KHN Morning Briefing

Summaries of health policy coverage from major news organizations

Proposed Tax Expansions Could Help Pay For Health Reform

Los Angeles Times: "Democratic congressional leaders are considering a new strategy to help finance their ambitious healthcare plan -- applying the Medicare payroll tax not just to wages but to capital gains, dividends and other forms of unearned income. The idea, discussed Wednesday in a marathon meeting at the White House, could placate labor leaders who bitterly oppose President Obama's plan to tax high-end insurance policies that cover many union members. It could also help shore up Medicare's shaky finances, and the burden of the new tax would fall primarily on affluent Americans, not the beleaguered middle class."

"But the concept also carries political risks: Many older Americans, one of the nation's most potent voting blocs, could see their tax bills rise because they often depend on savings and investment income in retirement" (Hook and Levey, 1/14).

The Philadelphia Inquirer, on another proposed tax, this one on high-cost insurance plans: "One key question is whether 'Cadillac' plans really provide luxe benefits. A study funded by the Commonwealth Fund, a nonprofit research organization, and conducted by the University of Chicago's National Opinion Research Center shows that premium price is more a function of the industry sector and the cost of medical care in a geographic area than the lush level of benefits. If a goal of the tax is to cut back on health costs, 'it's a blunt instrument,' said study author Jon Gabel of the research center. He said a tax might work, but more research is needed" (Von Bergen, 1/14).

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