Support in Congress Builds for New Tax on Job-Based Insurance
Proposals to tax employer-sponsored health benefits to pay for a health care overhaul are gaining support among Democratic lawmakers working on health care reform legislation, the Washington Post reports.
During a Senate Finance Committee closed-door session Wednesday, the proposal "won a surprising degree of acceptance," according to the Post.
The White House has expressed opposition to the proposal but also has said that all health reform funding options are still on the table. Republicans included the tax in the health reform plan they released this week (Montgomery, Washington Post, 5/22).
The Senate Finance Committee is considering a number of options on the tax exemption for employer health benefits, including:
- Capping the amount of health benefits that can qualify for an exemption;
- Taxing benefits for higher-income residents;
- A combination of the two previous options, in which tax-exempt benefits are capped only for higher-income residents; or
- Eliminating the exemption and creating a system based on deductions or tax credits (California Healthline, 5/19).
Sen. John Kerry (D-Mass.) warned that taxing only wealthy families and individuals "doesn't make sense" because it would raise too little money, but "you've got to be very careful how far you go" down in the income threshold, noting that if "you come down too low, you're impacting workers and threatening the employer-based system" (Washington Post, 5/22).
House Ways and Means Committee Chair Charles Rangel (D-N.Y.), who previously has previously said he would not support changing the exemption for employer-sponsored health benefits, on Thursday indicated that his committee is evaluating taxing employer health benefits as a funding source (Edney, CongressDaily, 5/21).
Rep. John Larson (D-Conn.), a member of the House Ways and Means Committee, said, "There's a strong sentiment that still exists in the House" against taxing employer-sponsored benefits, but "we understand how important it is to get a package through."
An unnamed Ways and Means member said, "Everyone hates it. But where else do you go?" (Washington Post, 5/22).
Support for Public Plan
On Thursday, Sen. Sherrod Brown (D-Ohio) and 27 Senate co-sponsors introduced a resolution (S Res 156) calling for the inclusion of a public health insurance option in any health care reform legislation, Politico reports.
The resolution does not mention how the public plan should operate or what form it should take, only that there should be a public option for U.S. residents.According to Politico, the resolution is "the latest effort by a bloc of Democratic senators to influence the closed-door negotiations of the Finance Committee, where the bulk of the bill is being written" (Budoff Brown, Politico, 5/21). 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.