Obamacare Raises Taxes on the Middle Class — Again
This week sees yet another of Obamacare’s many tax increases take effect – this one a provision to fund comparative effectiveness research. Officially, Section 6301 of Obamacare states that the tax will be imposed “on each specified health insurance policy for each policy year ending after September 30, 2012.” Because many health insurance plans run on a calendar year basis, the new tax takes effect for most individuals beginning this week.
An Associated Press article last week alleged the new provision is a “fee” charged to health insurance plans. But unlike the individual mandate penalty, the Obamacare statute includes specific language that “the fees imposed…shall be treated as if they were taxes” for purposes of IRS enforcement. What’s more, the law amends the Internal Revenue Code to include the following heading:
CHAPTER 34—TAXES ON CERTAIN INSURANCE POLICIES
If the law treats this “fee” as a tax increase and the IRS Code calls it a tax increase, then it’s a tax increase. And this particular tax represents a complete turnaround from an Administration that campaigned against taxing health benefits, yet is now raising them on struggling families. It’s also particularly ironic given the President’s desire to fight for the middle class – taxing their health benefits is slightly incongruous with this newfound posture.
Worse yet is the fact that this new tax on health benefits will fund research that could be used to justify placing limits on costly medical treatments. One medical group is now calling for the use of “cost-effectiveness research” to guide care, and a new ethics manual calling for physicians to be “parsimonious” is eerily similar to former CMS Administrator Donald Berwick’s comments in a June 2008 interview, in which he called for reducing the supply of machines and diagnostic equipment on the grounds of “parsimony.”
So while families are struggling to pay their insurance premiums, Obamacare is raising taxes on health benefits – even as Democrats CLAIM they don’t want to raise taxes on the middle class – to fund research that could limit patients’ treatment options. It’s one more reason why Obamacare remains unpopular with the American people.