White House open to new tax on health benefits

Source: The Washington Post

By PHILIP ELLIOTT
The Associated Press
Sunday, June 28, 2009; 5:00 PM

WASHINGTON -- The White House left open the possibility Sunday that President Barack Obama might pay for his health care overhaul by taxing employer-provided health insurance even though he had campaigned on not raising taxes on middle-class families.

White House adviser David Axelrod said the administration wouldn't rule out taxing some employees' benefits to fund a health care agenda that has yet to take final form. The move would be a compromise with fellow Democrats, who are pushing the proposal as a way to pay for the massive undertaking without ballooning the federal deficit.

"There are a number of formulations and we'll wait and see. The important thing at this point is to keep the process moving, to keep people at the table, to the keep the discussions going," Axelrod said. "We've gotten a long way down the road and we want to finish that journey."

But if Obama compromises on that point, it would reverse his promise not to raise taxes on those earning less than $250,000. "I pledge that under my plan, no one making less than $250,000 a year will see any type of tax increase," Obama told a crowd in Dover, N.H., last year. "Not income tax, not capital gains taxes, not any kind of tax."




Read more: http://www.washingtonpost.com/wp-dyn/content/article/2009/06/28/AR2009062800634.html

I think that the capitulating Dems are going to end up giving a big gift to the healthcare industry and big pharma on this one.

They found that $1-trillion for the elective war somewhere without raising my taxes. They should go to that same place to find the dough for the health care expansion.

Raise capital gains taxes to match the level of taxation in regular income tax. Increase taxes on the wealthy from 33% to 40%. Eliminate offshore tax shelters for corporations. Allow people to purchase US treasury bonds out of pre-tax income.

n/t

I wonder how many jobs will be lost with your scenario to add to the current 10 percent unemployment rate in America...

I say go after everyone that has a net worth of more then 1 million dollars sell off all their assets and take their money.....i.e., Actors, Sports figures, Politicians, Corporate CEO's etc use that money to fix EVERYTHING.... not just health care.

I think there is enough waste and mismanagement right in the DoD that no jobs would be lost. The money saved could employ people in other areas of the economy.

See here: http://www.globalissues.org/article/75/world-military-spending

We spend way too much on the defense budget.

If you Cut a program from Defense then you hundreds if not thousands of jobs both civilian sector jobs and Government jobs that were in place to support said program.... did you forget that the DOD is one of the largest employers in America.

I just don't think its time to CUT anything right now ... lets build jobs not cut any...

Should the government keep me employed if my job is to count blades of grass?

unemployment rate in America....

There is enough money out there for all of us to get a piece.

The Obama admin sure knows how to get these guys salivating. They're keeping their cards close to their chest and DC just can't stand it!

I'm already taxed on partner's benefits.One of the privileges of being married and Gay

When an actual bill is drafted, we can asses things at that time.

If you don't speak up now, it becomes written in stone. you don't wait for a bill to be drafted to begin dialogue - at that point, you're guaranteed to lose.

I think that Obama is not going to publicly box himself in.

This is not how the administration rolls.

you've done nothing to try and correct what you're complaining about (not 'you' specifically, just people in general).

I am glad someone understands the legislative process.

I remember that Candidate Obama lambasted McCain for wanting to tax health care cuts and for wanting to slash medicare, et cetera...

And I agree; ballooning the federal deficit is not a good thing.

I think there is a valid middle ground... but the more middle class-paying jobs people have also means that the tax base is increased by default and therefore taxes needn't go up either.

have you been paying attention lately? There are no jobs, there is no tax revenue to the government, there is no magic fix. Its way past time that the elites paid out.... top 1 percent pay 90 percent in tax and work your way down from there...

The government will be flush with cash and Oprah will actually lose some weight for good, maybe.

On edit....the worst possible outcome of Heath Care "Reform" would be no public option, tax on benefits, and mandatory health care purchase.

I wouldn't mind seeing an end to subsidies on healthcare for a person who makes over $250k a year.

If he wants to raise taxes that's fine.

Repeal the REAGAN tax cuts to pay for health care.

Massive cuts to Medicare and elimination of employer-funded health insurance are possibilities.

So we should be reducing taxes, not increasing them.

If the Obama administration cannot pull this off, and by "pull this off" I mean create a plan that everyone can take advantage of (not just the currently uninsured), he is doomed in the next election. If he increased the taxes on everyone who already has health insurance to pay for those who do not, he is doubly-doomed in the next election.

I am quite willing to pay for my insurance and someone else's insurance provided we all have access to the same program. What I'm NOT going to support is continuing to pay my private insurance company (and my rates just went up $83 a month) AND pay for other people's government health insurance.

It should be like unemployment insurance. Everyone who works pays in so that anyone who loses their job can get the benefit. If they made it so everyone who worked paid in but could not take advantage of it when they were unemployed, people would be pissed.

So it *better* cost less than what we have now, or there is going to be a riot come election time. If they set up a system where they simply tax everyone who already has insurance to pay for everyone who does not it is going to breed massive resentment, and the final message will be "this socialized health care stuff stinks!", just as Cenk said on The Young Turks.

Like, how can we capture the $$ currently going into health care (from employers, copays, etc.), find a way of distributing it to providers as they deliver services, and return the surpluses to the payers? The path from here to there looks very messy.

I have a special needs child, and the insurance that we pay out the ass for now doesn't cover it all. We can't keep paying $25K+ year on premiums, out of pockets, copays and every little thing they deny, and then get taxed on the insurance as well. We would literally be fucked, and forget trying to sell our home right now.

I think that's the question that I'm wondering about in this debate.

Are you paying 100% out of pocket right now?

And that's on a State plan as a retired state employee.

It's my understanding (and I could be wrong) that they're talking about taxing the portion that the employer pays - and only then if it exceeds the amount paid for an average premium. So people like you and I who pay 100% of our premium wouldn't be taxed. And if you're paying $25K+ out-of-pocket on premiums, I'm assuming you're paying the entire premium - holy shit that's high!

This taxing of health-care benefits is a terrible idea, IMO, but I don't think it would affect you (or me).

One more thing... you may know this already, but some states have health insurance premium payment assistance for families with a special needs family member who qualifies for Medicaid. They will help pay the premium so you will keep the Medicaid recipient on your private plan. So if your child is anywhere close to age 18 and will qualify for SSI/Medicaid, you might want to look into that.

people would be taxed on the value of their employers share of the insurance premium.

back when i was paying for private insurance out of wages that were all taxed, i thought it would be a good idea...

No tax will be that high. It would actually be cheaper to pay more taxes than to pay the premiums. Especially when one has a family and pays $1200 and more for insurance premiums. The whole point of universal health care is to have it paid through taxes. Just like having all the other benefits we get like police, firefighters, schools, infrastructure, etc.

If this tax was structured to only catch the additional benefits accorded to senior managers for their "Cadillac plans" then I can see some merit. Otherwise this sends too much of a tax and spend message and we know what the Republicans will do with that.

The gist of the president's proposal is this: Families that have health insurance would get a new federal tax deduction of $15,000, while single people would get one of $7,500.

At the same time, health insurance received through work would be considered taxable income, based on the cost of the policy.

A family with a deluxe, company-funded health plan costing more than $15,000 would lose out, since the tax on the benefit would be bigger than the tax cut for the $15,000 deduction.

A family with a policy costing less than $15,000 would win because the tax cut from the deduction would be bigger than the tax on the benefit.

The idea is to push people who don't have health coverage at work to buy it on the open market, thus becoming eligible for the deduction, which would offset the policy's cost.

If you were in the 15 percent tax bracket, you could save $2,250 with the deduction (0.15 x $15,000) -- but only if you got health insurance.

http://www.boston.com/business/globe/articles/2007/02/03/bushs_new_health_plan_not_that_promising_at_first_glance/

From $650 to $750 per month. Last year they went from 500 to 650. that is a 50 percent increase over 2 years.

Tax someone, but I need health insurance that doesn't take the majority of a paycheck to pay.

ripoff. $235.00 a month (all I can afford) with a 6k deductible and a 20% copay after that. I fell down a wet staircase in MA last weekend and sprained/ fractured an ankle. The campus security INSISTED that I take an ambulance to the hospital, which was way out of town. I have about 4,500.00 left to my name and I'm unemployed-and my "health insurance" won't do me much good here. The system is completely broken, but I don't know if our Dems have the backbone for fixing it.

I have no insurance and simply can't afford any kind of health care these days, so there is nothing there to tax me over.

Meanwhile, have you considered "catastrophic" insurance for yourself? It's not terribly expensive (about $500/yr for me). It kicks in if you have a serious injury or illness, and covers everything over $5,000. You can get it for any level you want.

:)

finally got to about $5000 a year for a policy with a $5000 or $7500 deductible and a large copay beyond that. I was paying over $10k+ a year before I saw any benefits at all. No free checkups, no free Pap smears, no cheap mammograms. It was insane.

I'm sorry to hear that, you're right, it's utterly insane.

I wish you good luck and very good health. :)

I think. Our percentage of uninsured has to be WAAAAAAYYYYY higher than the national average of what, 15%?

And yeah, I just cross my fingers. I AM covered by my worker's comp policy for in-the-job injuries. But those I mostly self-treat anyway, lol.

My job doesn't pay for my healthcare and my private plan goes up around 15%-20% each year, this time increasing to over $750 per month. 2 years ago it was around $500/month.

Not much I can do about the prices, since I need both doctor and prescription benefits, seeing as both my wife and I have chronic illnesses and there's no way I'm letting my 3 year old go without it. We're now considering raising our $500 deductible to $1000, but if we do, we will get about 70% of the maximum allowed and almost double the copay for Dr visits, along with almost every other number on the plan changing by at least 20% in their favor.

Did I mention they don't offer the $500 deductible plan anymore? Probably why they're raising the rates on it so much, since they want people to switch off of it.

They are going to tax healthcare benefits, to pay for healthcare benefits? So those who have insurance or health benefits will cough up more money in addition to premiums, co-pays, deductibles etc to pay for a health care option that they themselves could join and not be taxed on? Wouldn't people just opt for the government plan instead of being taxed for something that is already too expensive? Or am I missing something here?

Instead you're letting the big fucking insurance companies drive the story again.

When a mugger preys on the poor, sick, and weak it's called crime. When the insurance companies do it, it's called capitalism.

Something's fucked up here.

I would like to see your data on that.

is cheaper, easier for patients and dr's (paperwork), AND covers everyone. The only reason we don't have it is that our so-called "representatives" are owned by Insurance/Pharma. Do ten minutes of reading, no one should have to post the "data" on it again - it's been posted 100s of times, it's also been well-known for years and years.

You can't argue with the math.

The cost savings of eliminating the profit margin, the redundant administration of 1600 different companies paperwork would save 300 to 400 billion a year, enough to pay for the uncovered population and reduce rates for all. Physicians for a national health program have been using the 300 billion dollar figure.

But this isn't even a sure thing right now, so I'll wait to see what they come up with before deciding if it's good or not. This is all just talk right now, so I'm not getting upset about something that I suspect won't even happen in the end anyways.

He's already broken his promises.

...being taxed at the rates they were paying at the end of the Reagan Administration, that socialist bastard...

Just sayin'. But also, as others in this thread have noted, if the U.S. had a military budget half as large, it'd still be far more than any other country on the planet.

We seem to have a real penchant for tolerating mega-money parasites on the economy. Nay, not just 'tolerating' but encouraging.

Dem, repuke, doesn't matter, we get fucked with both ends of the stick.

those who are paying more for health care insurance will now have to pay taxes on that health care plan. I heard that those paying more have the "cadilac plan" so they will pay taxes. Those who i know who pay more do so becasue they are in a higher risk category not because they get more benefits. This is a really bad idea. Obama needs to just get rid of the insurance companies and use their profit to help cover health care. If everyone pays in something (sliding scale) then that also will help.

I may be taxed on my health care benefits even though each year my share keeps increasing? I already pay for medical, dental, prescription and vision. Vision and prescription used to be part of medical, now they are separate items.

If the tax increase also affects the employers, what incentive would they have to provide health care insurance to their employees????

:(

Taxing health care benefits after ridiculing McCain for proposing it during the campaign will destroy union support for this administration.

play his speeches in their ads from the election campaign last year where he promised to not raise taxes on those making under $250,000/yr. over & over & over & over again non-stop until election day 2012...

Taxing employer health benefits is political suicide....

from a commodity we absolutely have to have, back to humane care of our fellow man. We all act like health insurance is the question, when the question is why the hell do we have to pay this much for care?

I saw this new brabus mercedes yesterday on msn.com and it's suppose to be the fastest sedan on the market. It will go from 0 -60 in 4 seconds with a top speed in the 230 mph range, they didn't say anything about how much gas it will burn through. but hey when it cost around 500,000 dollars or something like that, who gives a crap about gas.

and because this is a family site I'm not going to give any examples of breast implants.

that's why we have to pay so much for care.

Those who don't have insurance are going to get screwed because they are going to be forced to buy insurance and those who have insurance are going to get screwed because they are going to get taxed on the benefit.


And the stupid part, they will call it "REFORM"


BULLSHIT

I gave a little bit of money to the DSCC and the DNC last year to help get more Democrats elected. Now they send me e-mails and letters all the time asking for more money. Taking a cue from the Change Congress campaign, I have started my own donor strike. Any time I get a solicitation, I send them a polite but pointed reply telling them how sorry I am I cannot send them any more money until they pass real health care reform. I don't know if it will make any difference but we got to put pressure on these twits every way we can.

a lot of people at DU slammed him for it, and rightly so. I thought the idea was to make health care more affordable. Taxing health benefits might do the opposite.

That alone would ensure that "the public option" fell on its ass. I have a great idea. Corporations pay 2.35% in taxes. Shouldn't they have to pay for our slave labor and the ones they have used up and tossed aside?
America is failing fast and we are going the way of the USSR. Greed and the complete lack (still) of regulations have caused it. It is going to get way ugly and the timid little shits and the loud blowhard idiots are going to have to get off their asses and do something. Before that transpires, we should retroactively tax the billionaires at 90% at least, and get our money back.

I can't hardly wait for the next broken promise.

The list is shorter, for one.

I should note that if I could afford to buy health insurance, it would be purchased with money I had paid taxes on. Some of us seem to get screwed coming and going.

Isn't there something just plain wrong about being taxed twice for something? I mean, if I still had health insurance through my work, I'd be paying income taxes, and then paying even more for a post tax benefit. This is going to hurt the dems bad.

was prssing and pressing on whether Obama would be open to a tax. Obviously, Axelrod did not want to say anything, one way or the other, that would box in Obama in any way. Axelrod's emphasis was on "wait and see" and keep the talks going. The WAPO story is highly deceptive in its presentation.

I would wait for something more than this before I either freaked out or did the happy dance.

I saw the Sunday Shows where he was pressed. The media is causing this panic, not Obama.

NT!

think we know that yet.