The "moderate markup" for health reform does turn out to be good for the blogging business. It is rare that one finds so much concentrated inability to apply logic to economic problems.

Carl Hulse and Robert Pear report in the Times that it also contains new taxes:

To help finance the legislation, Mr. Baucus is expected to propose a new tax on insurance companies selling policies with premiums far exceeding the national average, roughly $13,000 a year for family coverage.

One presumes that this tax would be based on the value of the policies sold. but this is a good tax because it would not increase you marginal tax rates and, besides, insurance companies will be paying the tax, right?

Except that we all know that companies respond to increases in sales and excise taxes by trying to raise their prices. If demand is very responsive to price they won't be able to increase prices and they will bear the burden of the tax. If demand is not very responsive to price, companies will be able to raise prices and force most of the tax burden onto the consumer.

Or we used to before mathematics and logic were replaced by dogma in introductory economics courses.

Wonks Anonymous submits that most of these above average policies are not really about covering face lifts but about comprehensive medical insurance that does not leave the consumer bankrupt or deeply in debt in the event of illness. Wonks Anonymous submits that demand for these policies is not likely to be responsive for price. This is a tax on the luxury of comprehensive health insurance. This tax will be borne by the consumer.

Now add this to another part of the plan. Insurers can charge older people higher rates which reflect their higher than average health care costs. Meaning that the geezers will not only find themselves in the geezers ghetto. They will also be paying extra taxes for the privilege.