Healthy tax

7 January 2010 By James Pethokoukis

To the dismay of deficit worriers, U.S. healthcare reform has shifted focus from reducing costs to expanding insurance coverage. So the new White House push to tax pricey health plans is welcome. Though more needs to be done, this is the best costcontainment idea out there.

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At a Jan. 6 White House meeting with House Speaker Nancy Pelosi and other House Democratic leaders, President Barack Obama urged the lower chamber to include a tax on highpriced health insurance policies, a key financing feature in the bill passed by the Senate. The Senate proposal would impose a 40 percent tax assessment on the cost of individual insurance policies above $8,500 and on family policies above $23,000.

The tax would raise $149 billion over 10 years, revenue used to offset the cost of expanding healthcare coverage. The bill that originally passed the House, by contrast, relies on a 5.4 percent surtax on millionaires to finance the bill.

Senate and House Democratic leaders, the chairmen of the five congressional committees that wrote the legislation and top White House officials are negotiating the final version of the healthcare reform bill.

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