Why Taxing High Priced Plans will never work

The Baucus Bill (as explained in the previous post) taxes health plans which premiums are above $8,000 for an individual and $21,000 for a family.  The bill banks on raising over $200 billion in new tax revenue with this new tax.

But this will never happen.

The employers and the employees who can afford these plans will stop buying these plans, and there will be no premiums to tax.  They will simply move to plans priced below these amounts, in order to avoid the tax.

If you can afford $21,000 for a family insurance plan, then you can afford to buy a lower priced plan with a higher deductible.  And you will.  Because the savings created by avoiding the tax will cover the cost of the increased deductible.