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Thursday, Nov. 27, 2014

Johans: Increasing taxes and health care costs is not true reform

Tuesday, September 29, 2009

WASHINGTON -- Sen. Mike Johanns today spoke on the Senate floor to discuss his concerns regarding the proposed tax increases embedded within the Senate Finance Committee's health care legislation.

Highlights of the Speech as Prepared for Delivery:

"In our current economic crisis, the last thing American families need is to see more of their paychecks going to pay more taxes. This legislation presents a darned-if-you-do and darned-if-you-don't-scenario: It taxes you if you have insurance and it taxes you if you don't. People who depend upon medical devices will see prices rise and so will individuals who take prescription drugs. States will have to raise money to pay for the unfair, unfunded Medicaid mandates, which means they will either have to raise state taxes or cut programs."

...

"Most people do not like the notion that Washington tells them how to live their lives, and imposing an individual mandate tax really rubs Americans the wrong way. Not only are we telling them they must buy insurance, but we are telling them what kind of insurance they must buy. Now I know some -- including our President -- argue this isn't a 'tax', rather it is simply about shared responsibility. However, the very language in the Finance Committee plan clearly states that this is a tax that brings in an estimated $20 billion. Where is the President's promise that he would not raise taxes on individuals who make under $250,000 a year? It's missing in action -- it's nonexistent."

...

"In tough economic times -- with unemployment almost in the double-digits -- putting more requirements and mandates on the job-creators and job sustainers is counter-productive. Employers will think twice about hiring more workers. I fear that low-income Americans will suffer the most as the job markets dry up. We must carefully evaluate the details of this legislation and ensure that our attempts to make things better don't ultimately make things worse. I would suggest that in these tough economic times, creating legislation that increases the costs of health care and raises taxes is not true health care reform."

Remarks as Prepared for Delivery:

"Many have come to this Chamber and talked about constituents who have expressed concerns about health care and how their families would be directly affected. The frustration driving many of these individuals to write a letter, pick up the phone, or attend a town hall meeting, continues because they feel Congress is not listening. The biggest misconception is that those who are raising concerns about the President's health care proposals are somehow defending the status quo. That couldn't be further from the truth.

"We can all agree that health care costs are rising at rates that create hardship on many families and businesses, and ultimately are unsustainable for federal and state budgets. I support insurance market reforms that increase access to insurance for people who have pre-existing conditions. I support allowing small businesses to band together to bring down health insurance premiums. I support subsidies for those who truly cannot afford insurance to help them buy down premiums, deductibles, and co-payments. I support real malpractice reform that would curb costs by reducing defensive medicine. These common sense reforms could be the cornerstone of a truly bipartisan solution to our health care crisis.

"But the current proposals have veered in a very different direction. I will not support so-called reform that lowers the quality of our health care, compromises the doctor-patient relationship, or drastically increases costs for Americans. Yet, the provisions working their way through the Senate Finance Committee appear to do exactly that--increase costs and decrease quality. I don't believe that is the kind of health care reform that Americans have sent us to Washington to enact.

"In our current economic crisis, the last thing American families need is to see more of their paychecks going to pay more taxes. This legislation presents a darned-if-you-do and darned-if-you-don't-scenario: It taxes you if you have insurance and it taxes you if you don't. People who depend upon medical devices will see prices rise and so will individuals who take prescription drugs.

"States will have to raise money to pay for the unfair, unfunded Medicaid mandates, which means they will either have to raise state taxes or cut programs. Which state programs do you think Americans will want to sacrifice so Washington can have its way? Cutting programs is never an easy decision and neither is raising taxes.

"States should not be put in this difficult position again and again by an overreaching Federal Government. Employers will be taxed in order to pay for required health care insurance for their employees. These taxes will create financial heartburn that no doctor's prescription can ease. This legislation will require every American to have health insurance-with few exceptions. And not just any old health insurance--it requires health insurance that meets specific qualifications the government has decided the American people need.

"The Finance Committee bill would require you to spend a certain share of your income before becoming eligible for health insurance subsidies. Under the original Finance Committee proposal, the Congressional Budget Office estimated that an individual, who makes $32,400 a year, would be required to pay $4,100 in health care insurance premiums before becoming eligible for a subsidy.

"That individual would also be required to pay, on average, $1,600 in co-payments and deductibles. These individuals would be required, through the government mandate, to spend 18 percent of their income on health insurance. Surprisingly, the cheaper, catastrophic coverage that some prefer would not be considered a so-called 'qualified plan' and therefore, would not be an option.

"Furthermore, if you choose not to have health insurance that meets these qualifications, you could be forced to pay-out as much as $1,900 in additional taxes per family. The Internal Revenue Service will be knocking on your door to make sure you literally "buy into" federally dictated health care reform efforts.

"I have heard from many Nebraskans who feel as if this individual mandate is a direct assault on their freedom. Most people do not like the notion that Washington tells them how to live their lives, and imposing an individual mandate tax really rubs Americans the wrong way. Not only are we telling them they must buy insurance, but we are telling them what kind of insurance they must buy. Now I know some -- including our President -- argue this isn't a 'tax', rather it is simply about shared responsibility.

"However, the very language in the Finance Committee plan clearly states that this is a tax that brings in an estimated $20 billion. Where is the President's promise that he would not raise taxes on individuals who make under $250,000 a year? It's missing in action -- it's nonexistent.

"Last week, this was made clear during the Finance Committee mark-up. When asked about the effect of this individual mandate tax on the middle-class, the Chief of Staff for the Joint Committee on Taxation responded, 'We would expect that some people paying would make less than $250,000.' For working families, the individual mandates will load them up with a fancy benefit plan, covering services they may not want or need, and they will be required to buy it or be penalized. This is a complex and fundamental shift in how we approach health care in this country, and indeed, in how much the government dictates the health care decisions of Americans.

"Furthermore, this legislation raises money by taxing insurance companies, medical device manufacturers, and prescription drug manufacturers. There is little doubt that these increased taxes will lead to higher insurance premiums, more expensive medical equipment, and higher drug prices for Americans. These industries will compensate for the added tax by raising prices, ultimately raising the overall cost of health care in this country.

"Additionally, this plan is likely to decrease research and development in the health care sector, which has been a major driver in innovation and improvements in health care quality. Creating policy that decreases the quality of our health care is counter-productive. Requiring employers to provide health insurance to their employees or be fined is ludicrous. The Finance Committee proposal is expected to collect $27 billion worth of these employer fines.

"In tough economic times -- with unemployment almost in the double-digits -- putting more requirements and mandates on the job-creators and job sustainers is counter-productive. Employers will think twice about hiring more workers. I fear that low-income Americans will suffer the most as the job markets dry up.

"We must carefully evaluate the details of this legislation and ensure that our attempts to make things better don't ultimately make things worse. I would suggest that in these tough economic times, creating legislation that increases the costs of health care and raises taxes is not true health care reform."


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Sen. Mike Johanns
Sen. Mike Johanns
U.S. Sen. Mike Johanns is a former U.S. Secretary of Agriculture, Nebraska governor and Lincoln mayor.

Address: 404 Russell, Senate Office Building, Washington, DC 20510

Phone: (202) 224-4224
Fax: (202) 228-0436

You may contact Senator Johanns by emailing mike_johanns@johanns.senate.gov. If you would like to receive a response from Senator Johanns, please ensure you include your name, full address, and phone number.