Opposing view: Don’t tax health plans

Middle-class workers shouldn’t have to pay for the uninsured.

By Gerald W. McEnteeTaxing high-cost insurance plans to fund health care reform is a bad idea. In fact, it could threaten the medical insurance plans of middle-class workers who obtain coverage from their employers. For many of them, especially those in states with high medical costs, there is nothing “gold-plated” about their health coverage.

In the end, while claiming to target gold-plated or Cadillac plans, this tax-raising scheme essentially is asking the middle class to pay for the health care for those who are currently uninsured. In an era of rising wealth inequality and stagnant middle-class wages, this tax would make health care less affordable for working families and ultimately inhibit economic growth while giving the wealthy a virtual free ride.

Some plans have higher costs because the workforce in the risk pool is older, not because the benefits are somehow more generous. This is the case in the public and unionized sector, where the workforce is significantly older than other sectors.

 

In addition, smaller employers, workers in high costs areas and jobs where women dominate — such as teachers and nurses — would also find themselves falling into this tax trap. These workers should not be penalized because of where they live, who they work for or what they do.

We support President Obama’s effort to make health care more affordable. But taxing the insurance plans of millions of working Americans does not meet the objective of lowering health care costs for millions of middle-class Americans.

Instead of increasing the burden on working men and women by labeling their medical insurance “gold-plated,” why not finance health care reform by looking at those who really have gold-plated plans?

Or, why not place a small surtax on the wealthy, whose taxes were cut so significantly under President George W. Bush? Why not apply the Medicare tax to unearned income that the very wealthy collect in interest and dividends on their investments? Why not limit deductions for itemized expenses or eliminate the subsidies we give to the insurance industry?

The wealthiest nation in the world should be able to provide high quality, affordable health care for all without adding to the burden on working families.

Gerald W. McEntee is president of the 1.6 million-member American Federation of State, County and Municipal Employees.

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