More lies: the tax lie behind the ‘keep your coverage’ lie

iStock_000002098320MediumMost of the oxygen in the halls of punditry has been taken up lately by President Obama’s “If you like your coverage, you can keep your coverage, period” lie.

I say it’s a lie out of respect for the President. I think he’s intelligent enough to know what anyone who read or understood the bill – including his own staff and HHS – has known for the past several years: that it would force millions of people off their current plans and into more expensive policies with coverage that they don’t want or need in order to subsidize other people’s insurance.

Sure, he told Newsweek reporter Richard Wolff, “You know, I actually believe my own [B.S.],” but let’s give him the benefit of the doubt and assume even he wouldn’t fall for that whopper. So that means he made a rational if immoral decision to misrepresent the law rather than debate its true tradeoffs. The decision was immoral because it was a blatant in-your-face lie. But it was rational because Obamacare would never have passed had people known that it included a massive hidden tax based solely on age, health, and eligibility for membership in the he-man woman-haters club. And he wanted it to pass.

Not to get all green eyeshade on you but, actuarially speaking, the elderly, the unhealthy, and the fairer sex have higher health care costs than the young, the healthy, and the estrogen-disadvantaged. That results in the former group being more expensive and, in the case of pre-existing conditions, more difficult to insure. But rather than making affordable coverage more widely available for this group by addressing the true cost drivers of America’s health care system, Obamacare simply gets someone else to pay for them.

And that’s what Obamacare explicitly does. It subsidizes the elderly, sick and/or female by charging the young, healthy, and/or male more than what their actuarial risk would otherwise necessitate.

This is a tax, pure and simple. It forces one group of people to pay more so that others can pay less. It’s a simple redistribution of wealth philosophically no different than a childless couple paying property taxes to support schools; except that instead of calling it a tax and debating its merits as a tax, this redistribution is hidden in a commercial transaction that lessens its efficiency by turning insurance companies into tax collectors, and creates a myriad of other secondary and unintended consequences.

An honest advocate would welcome a more honest debate. Most childless couples, for example, accept the value of education to society and have no problem supporting schools through property taxes. If most people think it’s fair to socialize the cost of medicine by taxing those who have lower medical costs to support those who have higher costs, whether by luck, demographics, or even bad choices, then let’s go into that with our eyes open instead of hiding that tax in an insurance premium and turning one-sixth of our economy on its head.

But the president and Obamacare architects knew they wouldn’t win that honest debate. They knew that if they said they were going to tax Peter to pay Paul (or Pauline) they would lose, so they hid the tax in premiums and turned insurance companies into willing IRS agents … willing because the law forces more people to buy their product at a higher price.

That’s the tax lie behind the “keep your coverage” lie.  And it’s the one that still might doom the law as more people see it for what it is.