CA: Health-plan tax would hit California hard (proposed tax levied on "fully insured" plans)

SFGate.com ^ | 1/18/10 | Victoria Colliver

[NormsRevenge]

California could be disproportionately hit by a proposed annual tax in the national health overhaul legislation that critics say penalizes restrictive managed-care policies, which are far more popular in the Golden State than in the rest of the country.

An arcane provision in the Senate health bill calls for paying for expanded health benefits in part by taxing health insurers, like Kaiser Permanente, which covers about 6.6 million Californians, while exempting plans offered by large employers who pay their employees' claims.

Kaiser and other health plans, small businesses and California medical groups that rely on managed care payments are lobbying congressional leaders to keep the provision out of a final version of the bill - or at least apply the tax to all health plans.

"It's a real killer for California. Why should California pay more for health care reform than, say, Idaho or New York? It's not fair," said Don Crane, chief executive of the California Association of Physician Groups, which represents medical groups reimbursed by managed-care policies.

The proposed tax would be levied on "fully insured" plans - these are plans whose claims are paid by the insurers - but not on the plans whose claims are paid from employers' own bank accounts. In general, employers that have the means to bankroll their employees' claims tend to be large businesses.

So how does this affect California? The state could wind up paying a third more per capita in taxes than the average state - and the cost will probably be passed on to consumers in the form of higher health premiums, critics say.

The reason is the state has an unusually high number of people in these fully insured plans - 77 percent of the population compared with a national average of 48 percent.

[NormsRevenge]

“It’s a real killer for California. Why should California pay more for health care reform than, say, Idaho or New York? It’s not fair,”

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ObamaCares?

I doubt it. This sticks it to the very folks that get these idiots elected.

Get real, electorate.

Socialism is a joke , a bad joke.. and Obama is the punchline.

[goldstategop]

Kaiser Permanente is the leading HMO plan in California. I was covered by it when I lived there. I paid nothing out of pocket except co-payments for office visits and paying for prescription drugs. And now Californians are asked to pay extra for the world class coverage they already have! Its stupid.

"Show me just what Mohammed brought that was new, and there you will find only things evil and inhuman, such as his command to spread by the sword the faith he preached." - Manuel II Palelogus

[monkeyshine]

The California Congressional Delegation should have been on this from day one. I know it is a Senate bill provision, but they should have warned the Senate early on. They truly are worthless.

Perhaps this is for the better, more reasons for them to fight in reconciliation. The California delegation (over 50 Congressmen including Pelosi herself) will likely make this proviso a deal breaker. If they don’t, in this political climate, they are risking their jobs. Which also wouldn’t be a bad thing.