When the producers of the successful “Jaws” motion picture planned a sequel to the picture, a plan for marketing the new film was developed. To remind the viewers of the first picture of the danger, they used the slogan “just when you thought it was safe to go back in the water” here comes the shark again.
The same could be said of President “W”, just when we thought it was safe for the working class to go back into the water, along comes the shark again. After his narrow win in 2004, Bush proclaimed his election “a mandate by the people for his policies.” However, when his party was soundly defeated in the midterm elections last year, a true mandate was declared by the American people that they had enough of George Bush and his agenda for the rich.

While a smart man would have scaled back on his attack on America’s working families, the President forged ahead in his “damn the torpedoes” style and rolled out a plan to go after working family’s health care benefits in his State of the Union address. In his plan, Bush stated he wanted to “assist families without employer provided health care coverage by issuing tax breaks to those who purchase their own insurance.” He feels the problem is that many Americans have “too much insurance” so he wants to tax what he calls “gold plated plans.” This sounds good – until you look at the problems with the plan.

Bush intends of providing a deduction of $7,500 for an individual and $15,000 for a family who purchase their own health care insurance. This plan would encourage individuals to purchase lesser coverage plans to increase their benefit from the tax deduction. The result will be more people “underinsured” and carrying a great risk of health care debt. (Bush’s overhaul of the bankruptcy law in 2005 now prevents individuals from filing bankruptcy due to health care bills.) However, the pitfalls of the plan do not end there.

Fiction: The plan would improve the lives of the middle class by paving a way for the uninsured to access health care coverage.
Fact: Bush’s plan is in two parts, with the first being the tax credit for those purchasing health care coverage and the second part lifting the tax exemption for employer provided health care. So, anyone who receives health care benefits that are rated above $15,000 a year would now find themselves taxed on those health care benefits. The latest census records show that 175 million Americans obtain health care benefits from their employer and 27 million Americans purchase health care outside the workplace. Then of course there are 48 million Americans with no health care. The Bush plan would result in those having comprehensive plans (such as union members) seeing their tax burden increased because of the value placed on their benefit plans.

Fiction: Only the rich will see this taxation of their health care benefits because only they have these expensive plans.
Fact: Studies show the wealthy who buy their own insurance tend to purchase plans with higher co-pays and lower plan prices. The wealthy can afford these higher deductibles and tend to be healthier than lower income people based on their health maintenance and better diets. The 27 million who would see the benefit from this plan would include a large portion of the wealthy who buy their own health care. So if they wealthy do not have what Bush calls “gold plated” health care plans, who does? The middle class with comprehensive health care plans that include medical, dental and prescription drug coverage. You know – people like YOU!
Let’s use Delphi employees for an example. CEO big mouth Steve Miller raved everywhere about paying his first tier employees $65 an hour. Any Delphi employee knows their wages were no where close to this. So who did he get that figure? The average Delphi first tier employee makes about $27 an hour. So-
$65 per hour (including all benefits)
-$27 per hour (actual wages)
= $38 per hour (for benefits)
$38 an hour
X 1800 hours a year
= $68,400 for benefits
- $15,000 allowance for benefits *
= $53,400 that will be eligible for federal tax.
*(this is deduction is for those with a family, a single individual would only get a $7,500 tax credit)
Most Delphi tier one employees fell within the 28% federal tax bracket which equates to $14,952 a year in federal taxes. How would you like to pay an additional $14,952 in federal tax just for having decent health care benefits? Delphi’s second tier employees have a benefit package estimated at about $28 an hour. Most second tier employees will fall within the 25% tax bracket if filling jointly with a spouse and they work much overtime. After their $15,000 credit for a family, they would still owe another $8,850 in federal tax on their health care benefits.

Fiction: The President’s plan would allow more Americans to have health care benefits.
Fact: Even the President’s own forecast show the plan would only make health care affordable for 6% (or about 3 million) of the 48 million Americans who are currently uninsured. Actual numbers are probably much lower than this. What the plan would do is encourage mid and small level employers who currently offer basic health care coverage to their employees to drop this coverage justifying saying their employees could buy their own coverage by utilizing the tax break. This would mean the employees who receive more cost efficient health care coverage provided by employer pools would see less coverage with higher cost by utilizing more expensive private plans. Some experts say the plan could jeopardize employer provided health care for 147 million of those 157 million with this type of coverage.

So if the President’s plan will result in more Americans losing health care coverage and those who don’t find themselves paying thousands in federal taxes for them, who benefits from the proposal? The wealthy that’s who. Essentially all this plan does is provide another tax break to the wealthy and affluent who have benefited from Bush’s past tax programs.

America faces a serious health care challenge and the only solution this President can offer is to “level the playing field” by placing more Americans at risk by eliminating their health care coverage or shifting it to a “market based system” such as he did with the Medicare Prescription Drug plan. By moving coverage from the federal government to the private sector, cost went up while service declined. Profit based health care plans only benefit the insurance companies, not the insured.

The chance of this terrible plan being passed into law is unlikely in a Democratic controlled Congress, but we can’t take that for granted. Every American that has employer provided health care must keep the pressure on their elected representatives to oppose any system that taxes the working class’s health care benefits, while urging Washington to find affordable ways to offer health care to those without it, with a single payer national health care system being the answer. Until this issue is settled, it isn’t safe to go back into the water the working class swims in. Remember, the shark still circles at the White House.