Support Building for Plan To Tax High-Value Health Benefits Packages
A proposal to impose taxes on health insurers that offer the most costly plans as a way to help pay for health care reform appears to be gaining the support of the White House and lawmakers on Capitol Hill, the Wall Street Journal reports (Bendavid, Wall Street Journal, 7/27).
The tax proposal by Sen. John Kerry (D-Mass.) is the latest plan that Senate Finance Committee leaders are considering as they seek new ways to offset about $320 billion in their health reform bill, CQ Today reports.
Details of the proposal are still unclear, but Senate Finance Committee Chair Max Baucus (D-Mont.) and ranking member Chuck Grassley (R-Iowa) have been hashing out the details in a series of private meetings with the panel's bipartisan negotiating group (Rubin, CQ Today, 7/24).
According to a senior White House official, the specific value of the health plans that would be taxed has not been set, but the range being discussed is between $20,000 and $40,000 annually, the New York Times reports.
Plan a Point of Discussion
An aide to Republicans in the negotiating group said the idea was "on the table in discussions as a serious effort by Sen. Kerry to restart the conversation on bending down the cost curve."
Aides to Baucus and House leaders also confirmed that the proposal is being considered (Wayne/Herszenhorn, New York Times, 7/27).
On CNN's "State of the Union" on Sunday, White House senior adviser David Axelrod said that President Obama found the tax proposal "intriguing." Axelrod said, "That was our big concern, that we not impose vast new burdens on the middle class" (Wall Street Journal, 7/27). He also compared it to the taxes that are excised on the so-called "gold-plated Cadillac" health plans of top executives and managing directors at Goldman Sachs (New York Times, 7/27).
Lawmakers, Industry Weigh In
On CBS' "Face the Nation" Sunday, Rep. Jim Cooper (D-Tenn.), a member of the fiscally conservative House Blue Dog Coalition, called the tax proposal "a very interesting and promising new development in the discussions."
On ABC's "This Week," Sen. Jim DeMint (R-S.C.), expressed concern that insurers would pass on the cost of the tax to individuals and businesses (Wall Street Journal, 7/27).
Robert Zirkelbach, spokesperson for America's Health Insurance Plans, said that new taxes are "only going to make coverage less affordable and (are) not going to bring us closer to the goal of putting our health care system on a sustainable path" (CQ Today, 7/24). He said that the focus on the insurance industry profits is misplaced, adding that only a penny goes to insurers' profits for every dollar that is spent on health care.
Other Tax OptionsOn Friday, Kaiser Health News examined several types of taxes that could be levied on health insurers to generate additional funds to finance reform (Appleby, Kaiser Health News, 7/24). This is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.