(CNSNews.com) – The Democrats’ proposed $540-billion tax hike to help pay for President Obama’s health care reform plan will boost costs for small businesses and thus force more people into the president’s proposed government-run health insurance program, said Rep. Michael Burgess (R-Texas), a doctor.
“The short answer to that question, if I may, is yes,” Burgess told CNSNews.com, when asked if the proposed tax hikes would lead many businesses to cut costs, particularly health coverage benefits, to pay for the tax increases.
Burgess, an obstetrician and gynecologist by profession, heads the Congressional Health Care caucus. He also said that many people would be forced into the “public option” program gradually to keep down the anticipated costs of the program.
“The bill wants to force everyone out of the private market, [and] into the public option plan,” said Burgess, “but not too fast, because if you push it, then it’s going to score very high by the Congressional Budget Office.”
Obama’s “public option” plan would establish another government-run health care system, in addition to Medicaid and Medicare, which would mandate that companies provide health insurance and that every person receive coverage.
The administration says that this plan would create a “public option” market that would compete with private insurance companies to help keep costs down and give people more choice.
Critics, however, say that the “public option,” which would be publicly funded with taxpayer money, would have a major advantage over private insurance because it could always rely on the public purse to cover costs.
It would never actually have to manage itself competitively or in a free-exchange marketplace because it would be insulated from real consumer demand and could ration supply as needed to control costs.
At Monday’s press conference, several House Republicans denounced the “public option” and indicated that the proposed tax hike, being pushed by House Ways and Means Chairman Charles Rangel (D-N.Y.), would not solve the problem of health care costs in America.
When it comes to tax increases that could force small businesses to limit or drop their health coverage, Rep. John Fleming (R-La.), also a physician, said: “I think that indirectly strikes to the heart of the problem.
“The way you get costs down in any economy – and remember that health care is 20 percent of our total economy – the way you get costs down and services up is through competition,” Fleming added.
Even if we had “a free trillion dollars for 10 years,” said Fleming, there is still nothing in any of the Democrats’ proposals to “do anything about competition that would drive costs down.”
“Once you start on the road of regulation, then you always need another, another, and another regulation,” said John Hoff of the Galen Institute. “It is inevitable.”
Hoff said that the current Senate health care proposals seem to be “turning the rhetoric of which we have seen over the last 20 years into legislation” with no “intervening thought process.”
Rangel introduced his $540-billion tax plan last Friday. The legislation would tack “surtaxes” onto the income taxes paid by individuals and couples in the upper brackets of the tax code.
An additional one percent income tax would be levied on families making over $350,000 per year and individuals making over $280,000.
The rate would jump to 1.5 percent for families making over $500,000, and double to three percent for families making over $1 million.
According to Burgess, we should “look at the next 10 years” because “that’s going to be the key to about what the real cost of this is.”
“The quicker you push people into the public plan,” he said, “the greater the cost is going to be for the overall bill.”
In an effort to stall Democratic health care legislation, Fleming has proposed
H. Res. 615, which would urge congressional supporters of a government health care plan to “forgo their right to participate in the Federal Employees Health Benefits Program (FEHBP) and agree to enroll under that public option.”
The Health Care Caucus will hold another forum on July 27, before Congress’ August recess.