Obama leaves door open to tax on health benefits

Jun 29 2009

"President Barack Obama on Wednesday rejected the idea of fully taxing Americans' employer-provided health insurance benefits, but suggested he might be persuaded to tax so-called Cadillac coverage ... in the interest of a compromise with Congress," McClatchy/The Star-Telegram reports.

The President, speaking at a "town hall-style event" taped at the White House and aired on ABC News, "said he would prefer to pay for expanded coverage by eliminating some deductions for higher-earning taxpayers but that 'there's going to have to be some compromise." The President "said he understands Americans' trepidation about changing the system: 'They know that they're living with the devil, but the devil they know they think may be better than the devil they don't.' He said any reform would be phased in, not happen overnight" (Talev and Lightman, 6/24).

The Associated Press adds that Obama said he "didn't want to prejudge" the proposals in the Senate to tax expensive insurance policies. "Obama, who campaigned against the tax when he ran for president, drew a quick rebuff from organized labor." The President also "fielded a pointed personal question" during the event. "Dr. Orrin Devinsky, a neurologist at the New York University Langone Medical Center, challenged Obama: What if the president's wife and daughters got sick? Would Obama promise that they would get only the services allowed under a new government insurance plan he's proposing. Obama wouldn't bite. If 'it's my family member, if it's my wife, if it's my children, if it's my grandmother, I always want them to get the very best care,' Obama said" (Espo and Elliott, 6/24).

The Hill: "During nearly 90 minutes of questions and answers, Obama got just one question about covering the uninsured, underscoring the political reality that the key to Obama securing a victory on healthcare reform is to convince middle-class workers with health insurance the reform is needed and will benefit them. Obama returned time and again to his mantra: 'If you are happy with your plan and you are happy with your doctor, then we don't want you to have to change'" (Young, 6/25).

Politico: "On taxing health benefits, Obama sought to make a distinction between Sen. John McCain's campaign plan and the ideas now under consideration in Congress.

As the Republican nominee, McCain wanted to eliminate the tax-free status of health benefits and turn that money back to individuals in the form of tax credits. Obama lambasted McCain, accusing him of pushing the largest middle-class tax increase in American history. But the Senate Finance Committee is not looking at eliminating the deduction, but rather capping the benefits, Obama said. One proposal involves taxing benefits worth more than a certain amount, such as $13,000 or $17,000 for a family, Obama said."

"And for the second consecutive day, he gave a forceful defense of the need to create a government insurance plan to compete with private insurers. He challenged Republicans who say the public option will lead to a government takeover of health care and interfere with the doctor-patient relationship" (Brown, 6/25).

ABC summarized the special and followed up with a key Republican: "President Obama made a push Wednesday for evidence-based medicine and a reduction in health care costs in the United States, but skeptics and many Republicans remain unconvinced his plans will work ... 'We believe we should fix our problem in the health care system,' Rep. Paul Ryan, R-Wis., said on 'Good Morning America' today. Ryan said he believes Congress will meet the president's deadline of achieving reform by the end of the year, but added that the reform could move forward without Republican support.

'Unfortunately, it doesn't look like it will be bipartisan health care reform,' he said. 'Democrats have the votes, and they've told us they're not interested in sincere bipartisanship.'" (Tapper and Travers, 6/25)

Meanwhile, NPR reports that "In a poll looking at public attitude toward health care, pollster Stan Greenberg found something startling: The results were almost identical to a poll he conducted on the issue 15 years ago when he worked for the Clinton White House" (6/24).