1. Limit Income-Tax Deductions

By only allowing taxpayers in the top two income tax brackets (33% and 35%) to deduct their mortgage interest, charitable contributions, and local taxes at the 28% rate it is suggested that the Federal government could collect $267 billion over the next 10 years. This is supposedly one of the Obama administrations main tactics for raising revenue. However, numerous Democratic leaders have already spoken out against it claiming it would hurt charities and residents of highly taxed areas such as New York City. Although experts predict that the original proposal will likely not pass into law, they are suggesting that some type of watered down version will.

2. Taxing Employer Provided Benefits

With the support of both Republicans and moderate Democrats in Congress—and even the most influential members of the Senate Finance Committee—the concept of taxing employer provided health benefits is something that has been getting a lot of attention lately. Although House Speaker Nancy Pelosi adamantly opposed any legislation regarding the issue, there are number of recent compromises that have made the new tax more likely to become law. The compromises include capping the value of benefits that go untaxed (for example if the tax-free limit is $13,000, an employee with a policy worth $15,000 would pay income taxes on $2,000), and imposing an income tax surcharge on the wealthiest taxpayers.

3. Tax Surcharge on the Wealthy

Speaking of tax surcharges on the wealthy, increasing the tax rate on taxpayers with incomes of over $200,000 or couples earning over $250,000 has also been discussed as a way to help pay for health care reform. This is the hot proposal in the House. Current proposals would levy an additional 3-4%, with the possibility of an additional 0.6% tax on those making more than $500,000. It is projected that if passed these tax increases would generate an estimated $832 billion in Federal revenue over the next decade.

4. Increased “Sin Taxes”

Increased taxes on sugar heavy soft drinks, tobacco products, and alcoholic beverages (also known as sin taxes) could provide up to $200 billion in additional tax revenue over the next 10 years. According to reports taxes on alcohol were last raised in 1991, and adjusted for inflation they are actually 37% lower today. However, with little support and opposition for dozens of industries, any such increases are very likely to ever see the light of day.

5. Repeal of Tax Saving Accounts and Deductions

Although not a direct tax increase, by repealing tax-advantaged savings accounts for health expenses, and repealing the medical expense deduction the Federal government could save over $250 billion. However, these taxes would mostly affect senior citizens already struggling with huge medical bills, and would directly break Obama’s pledge to not increase taxes on families making under $250,000.

6. Shared Responsibility Payments

Although it may sound confusing, shared responsibility payments are basically fines for not having insurance. By requiring Americans to have some sort of coverage—similar to how motorists must get auto insurance—and enforcing a $1,000 per year fine, the Federal government could collect over $36 billion over the next decade. It would likely include subsidies for lower income Americans, and the concept has gotten support from a number of key Senate Democrats.

7. Expanded Medicare Taxes

One of the final taxes being considered to help pay for health care reform is an expansion of the Medicare tax. Currently the tax is only levied on earned income (wages from your employer, etc.). By levying the tax on capital gains, dividends and other unearned income, and increasing the rate for high-income earners, the government could collect over $500 billion over the next year. However, raising taxes on unearned income is highly unpopular among the American public, and under the current proposal 80% of the tax increase would be paid for by the top 5% of taxpayers.

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A good segment of the population have hoped that the health care reform process would do something about the three major problems of health care, spiraling out of control costs, lack of availability of insurance to much of the population, and a bureaucratic indifference that seems to have permeated the health care field.

There was a good deal of hope originally for ordinary people who needed health care at a fair price. The hope was that health reforms would expand the availability of health insurance to some of the uninsured  and do something to control price increases and some growing issues like a shortage of primary care providers.

But, then we looked at a bill that was the product of dozens of compromises and actually ends up spinning its wheels in place.  The bill is being touted as increasing insurance availability to 30
million uninsured, but experts say we are actually likely to see an increase in the number of uninsured fashion forcing many Americans to drop their present coverage. Premiums, deductibles, and co-payments will continue to soar, even though we initially believed that these controls were the purpose of the reform. Ther are no guarantees that the uninsured will be able to afford new private coverage even with the promised subsidies, which will be more than three years down the road. as the expansion of Medicaid will not take place until 2013 and many states are already pushing back with concerns that the their recession-strained budgets will not allow them to pay their share in adding to their Medicaid programs, potentially leaving millions of the poorest Americans uninsured.

The bill has no cost containment mechanisms for the costs of health insurance or for health care itself. In fact the insurance industy is warning that sharp premium increases will result, and these are likely to come quickly.

The bill will set up a Health Benefits Advisory Committee to recommend a minimal essential benefits package that includes four tiers, insurance industry lobbyists will argue for the most minimal levels of coverage, and we can anticipate an huge number of people who are underinsured.

The public option has been debated a great deal in the news, but as presently constituted it will have a minimal and a negligible role in health care reform. The Congressional Budget Office concluded it would cover only about 6 million people, which will be a very small segment of the population. By 2013, the public option will cost more than private programs, mostly due to covering sicker individuals and its inability to set reimbursement rates for physicians and hospitals as is done by Medicare. Moreover, middle-income families may be required to spend 15 to 18 percent of their income on insurance premiums and co-payments.

The mega 1 trillon dollar health care bill is a potential disaster that all Americans should fear. It appearrs likely to escalate costs, limit availability of care, and do essentially all the things the political leaders promised to protect us from.

More cost, less coverage, higher taxes, and a bigger burden on employers appear to be in the works.

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Both of Florida’s senators say there’s plenty of room for improvement to the health care reform bill being brought to debate by Senate Majority Leader Harry Reid.

Republican Sen. George LeMieux said Thursday he’s still trying to figure out everything the 2,074-page bill does.

“I’m going to be one of those sitting up all night on the Senate floor trying to read this bill and figure out all that’s in it,” he told Scripps Howard. “But what I do know is that it cuts Medicare by $500 billion, increases taxes by $500 billion and does nothing to reduce the cost of health care.”

Noting that 4 million Floridians lack health insurance, LeMieux said, “We all agree there are things that need to be done, but this is the wrong path, especially in terms of taking money from health care for seniors.”

Democratic Sen. Bill Nelson said in a statement issued by his Washington office that “regardless of where anyone stands on specifics, most folks agree the current system can be unfair and too costly and it needs to be fixed. We can’t afford to sit by and do nothing anymore.

“There are good elements to the bill Senator Reid unveiled. It will provide affordable coverage for millions of uninsured Americans, prevents insurance companies from dropping folks who get sick, and denying coverage for pre-existing conditions. The legislation will also reduce the deficit.”

LeMieux vowed, “We’re going to take as much time on the floor as we need to improve this bill. There are ways to do this without so much government. Republicans will come in with amendments as honest brokers, but the Democrats have to be ready to work with us.”

Nelson also said he will “work to improve it (the health bill) on the Senate floor, particularly by trying to force drug companies to lower prices for prescriptions covered under Medicare.”

Nelson has been one of several vocal Democrats who are accusing drug companies of bumping up prices in the past year in order to create phantom savings that support the industry’s pledge to trim $8 billion a year in drug costs as health reforms kick in.

He said he plans to resume efforts to trim the amount the government pays for drugs for about six million seniors under the Medicare prescription drug program through an amendment to the main reform plan.

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