Most of the “help” this bill will do is dubious at best. Help is being defined as giving insufficient subsides to Americans now forced by the government to buy extremely expensive, poorly regulated, junk insurance. Without banning annual limits and an extremely high out-of-pocket cap (which thanks to a massive loophole is not really capped at all), the insurance regulations are basically meaningless. Having this new, mandated “coverage” will not stop you from being bankrupted by accumulated medical debt should you get seriously ill. Insurance that does not protect you from financial ruin if you get sick makes a mockery of the entire concept health insurance.
The harm this bill will do thanks to the excise tax on employer-provided insurance benefits is enormous. The health care bill is designed with the goal of making millions of middle class Americans' health insurance coverage much worse. That is not a bug, it is a feature.
The excise tax is meant to force your employer to cut back your insurance benefits, reduce your coverage, and increase your co-pays and deductibles. This is not the conclusion of partisan think tanks, bloggers, or activists, this is the conclusion of the non-partisan Congressional Budget Office (CBO) and the Center for Medicare and Medicaid Services (CMS). They CBO concluded:
[A]n estimated 19 percent of workers with employment-based coverage would be affected by the excise tax in that year . Those individuals who kept their high-premium policies would pay a higher premium than under current law, with the difference in premiums roughly equal to the amount of the tax. However, CBO and JCT estimate that most people would avoid the cost of the excise tax by enrolling in plans that had lower premiums; those reductions would result from choosing plans that either pay a smaller share of covered health care costs (which would reduce premiums directly as well as indirectly by leading to less use of covered medical services), manage benefits more tightly, or cover fewer services.
The CMS also concluded:
In reaction to the tax, many employers would reduce the scope of their health benefits. The resulting reductions in covered services and/or increases in employee cost-sharing requirements would induce workers to use fewer services. Because plan benefit values would generally increase faster than the threshold amounts for defining high-cost plans (which are indexed by the CPI plus 1 percent), over time additional plans would become subject to the excise tax, prompting those employers to scale back coverage.
To translate, they both conclude the tax will effectively force employers to scale back the health insurance benefits they offer in order to avoid the excise tax. This can be done by reducing what benefits the plan covers and/or increasing cost sharing (i.e. higher co-pays, higher deductibles, higher out-of-pocket limits, and possibly lower annual limits). If you have a good employer provided health insurance plan, it will be dramatically scaled back. Contrary to Obama's direct promise, you will not be able to keep the coverage you currently have, and that is by design.
The real problem with this excise tax on what are dubbed “Cadillac” plans is that it is not indexed to health care inflation. In the first few years, it will only affect high-end plans, but, after a decade, it would force employers to make the vast majority of employer-provided health insurance plans much worse. A decade after reform starts most Americans will have much worse health insurance coverage as a result.
Instead of paying for reform with a tax on the richest one percent of Americans, like the House bill, the Senate bill pays for reform by worsening the insurance coverage for the vast majority of Americans. Ruining the coverage of most working class Americans to get the money for a huge corporate boondoggle that will only enrich the insurance companies while not stopping medical bankruptcy in this country does not sound like a good trade.