Health Care
Rep. Joe Courtney has taken national leadership in squashing the
idea of taxing insurance policies. As of this morning 146 House
members are signed on to his letter to the speaker (below). Murphy,
DeLauro and Larson have NOT. Deadline is Tuesday, October 6th.
Here is the letter that Rep. Courtney is sending out:
Dear Colleague,
This Congress is taking long overdue action to craft an insurance reform package that will improve coverage for millions of Americans, protect families from unfair practices and lower costs.
However, since the unveiling of the Senate Finance health care reform proposal, consideration of an excise tax on so-called “high cost” health care plans has gained attention as a potential revenue stream. The Senate proposal includes a 35 percent excise tax on insurers for plans that exceed certain cost thresholds. Beginning in 2013, the threshold for individual plans will be $8,000 and $21,000 for family coverage.
At present, many middle-income Americans far surpass the proposed thresholds for the excise tax – especially those who have sacrificed pay increases in return for strong benefits packages, or those who live in higher cost states. And, with many of the cost-reducing reforms not scheduled to go into effect in 2015 or even 2018, it is likely that many more will be subjected to the tax in future.
Please join me in sending the attached letter to House Speaker Nancy Pelosi opposing the Senate Finance Committee’s proposed excise tax. To sign on to the letter or if you have any questions, please contact Maija Welton on my staff at 5-2076 or Maija.Welton@mail.house.gov. The deadline for signing on this letter is NOON on FRIDAY, OCTOBER 3.
Sincerely,
Joe Courtney
Member of Congress
---------------------------------------------------------------
Dear Speaker Pelosi:
As Congress continues to consider revenue sources for America’s Affordable Health Choices Act and other health insurance reform proposals, we strongly encourage you to reject imposing an excise tax on so called high cost insurance plans. Such a tax would impact regions with high health care costs in the short-term, and, in the long-term, inevitably extend to more and more middle-income Americans across the country.
As you know, the Senate Finance Committee reform proposal, America’s Health Future Act, currently includes a 35 percent excise tax on insurers for plans that exceed certain cost thresholds. Real life experience with both health insurers and inelastic markets for services such as health insurance has clearly warned us that this tax will be passed along to insurance payers. Beginning in 2013, the threshold for individual plans will be $8,000 and $21,000 for family coverage. In subsequent years, increases in the cost thresholds will be tied to the Consumer Price Index for urban consumers (CPI-U). The proposal also includes a transition relief rule, which will set cost thresholds 20 percent higher for the 17 highest cost states. The transition relief rule will be phased out by 2015. It is important to note that the proposed thresholds for such a tax already have been surpassed for many middle-income Americans in 2009.
For middle-income Americans that have forgone wage and salary increases for strong insurance benefits, these thresholds are simply too low. And, for middle-income Americans who live in the nation’s highest cost regions for health care, the transition relief rule is also too low and phased out far too soon.
A Commonwealth Fund report issued on August 20, 2009, “Paying the Price: How Health Insurance Premiums Are Eating Up Middle-Class Incomes,” outlined projected increases in insurance premiums if nothing is done to change the current cost trajectory. According to the report, average insurance premiums will increase 94 percent over the next ten years, with average annual increases of 5.7 percent. The report went on to conclude that average premium costs for family coverage in 2015 will range from $15,508 in the lowest cost state to $19,731 in the highest cost state. Considering high and low cost states will be treated the same with regard to the proposed excise tax in 2015, the average premium projections in high cost regions teeter on the projected cost thresholds of the excise tax.
Further, the lessons learned from the alternative minimum tax (AMT) should also serve as a warning for the creation of an excise tax on high cost insurance plans. Over the past four decades, the AMT has morphed from a tax on the wealthiest Americans to a tax on the middle class. In 1969, when the AMT was first enacted, the tax impacted only the wealthiest of Americans. In 2010, nearly one in five Americans will be subjected to the tax. A similar situation with the proposed excise tax is possible considering our experiences with medical inflation.
While America’s Affordable Health Choices Act will work to reign in insurance premium costs, these savings will be generated from long-term fixes and may not substantially mitigate premium costs in the short-term before the costs of such an excise tax are passed from the insurer to the customer, including middle-income families.
Beyond these other arguments, there is a fundamental flaw in assuming a tax on so called high cost plans will sway choice of insurance coverage, and in turn, discourage wasteful health care spending. This assumption is based on access to a substantial choice in coverage, which is certainly not the case under our current system. Today, small employers pay more for a given insurance plan than a large employer – not because of benefit quality or an employees’ excessive use of plan benefits, but due to smaller risk pools. While America’s Affordable Health Choices Act will help close most of these price discrepancies, this won’t be achieved until 2018 when all reforms are enacted. Further, America’s Affordable Health Choices Act will allow for continued use of age rating with determining premium costs. While age rating will be restricted, the practice underscores limited choice for cheaper coverage options.
America’s Affordable Health Choices Act includes sensible revenue sources to pay for the legislation. However, inclusion of an excise tax on high cost insurance plans, as proposed by the Senate Finance Committee, could have significant and detrimental implications for millions of middle-class Americans. The short-term impact would be greatest on individuals and families living in high cost regions and for those that have sacrificed pay increases for strong benefits. Over the long term, the number of individuals and families subjected to the tax would likely continue to grow. To this end, we urge you to continue to reject proposals to enact an excise tax on high cost insurance plans that could be potentially passed on to middle class families.
We look forward continuing to work with you to advance health care reform legislation that expands coverage and lowers care costs.
Share the facts. Here's important information everyone should have:
*TenWorstInsuranceCompanies.pdf.
Special and revealing report prepared and released by the American Association for Justice (f/k/a/ american Trial Layers Association).
*How Health Insurance Reform Will Benefit Connecticut
*Benefits of America's Affordable Health Choices Act for Connecticut (by congressional District) EnergyCommerceCommitteeStudy--Connecticut--200907.pdf
*Economic Effects of Health Reform on Small Businesses.pdf
*Why Middleclass Americans Need Health Reform.pdf
*Strengthening the Health Insurance System: How Health Insurance Reform Will Help America’s Older and Senior Women
*America’s Seniors and Health Insurance Reform: Protecting Coverage and Strengthening Medicare
*Out-of-Pocket Expenses: Americans Shoulder the Burden of Growing Health Care Costs
*Coverage Denied: How the Current Health Insurance System Leaves Millions Behind
*Hidden Costs of Health Care: Why Americans are paying More and getting Less
*Health Disparities: A Case for Closing the Gap
*Roadblocks to Health Care: Why the Current system does not Work for Women
TAKE ACTION NOW
OFC Weekly Teleconferences Monday Nights @ 9PM.
Thank you for all that you do.
Val McCall, State Director Organizing for Connecticut
Here is the letter that Rep. Courtney is sending out:
Dear Colleague,
This Congress is taking long overdue action to craft an insurance reform package that will improve coverage for millions of Americans, protect families from unfair practices and lower costs.
However, since the unveiling of the Senate Finance health care reform proposal, consideration of an excise tax on so-called “high cost” health care plans has gained attention as a potential revenue stream. The Senate proposal includes a 35 percent excise tax on insurers for plans that exceed certain cost thresholds. Beginning in 2013, the threshold for individual plans will be $8,000 and $21,000 for family coverage.
At present, many middle-income Americans far surpass the proposed thresholds for the excise tax – especially those who have sacrificed pay increases in return for strong benefits packages, or those who live in higher cost states. And, with many of the cost-reducing reforms not scheduled to go into effect in 2015 or even 2018, it is likely that many more will be subjected to the tax in future.
Please join me in sending the attached letter to House Speaker Nancy Pelosi opposing the Senate Finance Committee’s proposed excise tax. To sign on to the letter or if you have any questions, please contact Maija Welton on my staff at 5-2076 or Maija.Welton@mail.house.gov. The deadline for signing on this letter is NOON on FRIDAY, OCTOBER 3.
Sincerely,
Joe Courtney
Member of Congress
---------------------------------------------------------------
Dear Speaker Pelosi:
As Congress continues to consider revenue sources for America’s Affordable Health Choices Act and other health insurance reform proposals, we strongly encourage you to reject imposing an excise tax on so called high cost insurance plans. Such a tax would impact regions with high health care costs in the short-term, and, in the long-term, inevitably extend to more and more middle-income Americans across the country.
As you know, the Senate Finance Committee reform proposal, America’s Health Future Act, currently includes a 35 percent excise tax on insurers for plans that exceed certain cost thresholds. Real life experience with both health insurers and inelastic markets for services such as health insurance has clearly warned us that this tax will be passed along to insurance payers. Beginning in 2013, the threshold for individual plans will be $8,000 and $21,000 for family coverage. In subsequent years, increases in the cost thresholds will be tied to the Consumer Price Index for urban consumers (CPI-U). The proposal also includes a transition relief rule, which will set cost thresholds 20 percent higher for the 17 highest cost states. The transition relief rule will be phased out by 2015. It is important to note that the proposed thresholds for such a tax already have been surpassed for many middle-income Americans in 2009.
For middle-income Americans that have forgone wage and salary increases for strong insurance benefits, these thresholds are simply too low. And, for middle-income Americans who live in the nation’s highest cost regions for health care, the transition relief rule is also too low and phased out far too soon.
A Commonwealth Fund report issued on August 20, 2009, “Paying the Price: How Health Insurance Premiums Are Eating Up Middle-Class Incomes,” outlined projected increases in insurance premiums if nothing is done to change the current cost trajectory. According to the report, average insurance premiums will increase 94 percent over the next ten years, with average annual increases of 5.7 percent. The report went on to conclude that average premium costs for family coverage in 2015 will range from $15,508 in the lowest cost state to $19,731 in the highest cost state. Considering high and low cost states will be treated the same with regard to the proposed excise tax in 2015, the average premium projections in high cost regions teeter on the projected cost thresholds of the excise tax.
Further, the lessons learned from the alternative minimum tax (AMT) should also serve as a warning for the creation of an excise tax on high cost insurance plans. Over the past four decades, the AMT has morphed from a tax on the wealthiest Americans to a tax on the middle class. In 1969, when the AMT was first enacted, the tax impacted only the wealthiest of Americans. In 2010, nearly one in five Americans will be subjected to the tax. A similar situation with the proposed excise tax is possible considering our experiences with medical inflation.
While America’s Affordable Health Choices Act will work to reign in insurance premium costs, these savings will be generated from long-term fixes and may not substantially mitigate premium costs in the short-term before the costs of such an excise tax are passed from the insurer to the customer, including middle-income families.
Beyond these other arguments, there is a fundamental flaw in assuming a tax on so called high cost plans will sway choice of insurance coverage, and in turn, discourage wasteful health care spending. This assumption is based on access to a substantial choice in coverage, which is certainly not the case under our current system. Today, small employers pay more for a given insurance plan than a large employer – not because of benefit quality or an employees’ excessive use of plan benefits, but due to smaller risk pools. While America’s Affordable Health Choices Act will help close most of these price discrepancies, this won’t be achieved until 2018 when all reforms are enacted. Further, America’s Affordable Health Choices Act will allow for continued use of age rating with determining premium costs. While age rating will be restricted, the practice underscores limited choice for cheaper coverage options.
America’s Affordable Health Choices Act includes sensible revenue sources to pay for the legislation. However, inclusion of an excise tax on high cost insurance plans, as proposed by the Senate Finance Committee, could have significant and detrimental implications for millions of middle-class Americans. The short-term impact would be greatest on individuals and families living in high cost regions and for those that have sacrificed pay increases for strong benefits. Over the long term, the number of individuals and families subjected to the tax would likely continue to grow. To this end, we urge you to continue to reject proposals to enact an excise tax on high cost insurance plans that could be potentially passed on to middle class families.
We look forward continuing to work with you to advance health care reform legislation that expands coverage and lowers care costs.
Share the facts. Here's important information everyone should have:
*TenWorstInsuranceCompanies.pdf.
Special and revealing report prepared and released by the American Association for Justice (f/k/a/ american Trial Layers Association).
*How Health Insurance Reform Will Benefit Connecticut
*Benefits of America's Affordable Health Choices Act for Connecticut (by congressional District) EnergyCommerceCommitteeStudy--Connecticut--200907.pdf
*Economic Effects of Health Reform on Small Businesses.pdf
*Why Middleclass Americans Need Health Reform.pdf
*Strengthening the Health Insurance System: How Health Insurance Reform Will Help America’s Older and Senior Women
*America’s Seniors and Health Insurance Reform: Protecting Coverage and Strengthening Medicare
*Out-of-Pocket Expenses: Americans Shoulder the Burden of Growing Health Care Costs
*Coverage Denied: How the Current Health Insurance System Leaves Millions Behind
*Hidden Costs of Health Care: Why Americans are paying More and getting Less
*Health Disparities: A Case for Closing the Gap
*Roadblocks to Health Care: Why the Current system does not Work for Women
TAKE ACTION NOW
OFC Weekly Teleconferences Monday Nights @ 9PM.
Thank you for all that you do.
Val McCall, State Director Organizing for Connecticut
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