Why is Bennet silent on this backroom deal?

by | Jan 20, 2010 | Blog, Capitol Review, Notes | 3 comments

When politicians pick winners and losers, the stench of sleazy backroom deals is inescapable.

Colorado’s appointed U.S. Senator, Michael Bennet, has inveighed against special deals, like the ones that purchased the health care votes of Nebraska’s Ben Nelson and Louisiana’s Mary Landrieu.  He also talks often about the need for more competition to control costs.

Yet Bennet — as well as Sen. Mark Udall — seems fully committed to voting for a bill that transfers more control to politicians and bureaucrats.  Moreover, Bennet seems oblivious to a provision that cuts a special deal for certain health insurance companies right here in Colorado and undermines competition.

If the legislation passes in its current form, some health insurance companies that are designated under IRS rules as not-for-profit will be exempt from the new tax on insurance premiums.  But many more — Aetna, Anthem, Cigna, Humana, United Healthcare and others designated as “for-profit” health insurers — would not only pay the tax but also backfill the cost of exempting their “not-for-profit” competitors.

Just like any other business, insurers have no choice but to pass along the cost of taxes to consumers.  Because not-for-profit insurers are exempted, they have no tax to pass along.  Hence, the bill creates an arbitrary advantage — not based upon the service or coverage provided but based solely on the insurance company’s IRS classification.

This discriminatory tax doesn’t merely disadvantage for-profit insurers — whom liberal Democrats and their single-payer devotees have designated as “the enemy” — but it also increases costs for employers and employees who today choose to purchase coverage from them and not from their not-for-profit competitors.

Nearly 75 percent of Coloradans are insured by for-profit companies.

The overall cost of the tax — estimated at $70 billion over 10 years — is nothing to sneeze at, and its discriminatory application, to policies offered by some insurers but not to nearly identical policies offered by others, creates a significant disparity.

Why?  The only discernible reason seems to be the fallacious notion that not-for-profit insurers are to be preferred over their for-profit competitors. That’s a choice to be made by consumers not by arrogant politicians.

Apparently overlooked amid these political shenanigans is the fact that for-profit insurers already support our pubic coffers — paying millions in taxes at a time when state budgets are severely strained.

How does tying a millstone around the necks of productive businesses benefit our state or its citizens?  Regardless of their view on health care policy, lawmakers should support competition by allowing Coloradans to choose for themselves — on a level playing field — the coverage that best meets their needs.

Some sincerely believe that “health care is different” — that it should be exempt from the economic realities that impact other businesses and that consumers shouldn’t simply compare cost and quality, as with everything else we purchase.

Yet how does arbitrarily imposing a health insurance premium tax comport with Bennet’s — or President Obama’s — stated goals of increasing competition, reducing federal deficits and reigning in health care costs?

No matter how much the political left despises for-profit business, the fact remains that in America, no one can be forced to stay in business while losing money.  If the premium tax renders for-profit insurers uncompetitive, then they will simply stop selling policies — reducing competition and leaving consumers with fewer choices.

Finally, the premium tax is part of the fiscal shell game that Democrats have used to hide the staggering cost of their health care takeover.  While the premium tax is imposed beginning next year, the promised “reforms” and premium subsidies to help people buy health insurance won’t start until 2014.

That means the federal government will collect taxes for three years to reduce the advertised cost of its health care takeover before anyone realizes any of the professed benefits.

Senator Bennet ostentatiously criticizes others’ “backroom deals” but says he will risk his political career to pass President Obama’s health care legislation, worts and all.

Now think about that juxtaposition: passing a flawed bill is so important that Bennet will overlook the sleazy tactics that enabled it.

That’s no way to make policy, no way to demonstrate integrity, and no way to get re-elected.

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