Kerry proposes tax on insurance companies

[ProSense]

JUDY WOODRUFF: So just, quickly, back to my question, though. If you could just answer: What do you think is the method of paying for what's over and above the savings that has the best shot of passing?

SEN. CHRIS DODD: Well, I think what Senator John Kerry has recommended today, you've mentioned it at the outset of the program. It's the subject of conversations in the Finance Committee, has some real possibilities.

Sharing that cost in ways that the industry itself could help pick up. It seems to me that, plus the savings that Doug Elmendorf mentioned, by the way, in the Budget Committee. When Sheldon Whitehouse raised the issue about savings, he acknowledged that that could help reduce these costs substantially. Don't discount that point.

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As an alternative, Senator John Kerry, Democrat of Massachusetts, proposed an excise tax on insurance companies that offer coverage far exceeding the value of the average policy, now about $13,000 a year for a family.

Mr. Kerry contends that such a tax would put pressure on insurers to reduce the cost of their health plans, lower premiums and reduce the overall cost of health care.

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On Monday, Obama met with Douglas Elmendorf, director of the Congressional Budget Office, and a handful of economists to "make sure we had exhausted all the possibilities that could help on the long-term deficit picture," Orszag said. Elmendorf delivered a serious blow last week to the House effort, along with a separate Senate health committee bill, when he testified that the measures could raise long-term health costs.

Orszag also said the White House is open to a proposal by Sen. John F. Kerry (D-Mass.), a Finance Committee member, to tax insurers for very generous health policies. The idea is a variation on a provision that Baucus, Grassley and others on the committee had pushed: to tax beneficiaries who receive generous policies through their employers.

Obama staunchly opposed taxing beneficiaries as a candidate, and on Monday he threatened to veto a bill that targets individuals. But Orszag said the White House was open to the Kerry alternative, noting a fee on high-value policies would "create an incentive for companies to create more efficient plans."

A senior House leadership aide said Democratic lawmakers there were keenly interested in the Kerry provision, along with other revenue measures with consensus support in the Finance Committee, to replace the wealth surtax that Baucus and others have already declared dead on arrival. "Our guys want to see some movement there," the aide said. "They're loath to vote on a tax increase if it is not going anywhere in the Senate."

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[Raven]

1. Have I missed how they are going to keep the Insurance Companies

from passing that tax right through to us?

[laugle]

2. Bingo! My

sentiments exactly. I'm so sick of them thinking we are a bunch of idiots!!!

From what I hear MA health care reform is not doing very well..........

[ProSense]

3. Yes, that's going to be the insurance companies and RW argument

The plans have a set price for coverage and will limit benefits from going through the roof.

Now we can wait for more details.

Tax the insurance companies...sounds like a good idea to me.

[SeattleGirl]

5. My exact thought too.

"They" wouldn't be paying one additional dime. WE would.

[karynnj]

6. Only the difference between the average cost and the price of the policy will be taxed

The problem is that they need to find some way to raise the money to pay for this. Here is a NYT article, not Kerry related, that speaks of the difficulty of finding a way to pay for the costs of insuring those who did not have insurance. http://www.nytimes.com/2009/07/22/business/economy/22leonhardt.html?hp

[ProSense]

7. This debate is taking a turn for the better.

Time for every critic to put his/her money where his/her mouth is. Health care costs money. There is enough of it in the system to provide affordable health care for all Americans. Who's going to pay?

Are we going to protect insurance company profits or provide affordable coverage for all?

[invictus]

8. Exactly!

[saltpoint]

4. John Kerry is a titan.

Anybody says different better lock their house tonight.

[anonymous171]

9. Good idea. We need to take away their money. That way they cannot bribe our politicians.