Taxing Health Insurance Plans Gaining Favor
Politico: "White House officials are embracing a plan to tax 'gold-plated, Cadillac' insurance policies, giving momentum to an idea that is receiving bipartisan consideration on Capitol Hill.
'A premium charge on top of the most expensive packages is one of the ways to ensure that there's a lid on health-care costs,' a top administration official told POLITICO. 'The president believes this is an intriguing idea.'"
Politico did not name the official, but added. "A key argument for the plan is that the top few Goldman Sachs executives receive policies worth $40,000 each, the administration official said.
'We want to make sure the insurance companies know that there's a price associated with that,' the official said. 'That's one way you control health-care costs.' A top industry official responded that the plan is a tax on employee benefits in an indirect guise" (Allen, 7/26).
Kaiser Health News: "Scrambling for additional money to pay for a health care overhaul, Senate Democrats are eyeing the insurance industry for as much as $100 billion over 10 years. But the ideas they're exploring, including taxing companies that sell costly policies and imposing a 'windfall' tax on profits, all have drawbacks and could have unintended consequences.
'The biggest problem is at the end of the day, these taxes will be passed on to consumers in form of higher premiums, said Dan Mendelson, president of consulting firm Avalere Health in Washington."
"The debate over taxing insurers comes amid increasingly harsh rhetoric from Democratic lawmakers and the White House about insurance premiums and industry profits. They question whether the insurance industry, which is likely to gain millions of new customers from a health overhaul, has contributed enough to help pay for it. Insurers say they are doing their share by promising to stop rejecting applicants with medical conditions if health reform legislation also includes a requirement that almost every American carry insurance" (Appleby, 7/24).