There appears to be a mindset in Congress that employers offer rich health benefit plans just because they are generous folks. As a consequence, Sen. Kerry of Massachusetts wants to help pay for health care “reform” by adding a premium tax to insurance companies and self-funded employer plans that are expensive.
According to an article in the Boston Globe, “Such a tax would also have important side benefits. It would discourage the overuse of healthcare services, because employers would have an incentive to buy cheaper, less generous healthcare plans for employees, to avoid the levy. It would also put pressure on insurers to reduce premium prices, the source said.
The tax, whose rate has not been specified, would only apply to the most expensive insurance products.”
Is there any employer in the United States that needs an additional tax as an incentive to buy a cheaper plan? What happens if less generous healthcare plans are offered to employees? Well, here is news for you, it means that the affordability of health care just went up for those employees because to offer a less generous plan it means higher deductibles, higher coinsurance and co-pays and less coverage for certain services.
Moreover, as for reduced premiums, it would seem to me that employers are putting sufficient pressure on insurers to reduce premiums to the extent that no additional tax will have any effect.
Has anyone thought about the fact that an expensive plan for an employer could also be a reflection of the health status and needs of the workforce? Has anyone considered that such a tax would also translate into higher premiums for workers? Has anyone thought about the bureaucracy that would be needed to put this all in operation?
The outright ignorance about the health care system by our policy makers is starting to become quite scary.
PS Kerry had a similar idea in 1994.