One of the many inane things about Obamacare is the Cadillac tax, which punishes employers who provide their employees with “too much” health insurance. The Democrats who supported this are now having to deal with the fact that the employers most guilty of providing Cadillac health insurance are public agencies. Of these, transit agencies have some of the most expensive plans of all.
The Cadillac tax, which takes effect in 2018, is 40 percent of health insurance costs above $10,200 for individuals and $27,500 for families. As of 2013, Portland’s TriMet reported it was providing health coverage averaging $21,000 a year for individual plans. The agency asked employees to accept a cut to $19,000, but even if the union accepted, this remained well above the federal limit. The recent BART strike was over the same issue.
Even if TriMet negotiated a lower rate, it is likely to rise by 2018 due to inflation. Assuming most employees are on the family plan, paying the Cadillac tax for TriMet’s 2,400 employees could cost as much as $20 million per year, which is about 5 percent of the agency’s operating budget. TriMet was already threatening to cut service by 70 percent if unions did not agree to lower benefits. The Cadillac tax could make this even worse.
But this is no reason to hang their best online cialis heads. The two products NF Cure and Shilajit capsules are the two of the best herbal supplements available in the market As we have discussed above there are a number of ED medications, produced to help men (experiencing ED issues) buy levitra Order Page across the world. Leaves may grow 2.5 meters long and generic levitra mouthsofthesouth.com meter wide. Men in their late teens viagra without prescription usa and early twenties are expected to be in their sexual prime, and for the average, healthy male, this is indeed the case. All of this results from layers upon layers of stupidity. Much of it can be blamed on Congress, which made union support a requirement for getting federal transit grants, passed Obamacare, and included the Cadillac tax. Transit agencies are guilty of greedily caving in to union demands so they could get federal transit grants to support operations that ought to pay for themselves.
The unions, of course, want to repeal the Cadillac tax. Democrats in Congress are no doubt reluctant to open that can of worms which would likely lead to calls to repeal much of the rest of Obamacare.
The main reason why health care costs are so high in this country is that more than 80 percent of the population have been insured, so they have little reason to reign in costs. The Cadillac tax is meant to discourage insurance that doesn’t require people to at least co-pay part of their costs. But the fundamental basis of Obamacare, which is that health care can be made more affordable by insuring the other 15 to 20 percent, is completely backwards.
In any case, I can only feel schadenfreude for transit agencies and other public agencies that will soon be hit by the Cadillac tax. Maybe this will give a few more people a hint that government planning and control just doesn’t work.
While I generally agree with the antiplanner that government control has serous problems, and completely agree that transit operators plans are outrageously expensive, I do not agree with any implied conclusion that therefore all government programs are bad. In almost every industrialized country health care for all is provided at lower cost, usually through a government program, and this removes health care costs from transit operations. Ask anyone from any other industrialized country if they want a system as in the USA where one may loose their job because they are ill, then loose their health care because they lost their job will respond in horror at the very thought of a USA like system. Or be denied health care coverage because they have a pre-existing condition? The USA systems seems good until one looses it. They suddenly all the other systems in every other industrialized country look much better. The USA does have a national health care system, it is Medicare. Ask any elderly person if they want the government to get out of the health care business so they will loose their Medicare and can buy their own health care from private insurers and they will react with horror. May of the elderly are very confused on this issue as even elderly Republicans are adamant that this government program be maintained as the private sector does not work. Get everyone on a similar system and work on getting health care cost down as in other industrialize countries. Anyone critiquing other countries health care systems must compare costs and performance for all citizens of that country compared to all citizens, covered or not, in the USA. All critiques I have seen of other countries health care systems compare all citizens of another country to the insured in the US, not the insured and the uninsured in the US.
First in response to the rambling, unsupported, non-paragraphed comment above, a repost from a year ago:
While the USnA spends the most as a percent of GDP and per-capita (we’re number 1!), several other countries (all with universal health care) have higher annual growth of total expenditures on health care, in real terms, according to the OECD. (The USnA grew 4.3%, 0.4% below the OECD average.) UK spending grew 1.1% more on average from 2000-2009 (and to cherry pick, it grew 7% in 08-9, more than 2.5x than the USnA). Spain spending grew at 5.6%, Netherlands at 6%, Greece 6.1%, Ireland 8.4%, and the Slovak Republic led the charge at 10.9%. Of course, several European countries (with universal health) grew at a lower rate than the USnA. Germany has one of the lowest growth rates, but its system is highly corporatist.
“The main reason why health care costs are so high in this country is that more than 80 percent of the population have been insured, so they have little reason to reign in costs.”
In theory this seems reasonable, but there’s a lot more going on, and I’m not convinced that insurance is the primary diver of health care costs. Also from last year’s comment: And then there’s physician pay, which in the USnA far surpass the average of other countries. Of course, USnA doctors also have to pay back a mountain of student loans, spend more time in school, and have to deal with more lawsuits.
Plus I’ve read that physicians in the USnA tend to recommend more expensive testing with expensive equipment. There’s also overconsumption of services, which could be pegged to many routine procedures being provided through insurance.
Other than “government sucks at doing stuff,” I’m having a hard time understanding what Mr. O’Toole is saying here. Here are a few things either I’m getting wrong from decoding today’s post, or Mr. O’Toole is getting wrong.
Is Mr. O’Toole saying that the problem with American healthcare delivery is that too many people have access to quality care?
Is Mr. O’Toole saying that “Cadillac health insurance” for public employees is a good thing? If not, how is a provision in Obamacare eliminating Cadillac health insurance for public employees a bad thing?
“… how is a provision in Obamacare eliminating Cadillac health insurance for public employees a bad thing?”
It would be a great thing if it actually happened. The cost of providing public services would plummet.
However, the powerful public employee unions are already seeking to exempt public employees from a provision that will severely hurt private workers-which would be a terrible thing.
And, as has happened several times already with Obamacare, the President will (unconstitutionally) choose to delay or not enforce the parts of the law that public employees don’t like.
I love the irony of the government employees negotiating to put their benefits in tax-free high healthcare services when they are the very people who feed off the taxes.
+1 Sandy.
Also, how is this “Cadillac” insurance? From the PPT: “TriMet’s 2013 PPO Rates 90%10% co-insurance, $150/$450 deductible plan design”
My last insurance as a teacher was $7200 a year, and I had no co-insurance and no deductible, just a $25 co-pay.
Maybe the Cadillac metaphor is apt: a shitty, overpriced car made by Government Motors™ that’s inferior to the competition.
Frank, from your comments that other nations health care cost are increasing faster than those in the USA I assume that you agree with my points that other industrial countries:
1) Do not have this issue of expensive health car for transit workers. This removes a great deal of the cost associated with transit and other government workers.
2) Have health care systems that cover everyone regardless of employment.
3) Are cheaper as percentage of GDP, although their costs are growing faster than the USA in the last few years.
4) Cover people with pre-existing conditions.
5) That citizens of these other countries would not consider a system like that in the United States.
6) That medicare is a US form of government healthy insurance that is vigorously defended by its users, no matter their political affiliation.
For those of us extremely skeptical of government run anything, the above points would seem to indicate that government has great potential at running a health care system more efficiently than the current US system. Whether this can be achieved with the current political climate and vested interest groups is a doubtful.
Don’t put words into my mouth or use my point to assume anything about my position.
Let me spell it out plainly.
In the OECD, in many countries with universal health care, costs are difficult to control. That is, in many instances when government “manages” health care, costs increase more rapidly than in a corporatist system. (This is not to be taken as an endorsement of a corporatist health care insurance system.)
Frank posted:
“The main reason why health care costs are so high in this country is that more than 80 percent of the population have been insured, so they have little reason to reign in costs.”
I strongly but respectfully disagree (and I concede that the lack of market controls has made matters worse, but like it or not, we feel that everyone is entitled to health care. Please read this series out of the N.Y. Times:
The $2.7 Trillion Medical Bill – Colonoscopies Explain Why U.S. Leads the World in Health Expenditures
American Way of Birth, Costliest in the World
In Need of a New Hip, but Priced Out of the U.S.
The Soaring Cost of a Simple Breath
As Hospital Prices Soar, a Stitch Tops $500
Frank wrote:
In the OECD, in many countries with universal health care, costs are difficult to control. That is, in many instances when government “manages” health care, costs increase more rapidly than in a corporatist system. (This is not to be taken as an endorsement of a corporatist health care insurance system.)
But those nations with “Socialist” medical care (and remember that we in the U.S. use a “Socialist” system to fund health care for most elderly people) spend less on health care as a percentage of GDP than we do.
The Antiplanner wrote:
Of these, transit agencies have some of the most expensive plans of all.
I know plenty of public workers that do not enjoy the gold-plated health insurance benefits that many unionized transit workers and transit retirees feel they are entitled to.
So when the transit Cadillac health care plans come to the end of the line, perhaps some transit operating deficits will decrease?
“So when the transit Cadillac health care plans come to the end of the line, perhaps some transit operating deficits will decrease?”
Driverless trains don’t need healthcare and they don’t crash because they were “distracted” by text messaging…or whatever. http://www.lohud.com/usatoday/article/3849131
Frank wrote:
Driverless trains don’t need healthcare and they don’t crash because they were “distracted” by text messaging…or whatever.
Agreed. Though rail station platforms probably have to be retrofitted with doors that match up to the doors on the railcars in order for a train line to go driverless. Paris did this some years ago with its Métro Line 14
Several on-airport train systems, including the new one at Dulles Airport in Virginia, have such driverless operation.
Somehow I don’t think the unions that represent transit workers in the U.S. are going to be very enthused about fully-automated train line operation.
Frank, from your comments that other nations health care cost are increasing faster than those in the USA I assume that you agree with my points that other industrial countries:
1) Do not have this issue of expensive health car for transit workers. This removes a great deal of the cost associated with transit and other government workers.
2) Have health care systems that cover everyone regardless of employment.
3) Are cheaper as percentage of GDP, although their costs are growing faster than the USA in the last few years.
4) Cover people with pre-existing conditions.
5) That citizens of these other countries would not consider a system like that in the United States.
6) That medicare is a US form of government healthy insurance that is vigorously defended by its users, no matter their political affiliation.
First of all, you need to be careful to distinguish between health insurance and health care.
Secondly, TANSTAAFL. There are two mechanisms for rationing things: price and quantity. Countries with nationalized health care/insurance choose the latter. Whether this leads to better outcomes is a question that requires careful research, and simply comparing things like average life expectancy (which I see all too commonly) will not give you the right answer.
Point #3 is especially important. Whatever relative cost advantage other countries currently have over the U.S. will be eroded over time, indeed it already is happening. This will happen precisely because these countries have national health care/insurance. You cannot effectively treat individuals as taxpayers and ratepayers/customers simultaneously. The incentives to form powerful interest groups (e.g. AARP as the analogous example in the U.S.) to lobby against cuts in benefits or increases in prices is too strong.
The jury is still out on whether Obamacare will deliver the promised cost reductions in the U.S., but to the extent that the possibility of competition is retained, one can always hope. European countries have already passed the point of no return and there is no reason to believe they will be able to achieve any significant cost reductions, especially with a rapidly aging population that votes in large numbers. I am glad these people would not consider our system — we don’t need anyone else imposing additional demands for benefits on our already heavily encumbered system.
Lastly, point #6 is a straw man. Most voters in this country have shown a willingness to leave their principles at the door when it comes to the prospect of free stuff. Singling out any one political group is not meaningful unless one is just trying to score points by confessing the sins of the other Team. Medicare is not ‘healthy’, nor are its clients. It won’t end well.
I was quoting the Antiplanner’s article and agree with you. As mentioned upthread, doctors’ pay is a major factor as are expensive tests. The articles you linked also explain why health care costs in the US are higher and why we spend a higher percentage of GDP on healthcare.
Here’s an interesting study about health care in India. Why is it that open-heart surgery costs nearly 20x more in America? The article is four years old, and some things may have changed, but it provides a fascinating look into a much cheaper and more innovative system.
“The main reason why health care costs are so high in this country is that more than 80 percent of the population have been insured, so they have little reason to reign in costs.”
Holds true only if you accept that (a) no one who has insurance ever got hosed by running up bills that exceeded their coverage limits, (b) the insurance companies that issue those policies don’t think it’s in their interest to reign in costs, and (c) countries that have higher percentage of population covered have higher costs.
But other than that, yeah.
Likely there will be some kind of public employee exemption to the Cadillac tax once it is fully implemented.
Another factor underlying the high costs – advertising. Moda spent $40 million to rename the Rose Garden arena, Kaiser spends millions a year on their “thrive” ads, and other providers do similar things.
Same is true for big Pharm. Watch the evening news lately? It’s littered with adverts warning about certain sexual side effects and erections lasting more than four hours. Talk to your doctor? No thank you!