Senators have second thoughts about taxing health benefits

"A Senate Democrat involved in negotiations on legislation to overhaul the health-care system said senators may be souring on a plan to tax some employer-provided health benefits," Dow Jones Newswires/The Wall Street Journal reports.

"Sen. Kent Conrad, D-N.D., said that public polls conducted over the July 4 congressional recess and reviewed by senators are causing lawmakers to have second thoughts about limiting the tax exclusion for employer health plans. 'It remains a significant option, but we're looking at other options,' Conrad told a group of reporters Tuesday. 'When you go out and ask people across the country, their initial reaction is, they don't like it.'"

"In discussions prior to the July 4 break, senators [on the Senate Finance Committee] had been leaning towards capping the tax exclusion for employer-provided insurance as a way to help pay for the costs of covering the uninsured, and also to help contain the growth of health-care costs. That plan would have taxed the value of health-care benefits that exceeded 110% of the benefit provided to federal employees, which would have affected plans worth more than $17,000 for a family of four." But Conrad said today that "The exclusion issue is especially difficult. … Given input from the polling and from our colleagues, any prudent person would say, OK, what are the alternatives?" (Vaughan, 7/7).