Senators Have Second Thoughts About Taxing Health Benefits
"A Senate Democrat involved in negotiations on legislation to overhaul the health-care system said senators may be souring on a plan to tax some employer-provided health benefits," Dow Jones Newswires/The Wall Street Journal reports. "Sen. Kent Conrad, D-N.D., said that public polls conducted over the July 4 congressional recess and reviewed by senators are causing lawmakers to have second thoughts about limiting the tax exclusion for employer health plans. 'It remains a significant option, but we're looking at other options,' Conrad told a group of reporters Tuesday. 'When you go out and ask people across the country, their initial reaction is, they don't like it.'"
"In discussions prior to the July 4 break, senators [on the Senate Finance Committee] had been leaning towards capping the tax exclusion for employer-provided insurance as a way to help pay for the costs of covering the uninsured, and also to help contain the growth of health-care costs. That plan would have taxed the value of health-care benefits that exceeded 110% of the benefit provided to federal employees, which would have affected plans worth more than $17,000 for a family of four." But Conrad said today that "The exclusion issue is especially difficult. Given input from the polling and from our colleagues, any prudent person would say, OK, what are the alternatives?" (Vaughan, 7/7).