Tuesday, December 29, 2009

Indexing of healthcare plans

What part of indexing doesn't Congress understand?

Apparently every part.

Minimum wage was never indexed for inflation. For a long time neither was Social Security.

The Alternative Minimum Tax was never indexed for inflation, so now a tax on the very rich is becoming, each year, more and more of a disaster for the middle class.

It's as if nobody on Capital Hill can understand elementary math and percentages. If the cost of living goes up say 5% per year, then a salary that was adequate would have to double after about 15 years to maintain the same purchasing power.

The Senate healthcare bill puts a large tax on so-called "Cadillac" healthcare plans -- ones that cost a family more that $23,000 per year. The tax would be 40% on amounts exceeding that number. Doesn't sound like so much now (unless you sacrificed a salary increase to buy a very good plan to protect your family). However, the cost of healthcare is not increasing at 5% per year; it's more like 15%. At that rate, the not unreasonable $12,500 plan will cost $25,000 in only 5 years; thus, the Ford plan will have become a Cadillac in cost, without any change in coverage.

This taxation of healthcare without indexing is a terrible idea, and it is wholeheartedly supported by the Obama administration. It's another example of a problem that politicians promise will be fixed some time in the future. That's what they said about the Alternative Minimum Tax but it was never really repaired, just covered with a Band-Aid each year.

There may come a time during the reconciliation process where the healthcare bill becomes so bad that even I won't support it any longer.

Will we ever have a political party that actually is dedicated to protecting the people instead of big business?

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