House Democrats Mull Plan for ‘Windfall Profits’ Tax on Insurers
On Thursday, House Democratic leaders said that they are considering proposals to add a so-called "windfall profits" tax on private health insurers to help pay for expanding coverage in their health care overhaul legislation (HR 3200), CQ Today reports (CQ Today, 10/8).
A similar windfall tax in the Senate Finance Committee's health reform legislation would levy a $6 billion tax on insurers -- such as CIGNA, Aetna and United Healthgroup -- with each insurer's portion determined by its overall market share (Vaughan, Wall Street Journal, 10/8).
House Speaker Nancy Pelosi (D-Calif.) said that she has asked the House Ways and Means Committee to determine how much revenue could be generated from such a tax but that the idea is "very preliminary." She added, "There's more that the insurance companies could contribute to this health care reform. They're going to get 50 million new consumers, many of them subsidized by the taxpayer. They can put more on the table."
Rep. Gerald Connolly (D-Va.) said that House leaders first outlined the proposal at a small meeting on Wednesday night and introduced it to the whole caucus on Thursday morning. He said that no details were discussed on the tax, including the rate of taxation or how much revenue it could potentially provide (Allen, The Hill, 10/8).
House Ways and Means Committee Chair Charles Rangel (D-N.Y.) said, "We really haven't studied the argument, it's just that we've been getting a lot of recommendations for things to look at for additional resources, and that happens to be one among others" (Wall Street Journal, 10/8).
Connolly predicted that the tax would have "a lot of resonance" in the Democratic caucus (CQ Today, 10/8). He said, "The pharmaceutical and hospital industries are putting money on the table" to help reform the U.S. health care system but the "insurance industry is conspicuous by its absence" (Haberkorn/Rowland, Washington Times, 10/9).
"The idea of going to the insurance companies to get them to bring something to the table, either voluntarily or through legislation, is an idea that's being floated out there," Connolly said (Allen, The Hill, 10/8).
Some members were not in favor of the windfall profits tax idea, preferring a proposal that would enact a surtax on high-income U.S. residents (CQ Today, 10/8).