HealthLawProf Blog

Editor: Katharine Van Tassel
Concordia University School of Law

Monday, June 15, 2009

Taxing Health Benefits ...

Over the weekend, there was some discussion of whether taxing employer-provided health benefits should be considered but that idea does not seem to be terribly popular. The Associated Press reports,

Lawmakers and administration officials on Sunday distanced themselves from the idea of taxing health benefits to help pay President Barack Obama's health care overhaul and bickered over whether government insurance would strengthen the market.

The debate over a government insurance plan has broken mainly along party lines. But Democrats and Republicans appearing on Sunday's TV news programs either rejected or offered no support for raising revenues on some people through a tax on health benefits. Obama has not supported the idea, but has said it should be considered along with other proposals.

Vice President Joe Biden said that administration doesn't want to tax health care benefits even though the proposal should be on the table. Sen. Chris Dodd, D-Conn., called taxing health benefits a "bad idea" as well as unnecessary.The Senate Finance Committee is expected to consider a tax on workers whose family health coverage costs $15,000 a year or more in premiums paid by employer and employee combined. .  .  .

Republicans are reluctant to use the government to drastically change the health care system. Senate Republican leader Mitch McConnell of Kentucky said lawmakers should focus on making the existing health care system work better and predicted that Obama's plan would result in massive government controls."We know that if the government gets in this business, pretty soon nobody else will be in the business," McConnell said.

Bills in the House and Senate would require people to purchase health insurance if they could afford it, a proposal that Sen. Chuck Grassley, R-Iowa, said is more likely to draw bipartisan congressional support than mandating coverage through employers.

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