Diabetes Tax Provisions in the Senate Health Bill

Some of you have seen my prior posts (or if not, can find them) on the taxes imposed on diabetics in the House health “reform” bill.

Here are a few of the provisions that may affect you in the Senate Bill (citing to http://democrats.senate.gov/reform/patient-protection-affordable-care-act.pdf) by virtue of imposing taxes that will disproportionately be borne by or affect diabetics. Whether you oppose or support the current “reform” effort, I would suggest that you contact your representatives and let them know you oppose the imposition of new taxes that will be borne primarily by the ill and disabled of the middle class, including diabetics.

  • Multi-billion dollar taxes on drug makers (Sec. 9008, p. 2010), and medical device manufacturers (Sec. 9009, p. 2020) based on sales volume, effective imposing taxes that will obviously be directly passed through to the consumer on drugs and medical devices like insulin pumps and CGMS systems.

  • As with the house bill, Flexible Spending Accounts are reduced to $2,500 max, where many employers now allow $5,000 or more, so you will no longer be able to contribute enough to cover an insulin pump or cover the rest of your diabetes treatment expenses. Section 9005, p. 1999.

  • You’ll no longer be able to use FSAs to buy over the counter items without a prescription (less of a big deal to some, but useful and certainly a tax increase on people who are not rich). Section 9003, p. 1997.

  • The medical expense deduction floor is raised from 7.5% to 10%, as if 7.5% wasn’t already high enough to keep most people from benefiting. Section 9013, p. 2034.

  • A 40% tax will be imposed on health care plan costs in excess of $8,500 for individuals or $23,000 for families. (Sec. 9001, p. 1979). This rate will only be allowed to increase at a government computed COLA rate, which rates have historically understated inflation substantially, which means effectively than in 10 or 20 years, most if not every private plan will likely be a “cadillac” plan with a large excise tax attached, probably routing everyone but the super rich into the public plan “option” in the House bill or that will no doubt be the next step if not passed shortly.

  • A direct multi-billion dollar tax on private health insurers, which again will serve to materially increase the cost of private health insurance and therefore route people into a public “option.” Section 9010, p. 2026.

OUCH! but what public option are you talking about in the last two points?

Currently, the Senate Bill has no public option as of this morning. Only the House Bill has a public option.

It will certainly be interesting to see how they reconcile the bills, but in any event, even aside from all of the other taxes, this will clearly materially increase the cost of health insurance, not just by virtue of massively increased regulatory burden, but by new direct taxes on private insurance and insurers. (Consider: It it really likely to ensure a healthy private insurance market not just to regulate them more, which you can debate the virtues of, but to directly and uniquely tax health insurers more than other kinds of business? Will this incent capital to flow in to, or out of, that business as compared to other possible investments? And what is the intent of taxing private insurance policies - think about the so-called “cadillac” provision after 20 or 30 years of understated CPI based COLA - will more, or fewer people get private insurance as as result, and what will happen to those people who can no longer afford private policies as they become prohibitively expensive due to massive taxes on the policies as well as on in the insurers, the drugs and devices that are covered, etc.? The intent to move people to a public system is utterly obvious if you’re not trying hard not to see it.)

“Patient Protection” indeed.

yep and the thing is, these are the same elected officials that have been, for decades, taking money from social security/medicare surpluses to fund “other” things. Social Security/Medicare would have no problems at all right now if those tax monies had been left where they were supposed to be.

They’ve done learned such a good lesson with that, oh and the Post Office, that I’m sure this will will be totally different. NOT

wow, I wish our BC/BS PPO was only $13,000. ours is WAY more, plus all those $25 copays every time I get a Rx or go to a doctor. and it’s just me and my husband.

As of this year, I changed jobs to a large multinational with a variety of policy offerings including a premium PPO type offering that certainly exceeds the $23,000 penalty level in the bill once you add a spouse and kids to the policy. I took this job in material part because of this insurance offering, taking a very large pay cut in the process, so that I didn’t have to worry so much about coverage for CGM systems, pumps, etc.

I now expect that the offering will likely be eliminated - my employer is unlikely to pay a big fee hike to cover the tax and will instead just drop the policy and tell employees, rightfully, that the government is cutting their permitted benefits. The same is likely to happen to union people and large enterprise employees all over America. Boy do I feel well cared for!

ahh… hate 'em all, works for me

Thanks for taking the time to review the bill(s) and post the info. I’m not a supporter of this bill, and it’s helpful to see exactly how some of the provisions will affect me. I am someone who uses flex spending $$ to pay for OTC items, and I really liked it. Oh, and the deduction floor increase from 7.5% to 10% is a joke.

It’s going to get interesting around here . . . and not in a good way.

You’re welcome - glad to do what I can do assist the community with understanding exactly what is being done in the name of “Patient Protection.”

and there is also a clause allowing insurance companies to limit benefits to a “reasonable” amount and while we start paying these extra taxes now, we see no additional benefits from this legislation until 2013

I’m not so crazy about the HCR bill. Above all else, I wanted a public option, but beyond that, in its current form, I think there are a lot of problems in addition to the absence of that. That being said, if we’re going to have HCR, which we desperately need, the money has to come from somewhere, and yes, those costs will be passed along to us, the same as the costs to have roads, libraries, and public schools are passed to us. If we didn’t shoulder some of the cost in one way, we were going to shoulder it in another.

So these provisions to the bill could affect each of us to varying degrees, depending on our individual circumstances, but if it wasn’t these exact provisions, which again, I can’t say I wholeheartedly support, it would have been some other provisions about which everyone would likely be complaining.

As a teacher, I did the same. My pay is nowhere near commensurate with my schooling that I invested in, and I looked for districts that had great benefits. Now, my service is all for nought. Thank you, American government! You really solved the problem, didn’t you!

We don’t need health care reform, we need health care costs reforms, to bring costs into control, so people can take advantage of the greatest health care system in the world.

We need to lose the TORTs, eliminate existing conditions, and we need open market rules for buying insurance. Neither of these is addressed in the bill, and in fact the democrats have flat out said they can’t and won’t touch the TORT issue because the lawyers are too powerful. I guess that shows us who really runs this country. Remember that when asked where their authority comes from to enact such sweeping legislation, the speaker replied, “are you kidding, are you kidding?” and that was all she had to say on the subject.

Everything else, is a negative that cripples our nation and will be among the final nails in the coffin of freedom so many of us take for granted.

The reason nothing takes affect until 2013 is so Obama can be re-elected. As a serious conservative, I will go on record now and state that in November 2010, democrats will retain the house and senate without any real challenge, because Americans on the whole have such short memories, and are suckers for getting something, for “nothing” We continue to slide into the abyss, and we have seen that protesting, mailing, emailing, and polling mean nothing to the people who America stupidly put into office in 2008. As ye sow, so shall ye reap, so reap the benefits of demanding everything for nothing, and suffer the consequences of believing in liars and phonies who say one thing, and do another.


Because the people America put into office in 2000 or 2004 did anything constructive??

The bill in its current form isn’t what it could or should be, but pointing fingers at the Democrats is incredibly short-sighted because both parties have colluded to make the bed in which we all now lie.

If you want to talk about who really holds power, the people who really run the country are the people with all the money (who tend to be Republican by the way…).

Both parties? The topic is health care, and don’t tell me you think both parties are involved in this debacle :slight_smile: This is all liberals, all the time. No one with an R by their name has had any input into this process of bill writing at midnight, behind closed doors, even tho the president promised America that his would be the most transparent administration ever, and that all legislation would be debated and discussed on C-Span and posted on the net for all to see. What a liar he has turned out to be, a bold faced, socialist liar who has already broken every promise he made during his campaign, and Americans fell for it because so many of them want everything, for free.

As for the past administration? The key word is past. Go back two administrations, and find a man who preferred oral sex, lying to a federal judge, and tampering with witnesses, to defending our country against the many terror attacks that occurred on his watch.

This administration is bankrupting our country at a record pace, and enslaving our children, and their children. There is no way to defend what they are doing.

Can you post facts to back up your claim that the people who run this country are all rich republicans. I am sure you cannot.

Tried not to reply, because its politics and doesn’t belong, but you can’t get away with just blowing off the fact that the health care bill is indefensible, because of what someone did in the last administration. If the bill is “not what it could or should be,” then why is it going to become the law of the land and turn over 1/6 of our economy, to a entity that couldn’t even give rebates in cash for clunkers without screwing it all up? How come the term “public option” is still undefined, but you are in favor of it?

The American people have little interest in liberty. Instead, they want the impossible: home ownership for those who cannot afford homes, credit for those who are not creditworthy, old-age pensions for those who have not saved, health care for those who make no attempt to keep themselves healthy, and college educations for those who lack the wit to finish high school. Moreover, they want it now, and they want somebody else to pay for it.

The moderators should lock this thread, before it goes even further away from discussion of diabetes.


This “helath care” bill is a bunch of bunk, most probably unconstitutional–and HURTS most of us. I have not talked to anyone (conservative, liberal, green party, libertatian, non-voting apathetic) who is going to be helped with their helath care quality or cost by anything this bill contains.

it is a travesty, hopefully it will die in reconcilliation or at the supreme court.

before it can hurt us

Unfortunately, this bill could be ruled constitutional because it is congress passing a law “necessary and proper” to fulfill one of its main responsibilities: regulating interstate commerce. Way to go Jimmy Madison on writing that wonderful “elastic clause”.

Post retracted. We’ll just have to agree to disagree because we have fundamentally differing views. Although, I have to say I think it was uncalled for to insult so many Americans simply for exercising their right to vote for the candidates who seemed to best represent their views. This is America, and people aren’t required to agree with you, and just because you believe one thing is right or wrong, doesn’t mean that makes it so for everyone.

regulating interstate commerce is a big &&(&…but the most unconstitutional is --requiring the purchase of something to be a citizen in good standing-- Nary a constitutional lawyer can provide a footing for this one…

There are other constitutional issues–but it seems to be the one most likely to turn it turlte