More than 150 million Americans get their health insurance through their employer. So, for many, the ongoing fight over the new health care law hasn’t been deeply personal. They haven’t had a “dog in the fight’ as the old saying goes. That is…..until now.
A recent headline in the Wall Street Journal read – “GOP Senators Weigh Taxing Employer-Health Plans.”
Senate Republicans set on reworking the Affordable Care Act are considering taxing employer-sponsored health insurance plans, a move that would meet stiff resistance from companies and potentially raise taxes on millions of people who get coverage on the job.
The move could raise billions in revenue that could be used to help stabilize the fragile individual insurance market. But it could be politically risky, since it could expand the impact of GOP health proposals from Medicaid recipients and those who buy insurance on their own to the roughly 177 million people who get coverage through their employers.
Fierce Healthcare explains it like this, “The vast majority of insured Americans get their coverage through an employer, with their insurance payments taken out before taxes. Economists argue that this raises premiums and encourages wasteful spending because employers have incentives to offer more generous plans. GOP members of Congress have long expressed an interest in limiting the exclusion, but it is a politically dangerous move….”
….any change to the tax break, which says that health insurance is not income for employees and therefore not subject to payroll taxes, would ignite opposition from major business groups.
A recent article on NPR.org (National Public Radio) pointed out, “Such a measure has occasionally been floated by Republicans since the days of President Ronald Reagan, often under the argument of leveling the field between employer plans and other coverage that the tax code treats far less generously.” Below is an excerpt from the NPR story.
A tax on health benefits would be a pay cut for its workers. Corporate payroll taxes would also rise if the value of worker health benefits counted toward required employer contributions to Social Security and Medicare.
Taxing medical benefits could spur employers to erode or drop those benefits and make workers less likely to accept them, said Larry Levitt, a senior vice president with the Kaiser Family Foundation. (Kaiser Health News is an editorially independent program of the foundation.)
We’d love to hear your thoughts on this potential proposal and what it might mean for the 177 million Americans who get through insurance in the workplace. Do you think it will bring people into the debate who haven’t been before? Do you believe it is something that should be considered if it raises billions of dollars? Generating meaningful conversations around key health issues is another way we are working toward our long-term goal of one day making Arizona the Healthiest State in the Nation!