They’re Nuts

A primary justification for new health care legislation has been the alleged high cost of care in the US. So, why is Congress considering a new tax on insurance premiums?

The House Democratic plan calls for raising income taxes on upper-income people to pay for covering the uninsured. Baucus has instead proposed a tax on high-cost insurance plans worth more than $8,000 for an individual policy and $21,000 for family coverage.

Proponents of the insurance tax, which Obama has endorsed, say it would help to lower health care costs by encouraging people to become more cost-conscious health care consumers.

Some of the high-cost plans are so expensive because they come with no co-payments or deductibles, and cover every dollar spent for health care. Not all of them provide such "Cadillac" benefits, however. Some are very expensive because they're sold to companies with older employees, or workers in high-risk occupations.

Much of the spending that makes health care appear expensive is made by rich people. They have the money, after all.

Another big chunk of spending is made by those in high-risk occupations. In fairness, those who take more risk should pay more. Construction workers will need more care—as a group—than cubicle workers.

Those who consume more care, for decent reasonable reasons, pay higher premiums. But, Congress wants to lower health care costs by making health care more expensive for them.

Congress is nuts.