Obamacare

The Insurance Industry Learns That Congress May Giveth, but Congress Also Taketh Away

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Congress attempts to atone for writing a health-care bill that's been called the insurance industry's "Holy Grail:"

Voting 14-8, the [Senate Finance] committee approved an amendment that would limit the tax deductibility of compensation for insurance executives to $500,000 a year. The limit would apply to executives at companies that get significant business generated by the bill's mandate that nearly all Americans must have insurance. Under current law, businesses can deduct up to $1 million a year in compensation for executives.

Sen. Blanche Lincoln (D., Ark.) said the limit is needed because insurance companies are going to reap a windfall of new customers under the legislation. "This is the right thing, and the right message to the American people," said Sen. Lincoln, who is up for reelection next year. The amendment was supported by all Democrats on the panel, plus Sen. Olympia Snowe (R., Maine).

Perhaps this is not the worst thing in the world (although it may create some problems for insurance companies trying to attract top talent). But it does suggest that, as Ramesh Ponnuru argued in April, the health-care reforms we're seeing now would essentially turn health-insurance companies into regulated and subsidized quasi-public utilities: Everyone is forced to buy in, but as a consequence, the industry is subject to meddling, rules, and strict oversight.

Of course, you can't exclusively chalk this up to unwanted meddling: The insurance companies have supported all of the major parts of the framework except the public plan from early on. Making deals with Congress can resemble making deals with the Godfather—maybe you can get something you want at first, but you never know how much you'll have to pay for it down the road.

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  1. Is this just on salary, or does it include stock options and such? IIRC, the stock options given to executives came into play after a previous cap on executive salaries.

  2. although it may create some problems for insurance companies trying to attract top talent

    that’s exactly what it’ll do… tie another hand behind private insurance’s back so we can make the public option look better by comparison

    1. I hope I am not alone in recognizing the irony that government caps on wages and prices during a time of crisis and turmoil (WWII) sent us down the road to the dominance of employer-provided health insurance and medicare (and ultimately, if we don’t turn around and get off this bad road, completely socialized medicine) in the first place?

      Back during the war, employers who couldn’t offer higher wages to attract and hold the best workers (because FDR wouldn’t let them) rigged a deal with the government to offer tax-free health-benefits as a perk instead. So today, if health insurance companies have trouble attracting and retaining the best talent because of government imposed salary caps, what will they do? Offer SWEETER health benefits? Or maybe travel benefits — an elite lounge and no need to go through TSA security at airports to start, for instance?

      What we need to do is scrap the whole paradigm of health insurance — especially employer-provided health insurance — as the “normal” and dominant means to access health care. Enough of patches applied to fixes applied to improvisations applied to accommodations. Health care should be as affordable as food, clothes, transportation, shelter, and all the other things we need in life, and it should be provided by the freest market we can find it in ourselves to allow. Let’s start focusing on plans and approaches that are intended to achieve THOSE goals.

  3. Well, all governments run exactly like the mafia does; some are just worst kleptocracies than others.

  4. btw, is there a site redesign “rant/suggestion” thread?

  5. Am I allowed to have my heart warmed a bit by the thought of these companies being bit in the ass from their attempts at regulatory capture?

  6. LOL, someone needs to taketh away from those bottom feeders!

    RT
    http://www.complete-privacy.net.tc

  7. Atlas Shrugged strikes again.

  8. In many states, they already are “regulated and subsidized quasi-public utilities”. It’s only going to get worse.

    The government is never going to be able to re-regulate the health insurance industry, Their hands are too bloody. If it were up to me, I’d say just throw the whole God damned thing in the crapper.

    1. Ban insurance! Seriously.

    2. What you call “regulation” we call “locking in market share”. And my bonus.

  9. ? Lord, I was dancin’, dancin’, dancin’ so free
    Dancin’, dancin’, dancin’ so free
    Dancin’, Lord, keep your hand off me
    Dancin’ with Mr. D., with Mr. D., with Mr. D. ?

  10. If they become “regulated and subsidized quasi-public utilities” anyway, why do they even need executives? Just use higher level managers, since that’s the salary level they are offering…

  11. Perhaps the Retardlicans can load up the bill with so many poison pills that none of the bought-off industries will still support it and instead fight for it’s defeat?

    Maybe they could do their job as an opposition party?

  12. Actually what jumps out at me is the assumption implicit in Lincoln’s words; that Congress is granting business to the insurance companies, and is therefore responsible for preventing profiteering. The country is firmly in the grip of people with this command-economy mindset…

  13. Seems to me that nothing will change. Correct me if I’m wrong, but this is just saying that a business that is about to get every customer in the US will no longer have the ability to write-off $500,000 from their taxes. Even if they’re paying a 50% tax rate, that’s only a difference of $250,000.

    With the amount that these folks are making, the company can easily make that up somewhere else (like raising your premiums, for example).

    I don’t see the pay going down at all.

  14. Why not make auto, fire, and life insurance public as well?

  15. Well, that’s what happens when you make a deal with the devil…

  16. I, for one, welcome our new Fascist Overlords.

    1. ?

      What do you mean ‘NEW’?

  17. Um, small point, but “may giveth” is ungrammatical. Verbs can take archaic “-eth” only where they can take modern “-(e)s.” Try “. . . Mayhap Congress Giveth, But Congress Also Taketh Away.”

  18. “Talent” one of the most misused words in our economic dialogue.

  19. ~ OUR U.S.CONGRESS AT LEAST DOES NOT DISCRIMINATE ~ THEY AFFORD POORER AMERICANS THE SAME EMERGENCY ONLY HEALTH*CARE THAT ILLEGAL ALIENS RECEIVE ~

    AMERICA~LOVE IT OR LEAVE IT~ 45,000 DEAD POOR AMERICANS LEAVE U.S. EVERY*YEAR DUE TO 3rd WORLD HEALTH CONDITIONS ??

    ** POLITICS IN AMERICA IS VERY SIMPLE TO UNDERSTAND WHEN OUR MIDDLE~CLASS & WORKING POOR CITIZENS ARE ALL BEING FORCED 2 ALLOW BIG $$$ TO CONTROL THE PEOPLES HALLS OF THE U.S.CONGRESS..

    ~ SADLY, OUR VERY OWN AMERICAN HEALTH*CARE SATANIC VERSES HAS KEPT 45 MILLION POOR AMERICANS IN 3rd WORLD HEALTH CONDITIONS ~

    DON’T WORRY BE HAPPY ~ THE WORLDS SELECT BILLIONAIRES AND THEIR FRONT CORPORATIONS WILL ALL GET ON BOARD THE NEW HEALTH~TRAIN OF $$$…**ADDING 45 MILLION MORE AMERICAN CITIZENS TO THE CURRENT GIVEN PROFIT MARGINS + WITH A FUTURE AMNESTY PROGRAM
    (6 months) AFTER NEXT U.S.PRESIDENTIAL ELECTION = $$$$$$$$$………

    WEALTH~CARE FOR ALL THE HEAVILY INVESTED INTERNATIONAL AND AMERICAN BILLIONAIRES IN THE CURRENT U.S.HEALTH FOR THE WEALTHY ONLY SYSTEM WILL NOT END ANYTIME SOON… IT WILL ONLY BE RE~ARRANGED TO MAKE SURE ALL THESE MEGA CAPITALISTS PROSPER IN JUST ANOTHER FASHION .

    THE FINE ART OF DENYING 45 MILLION AMERICANS HEALTH~CARE IN OUR JUDEO~CHRISTIAN NATION IS NOT RACIST AT ALL… IT’S JUST OUR BEHIND THE SCENE WEALTHY ELITE CITIZENS USING THEIR TREMENDOUS WEALTH TO DIRECTLY INFLUENCE OUR U.S. CONGRESSIONAL REPRESENTATIVES IN KEEPING ALL THE little poor folk down *

    AMERICAN RELIGIOUS LEADERS ALL ACROSS THE USA HAVE ALWAYS BEEN ABLE TO COUNT ON THEIR RELIGIOUS FLOCK TO CONTRIBUTE(TITHE)THEIR HARD EARNED MONIES TO THEIR MINISTRIES EVERY WEEK. THE MAJORITY OF AMERICANS ATTENDING RELIGIOUS SERVICES IN THE U.S. ARE MIDDLE~CLASS AND WORKING POOR CITIZENS WHO NOW DESPERATELY NEED THE HELP AND SUPPORT FROM THESE SAME U.S.RELIGIOUS LEADERS IN LOBBYING THE U.S.CONGRESS TO PROVIDE PROPER HEALTH~CARE FOR ALL POORER AMERICANS.

    ***THERE ARE CURRENTLY AN ESTIMASTED 45 MILLION MEN WOMAN AND CHILDREN WITHOUT HEALTH~CARE IN THE WEALTHIEST COUNTRY IN THE WORLD????

    SILENT AMERICAN RELIGIOUS LEADERS WHO ALL HAVE HEALTH~CARE FOR THEMSELVES AND THEIR FAMILIES IS MUCH MORE FRIGHTENING THEN THE POSSIBLE DENIAL OF A FUTURE HEALTH~CARE PLAN FOR ALL…

    **45,OOO AMERICANS DIE EACH YEAR IN THE WEALTHIEST COUNTRY IN THE WORLD DIRECTLY RELATED TO THEIR LACK OF PROPER HEALTH*CARE.

    LAWYERS FOR POOR AMERICANS
    (424-247-2013)

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