The New Insulin Pump Tax and Health Insurance "Reforms"

Section 552 of the Bill, HR 3200.

I see what you’re saying, Scott, but I’m not on the same page. Simply changing the rules does not make a tax increase in my estimation unless it raises my baseline tax liability. Are we talking semantics or math? I’m not sure.

Take two people with the same income and deductions and therefore the same baseline tax liability. Taxpayer A works for a company that provides and FSA and taxpayer B doesn’t.

A has been given a special opportunity to reduce his taxes that is not available to B, who is otherwise in exactly the same boat. So A has dropped ‘below’ the baseline tax liability that they both once shared.

If changes in the tax rules either bring A back up closer to the baseline or even TO the baseline, of course he is paying more taxes than he did before, but it’s not a tax increase.except on an individual scale.

In my view, a tax increase is a broader concept that affects an entire class of taxpayers based on their income alone.

So, maybe it is semantics. In any case, I don’t view this change in the law as offensive to me or a violation of any pledge not to raise taxes.

But that’s just me.


We might be “off the hook” for our current pump and CGM hardware, but the reservoirs and infusion sets for our pumps and sensors for our CGMs do fall into the DME category that will see an increased tax. I have no expectation that manufacturers will absorb those extra costs. This is not a non-profit industry. They will pass whatever tax increase there is right onto the customer. If we’re lucky, some of it will be paid by insurance (that is if private insurance still exists - I’m not so sure anymore), but the majority will come out of our pockets (be it in the form of higher copays, deductables, or even premiums).

From my perspective, the bigger concern is what happens when the government decides that I don’t really need a pump or CGM? What happens when some new study (government-funded of course) says that testing 10 times per day is excessive for a type 1? It’s the (very possible) arbitrary, bureaucratic decisions that scare me the most.

Like many others, I like my current insurance coverage. I’ve had it for a while, and we’ve developed a good rapport. I know what my meds and supplies will cost me each month, and I plan for that. I don’t want it to change. I also like my FSA, which my husband and I use every month. If a $2500 cap is placed on FSAs, we’ll no longer be able to pay for all medical expenses using pre-tax money. We’ll also (very likely) be pushed into an even higher tax bracket.

I’m with Jim - I feel sick just thinking about it.

My only comment would be that an entire class of taxpayers would be affected, everyone who has an FSA falls under that umbrella. It does effect my taxable income because any amount over the cap is now taxable, whereas before it wasn’t.

I guess we’ll just have to agree to disagree.

But the change isn’t based on income alone. It’s based on circumstances over which most employees have little control. Either an employer offers it or it doesn’t.

So, let’s disagree. I think this health care reform stinks anyway. I used to think that ‘any reform’ was better than nothing, but now I’m not so sure.

All we can do is get active and raise our voices.


That’s because your loyalty to your chosen party has apparently caused you to reach for any justification, no matter how strained, to rationalize what they are doing as ok. Your “baseline tax liability” ruse is an illogical distraction - your tax liability is determined by a complex set of rules, the “baseline” is not justifiably distinguished from any of the other rules of the system, it’s just a number in the calculation like any other. But since that number is not changing, you’ve decided that this one is special and different and it’s only an increase if they change that one. I’ll say it again - wow.

And to suggest that if they only raise taxes for some of the chosen group it doesn’t violate a pledge not to increase taxes on anyone in that group once again strains credulity. Obama said “I can make a firm pledge. Under my plan, no family making less than $250,000 a year will see any form of tax increase. Not your income tax, not your payroll tax, not your capital gains taxes, not any of your taxes.” No family making less than $250,000 a year. My family makes vastly less than that. My taxes will increase. The pledge is clearly violated.

But it would seem that if the Democrats are behind it, you’re ok with collecting extra taxes from the poor and disabled, and you couldn’t care less if they break their pledge. The least you could do is admit it rather than trying to mischaracterize it.

I’m not sure enough facts are available to make an informed decision yet.

But I do know this:

47 Million people do not have health insurance at all, about 20 percent of the population under the age of 65.

13.2% of people are considered in poverty in the nation. (Generally considered to be about four times the cost of groceries for a year, last I heard it was about $24,000 for a family of FOUR)

As far as taxes go, 43.4% of Americans pay no or have a negative tax liability (Earned income credit)

Don’t you think we as a nation should help these people? or should we pretend they don’t exist?

Obviously, what we are doing now isn’t working. At least not for everybody.

It did not say my taxes did not increase - only that reducing this deduction is not a ‘tax increase’ and I readily admit that it may be only a matter of semantics. In my view a ‘tax increase’ is a rise in taxes across the board based solely on income and regardless of individual circumstances.

You are right. Based on my logic removing the home interest deduction is not a tax increase. I would not like it if it was done and I would fight tooth and nail to try to stop it because it would raise my taxes. But it is not a ‘tax increase’ in my estimation even though it would suck.

Not every device used to increase tax revenue is a ‘tax increase’ and removing or limiting deductions and/or credits is one of those devices. The reason I take this view is that the only entire set of rules that apply to everyone regardless of status is the baseline tax liability based on income. The credits and deductions each person in the same bracket are eligible for are personal.

Not everyone in the 15% bracket qualifies for the home mortgage deduction. Not everyone in the 15% bracket is employed has an FSA. Not everyone in the 15% bracket has the same number of personal deductions. But they are all in the same baseline tax bracket

Remove or change the deductions and only the people eligible for those deductions are affected. They individually pay more taxes and each can say they’ve had a ‘tax increase’ but that’s not truly what it is. When you change the rules so that everyone with the same taxable income moves to a higher bracket, or everyone in one bracket moves to a higher bracket - regardless of the individual credits or deductions they get - that’s what I call a ‘tax increase.’

Using an individual’s ‘total tax liability’ as the gauge of whether there has been a ‘tax increase’ is no measure at all. It’s a moving target because the same changes could move ‘total tax liability’ up for some, down for others and have no affect on the rest. Changing the FSA will increase the ‘total tax liability’ for some, but will have no affect for people who don’t have an FSA to start with or who already have a limit of $2,500. Those affected will have increased ‘total tax liability’ to be sure, because they are losing part of a tax benefit unavailable to others.

If anyone wants to say that because some people have increased total tax liability there has been a tax increase, fine by me. That’s not my definition of a tax increase. You might as well say that becasue someone had a new baby in the household there has been a tax reduction.


Unless I’m mistaken, families who are at or below the poverty line already qualify for Medicaid.

I know plenty of people who choose not to have health insurance. They could get it if they wanted, but they don’t. Not sure how many of those 47 million fall into that category, but I’d be interested to find out.

If 43.4% of Americans pay no tax, should the other 56.6% of hardworking Americans have to pay for EVERYTHING? Seriously?

I think that, as a nation, we’d be more inclined to give to the many charitable organizations that help the needy IF we weren’t taxed to the gills. I’d happily give more of my income if it weren’t already taken from me every two weeks. I want to have that choice.

You are citing to statistics that are irrelevant to the discussion of the fact that they are adding taxes for middle and lower class diabetics and other disabled and ill people, seemingly trying to change the subject rather than addressing the point.

But I’ll address it anyway. The 47 million figure is widely exaggerated and disputed since if you dissect it, (a) 9+ million of those are non-citizens (and no, I don’t think we should be providing them health coverage), (b) the way the survey in question was conducted did not adequately distinguish between people who were without insurance for the entire year in question and people who went without coverage for a few months between jobs, etc., © of the remaining 37 million, even if we assume all of them were uninsured for the entire year of the survey, over 17 million of those make over $50,000 a year and could afford coverage but choose not to buy it, and (d) of the remaining 20 million or so, it is estimated that up to 14 million are eligible for Medicaid and SCHIP and simply do not sign up. So we’re now from “47 million uninsured Americans” to less than 10 million - if you base your argument on grossly misleading statistics, it’s hard to have a reasoned discussion about the matter. If you wanted to cover those, let’s round up substantially to 10 million, and the cost of simply adding them to Medicare would be a fraction of what is being proposed by Congress and the Obama administration.

But again, in any event, even if you’re a centrally planned economy, pro-big-bureaucracy fan and for the most part never met a tax you didn’t like, to me, the idea of taxing the ill and disabled from the ranks of the poor and middle class to pay for this is repugnant. I get the feeling you disagree, and as I said above, I suspected that some would.

You don’t know what party I support. (Hint: It’s not the Democratic party.) You don’t even know my opinion on the bill just passed by the House even though I just told you what is was. I just wrote that it stinks but don’t let that get in the way of an opportunity to start another rant and ascribe to people beliefs and sentiments they havent’ expressed.

I don’t view it as a tax increase and I therefore don’t view it as breaking a pledge. It’s as simple as that. It’s not a characterization or justification of anyone else’s position, statement or policy, it’s my view the proper definition of a ‘tax increase.’ Period. I never believed taxes would not go up, I never based my vote or support on any such a pledge, which I never believed in the first place and No, I don’t care if he breaks it or not. I don’t believe he has and if he does, I don’t won’t feel betrayed because I didn’t buy it to begin with. George Bush the First taught me that lesson.

As for collecting extra taxes on the poor or disabled, the poor don’t have FSA’s and not everyone with an FSA is disabled. I previously objected to the medical device tax.

If every comment, even on the definition of terms, is going to become an excuse for partisan ranting, I’m out of this thread.


What is the basis of your fear that you’re going to lose your current insurance coverage?


Come on - there is a clear distinction between a change in the tax rules and a change in someone’s circumstances - having a baby is totally dissimilar and you know it.

Again, I stand on the point - your taxes are a function of a set of rules, an equation, and it’s logically specious to say that changing one number in the equation resulting in a higher tax burden is an increase but it’s not an increase if you change a different number in the equation having the same net effect, with neither reflecting a change in underlying circumstances. With all due respect, you are simply making up an arbitrary distinction to rationalize your predetermined position.

Obama said no family making under $250,000 would experience an increase under his plan - not that he would increase it for some families under $250k and not others, which you assert makes it not an increase. His meaning was plain. He did not say he would not raise the “baseline tax liablity” (a made up concept) - he said “I can make a firm pledge. Under my plan, no family making less than $250,000 a year will see any form of tax increase. Not your income tax, not your payroll tax, not your capital gains taxes, not any of your taxes.” To suggest that this is not violated by adding additional income tax burden for people making a fraction of that level is beyond a stretch.

Because Obama has made no secret of the fact that he’s a strong proponent of a single payer, universal healthcare system. He once declared a commitment to accomplish that very thing by the end of his first term as President (although he’d probably now claim that his quote was taken “out of context”). He has extremely socialist ideals (as he described in his “spread the wealth around” blunder), which are not what this country was founded on. They don’t represent what I want for the future. I see this current bill as just the beginning.

Terry, suffice it to say I find your distinction about what is and is not a tax increase logically specious at best - most would probably say disingenuous.

What’s more, in light of Obama’s very broad and clear pledge that no family making under $250k experience a tax increase of any kind, arguing that he is not breaking his pledge is laughable, and this renders your claim about your own political leanings doubtful - Green Party, perhaps? Communist party? In any event, it is apparent you will never agree and that in any event, tax increases on the ill and disabled of the middle class who actually use larger FSAs, like diabetics who use them to pay for supplies, are ok by you. You have made your position clear, thanks.

Darn it, ran out of time mid-edit! Ah well. That’ll teach me to proof before submitting rather than editing later.

Actually, my point was:

Don’t you think we as a nation should help these people? or should we pretend they don’t exist?

Jim, I regret hijacking your thread because I know it was not about the defniition of the term ‘tax increase.’

I’m glad I was clear. I am okay with the ill and disabled of the middle class, of which I am one, paying increased taxes because I do not see how it is to be avoided if our country is to provide health benefits to every citizen. And I think it is important for our country to provide health care to all of its citizens. Not in this current bill, but in some fashion other than the ‘every man for himself’ system we currently have.

I don’t think it’s going to be done for free and I am willing to pay for it. We can talk about how much I’m willing to pay in another discussion. Call me Green or call me a Commie if you want, it’s going to cost. (But if I WERE a commie, I’d expect it to cost me nothing, wouldn’t I?) If I’m getting the benefit of it, I expect to have to pay.

Like you, I do object to paying more than my fair share. But that wasn’t the point of the original post as I saw it.

I don’t think Obama broke his pledge, but I don’t care if he did and I don’t care to convince anyone else whether he did or not. I never expected him to keep it anyway.

Again, I regret taking your thread down this tangential path. The definition of a ‘tax increase’ is another topic.


That 47 million people includes those who choose not to have insurance so is not an accurate number. I know quite a few that are just hoping they and their family do not get sick because they would rather have the extra cash then pay for health insurance.

There are a lot of folks out there who already can’t afford their meds and supplies and now they will be looking at an increase on any equipment they need. At the very least the manufacturers will pass on the cost to the insurance companies who will in turn pass it on by raising deductibles.

I just hope all that wanted a change are happy with the change they are getting.

Thanks Terry. Here is a link to the detailed summary of the tax implications of both this amended bill and the senate version yet to be voted on. Hope this helps clarify some things…and yes there is a 2.5% excise tax added at the time of the first taxable sale on “certain devices” (? what this means…does it definately mean pumps, CGMS, etc.?)…paid by the manufacturer. Interestingly, the senate version actually gives credits to manufacturers making devices for chronic illnesses…hopefully we will get something that encourages the manufacture, sale and safety of medical devices used by those of us w/ chronic illnesses…it would make sense given long term cost savings.