Barbara Keshishian: Health care reform: Senate’s sneaky excise tax proposal would hurt middle class | Commentary | -- Your State. Your News.

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Barbara Keshishian: Health care reform: Senate’s sneaky excise tax proposal would hurt middle class

keshishian120809_optBY BARBARA KESHISHIAN

America needs health insurance reform, and we need it now. But we do not need the kind of reform that the Senate is currently debating, which would shift massive costs onto many middle-class workers who have insurance through their employers. The problem is a sneaky excise tax, ostensibly levied on insurance companies, which would be passed directly on to employees and employers in the form of higher premiums.

The excise tax would be levied against insurance companies on premiums exceeding a certain threshold, which begins as low as $8,500 for single coverage and is slated to rise much more slowly than the average increase in the cost of insurance. In effect, it means that while initially it may affect only a small number of middle-income families, within just a year or two, it will begin to capture many more insurance policies.


One projection, based on the average cost of family insurance coverage provided through the School Employees' Health Benefits Program, shows that the excise tax is likely to kick in by year two. By year ten, based on projected growth in the cost of insurance, the tax could well exceed $10,000 on a family premium. That cost will certainly pass from the insurance company to the employer who pays the premium. Employers will attempt to shift the burden to employees. The end result: higher costs for middle class families.

Even worse, the quality of insurance coverage will almost certainly decline. To minimize or avoid the impact of the excise tax, employers and employees will be forced to consider reduced benefits, again leaving families more vulnerable to unexpected — and potentially uncovered — medical costs. Ultimately, the excise tax would trigger a race to the bottom, raising costs, lowering quality and putting a greater burden on middle-class families who can ill afford it.

There is a better way. The House of Representatives has passed health care reform legislation that accomplishes essentially the same reform objectives as the Senate version without passing the bill on to middle-class workers. Instead, the House bill finances this critical reform with a modest surcharge on individuals whose adjusted gross income is over $500,000, or couples earning over $1 million.

Both bills greatly expand coverage. Both contain provisions to benefit low-income families and senior citizens. Both ultimately reduce the federal deficit. But the House bill is paid for by asking the super-wealthy to step up and contribute their fair share. The Senate bill, as currently written, tries to sneak another tax onto middle-class families.

During his campaign last year, President Obama promised that individual taxpayers earning less than $250,000 per year would not see their taxes increase during his administration. He took the additional bold step of telling wealthy Americans that they might be asked to contribute a little more. The House bill keeps that promise. The Senate bill violates the spirit, if not the letter, of the president's pledge.

It is time for our senators to decide whose interests they represent: the super-wealthy, who will benefit from the Senate's taxing scheme, or the middle-class families who are counting on them for real health care reform.

Barbara Keshishian, a mathematics teacher in New Milford, is the elected president of 200,000 teachers, certificated staff, educational support professionals, and retired members of the New Jersey Education Association. This e-mail address is being protected from spambots. You need JavaScript enabled to view it


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Comments (4)
4 Tuesday, 13 April 2010 17:55
Barbara Keshishian, you must be a complete moron if you think we're going to believe that asking teachers to go one year without a pay raise will hurt our children. Alot of parents have gone long stretches WITH NO JOB, yet they do right with their kids. Why can't your corrupt self and your cronies at the head of the union do the right thing!!!!
3 Friday, 11 December 2009 12:26
The way the reform bill is currently written and presented by the Senate version it would not just hurt those who are employed by the state, schools or municipal workers, it would hurt all middle class individuals who work everyday whether they work for private sector or public sector. If you have not been paying attention to the bill as a whole and you are ill informed off the many things that middle class America stands inherit more of a tax burden on their families maybe you are not the average middle class American then. I know I cannot afford to pay any additional taxes as the American people have been taxed enough. Pretty soon you will just work to pay taxes ad will not get to enjoy any of lifes finer things like a weekend trip or a family excursion.

If middle class Americans are forced to obtain helath care insurance, that burden still falls on someone and better yet where do you think the burden of the less fortunate individuals.. Are should they just be told "sorry u don't count" but I just need you to vote come Election Day.
2 Friday, 11 December 2009 11:54
Mark Sanprass
Last I checked, teachers who make about $50k-$60k a year are the middle class. So are all the municipal, county and state workers. There are many non-government employees who would fall into the same salary range and also get respectable health coverage as a part of their compensation.

While those that make $200,000 a year (plus still get that bonus even during these tough economic times - many time with OUR tax dollars I might add) don't think it is a problem to pay more for benefits, middle class workers certainly do!
1 Thursday, 10 December 2009 22:57
Headline should read - Head of Teachers' Union Afraid that Her Members Cadillac Health Care Coverage Will be Ruined by Health Care Reform Legislation.

Ms. Keshishian doesn't care about "middle-class" workers, she only cares about her NJEA union members and how they will lose their precious (and ridiculously expensive) health care plans, which are fully funded by taxpayers, if the legislation the Senate is debating passes and becomes law.

Most non-public sector union households don't get health care coverage with the same stratospheric employer costs that the municipal and teachers' unions do, so they won't be impacted by the "Cadillac Plan" Tax the Senate legislation proposes. So enough with the crocodile tears for the "middle-class."

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