesday, September 23

Mr. President. If Mandatory Health Insurance is not a Tax...

The President declared on Sunday that requiring all Americans to have health insurance is not a tax.
Obama gave ABC News' George Stephanopoulos a stern talking-to Sunday for suggesting that the mandate to buy health insurance would amount to a tax. He even taunted the host for citing the dictionary definition of "tax" to make his point.

"The fact that you looked up Merriam's Dictionary, the definition of tax increase, indicates to me that you're stretching a little bit right now," Obama said. - Fox News
The article does point out that failure to have insurance results in a penalty 'Excise Tax'. And even the AP has written that mandatory health care is a tax. In fact, everyone, even the President's backers in the media, are calling B.S. on the President's claim that mandatory coverage is not a tax. It is.

However, the press is missing an important issue in this story in that the President has taken the position that this is not a tax. So let's take President Obama's position for a second and pretend that mandatory Health Care Coverage is not a tax. And let's take the President's own goals of Health Care Insurance Reform:
In an address to a joint session of Congress, President Obama explained how health insurance reform will provide more security and stability to those who have health insurance, coverage for those who don’t, and will lower the cost of health care for our families, our businesses, and our government. - White House
In order to keep costs down, the President needs to balance the increased costs of subsidizing coverage for the poor and sick by forcing more healthy people to contribute to the system by paying for insurance knowing that few of them will need it. In other words he needs the young to buy health care insurance because most all of them will be forced to overpay into the system to subsidize the Medicare of others.

As the Wall Street Journal points out, while the President is claiming that his Health Care Reform will result in cheaper health care for all, in reality it will result in much more expensive health care for the young:
• Young people. If the government mandates that everyone must have health insurance, healthy young people will have to buy policies that don’t reflect the low risk they have of getting sick. The House and Senate bills do let insurers set premiums based on age, but only up to a 2-to-1 ratio, versus a real-world ratio of 5 to 1. This means lower prices for older (and wealthier) folks, but high prices for the young. “They’ll have sticker shock,” says Rep. Paul Ryan, ranking Republican on the Budget Committee. - WSJ (Covered in my post: Obama's Health Care Tax on the Young)
So not only will you no longer have the option of not paying for health care, you will be forced to buy overpriced plans to subsidize the care of others paying less than their 'fair share'. So not only does the proposed health care reform legislation plan to tax people, but it is also a big form of redistribution, given that many who are currently not covered will have much of the cost of covering them shifted to others.

Here is a very good point as made on Ace of Spaces:
By the Way: Geoff asks how many people making $200,000 or more per year don't have health insurance already.

Like... 1%? 1% of super-billionaires who self-insure?

In other words, 99% of those hit by the tax (yes, tax) will be making less than $200,000 per year. [Note: Tax for failing to have health care insurance]

You lie. - Congressional Tax Committee Chief of Staff: Yes, It's a Tax; and Yes, It Will Hit Those Making Under $200,000 Per Year

Real Health Care Insurance Reform (and it does not take 1,000+ Pages!) - 12 Aug 09
Democrats: 'The goal is Single Payer. The path is via the Public Option' (Video) - 19 Aug 09
Obama's Health Care Tax on the Young - 23 July 09

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