September 25th, 2009
05:11 PM ET
5 years ago

House Democrats consider insurance tax to pay for health care bill

WASHINGTON (CNN) - House Democratic leaders are discussing adding a tax on insurers as a way to reduce the overall price tag of their health care bill.

House Speaker Nancy Pelosi, D-California, told reporters Friday that an excise tax on high end insurance plans, similar to the one included in the Senate Finance Committee, was "under consideration."

But Pelosi added that leaders are also looking at other proposals to offset the costs of the bill.

"We have to see how much money we need, and if we're taking the bill down in costs there are other provisions in the Senate bill that bend the curve that might be more palatable," she said. "We'll see."


House Democratic leaders and key committee chairmen huddled Friday trying to come up with a final version of the House health care bill. Much of the discussion centered on how to cut about $200 billion in costs from the bill. The Congressional Budget Office estimated that the House bill would cost $1.1 trillion over 10 years, but President Obama told Congress he wants a bill with a price tag of $900 billion.

The House Democrats' health care plan already includes a surtax on wealthy Americans. The graduated tax would apply to families making over $350,000 a year, with the rate increasing as income levels go up. But a number of freshmen Democrats argued the initial income level should be raised so that the tax doesn't unfairly burden small businesses. Leaders have now agreed to apply the surtax on those making more than $1million a year. But losing some revenue from the surtax is forcing Democratic leaders to look for other sources of funding.

Democratic leadership aides said if the House moves ahead with a tax on insurers, it would likely modify the Senate Finance Committee version because many Democrats are worried the Senate plan would hit middle class families.


Filed under: Health care • Nancy Pelosi
soundoff (91 Responses)
  1. Enough

    When did the Democrats ever meet a TAX they DIDN'T like? Enough of this taxing everyone in all these different directions. Time for a flat tax, just decide what percentage and everyone pays the same, no deductions or exemptions, and quit taxing utilities, gas, property, DMV, sales and everything else they tax. One tax for all.

    September 25, 2009 06:17 pm at 6:17 pm |
  2. annie s

    My premiums went up 30% this year, even though I developed no new illness and filed no claims at all last year. Tax 'em whatever you want. Then give us a public option so that those of us who are tired of being raped by the private insurers can kick them to the curb.

    September 25, 2009 06:19 pm at 6:19 pm |
  3. A Jaundiced Eye, Vestal, NY

    Crazy thing is, in this society, either you are getting screwed with ever higher taxes or saying you deserve more for free, just because.

    The entitlement society elects whomever promises to give away the most.

    When robbing Peter to pay Paul, you can always count on the support of Paul. {Winston Churchill}.

    September 25, 2009 06:19 pm at 6:19 pm |
  4. Johnny D

    Anyone who thinks that raising taxes on insurance companies is a good idea is a fool.

    Imposing goods/service providers (such as insurance companies) with higher taxes will ultimately get passed down to the consumer. Sorry folks, it's just a fact of life.

    During this whole health care disscusion of the past few months all I hear from proponents of a government plan is the word "affordable". Please someone, anyone, give me a numerical description of just exactly what "affordable" means. What may be affordable to some may not be for others.

    Am I happy with the current cost of my insurance premiums? No way

    Do I believe some measures need to be taken to reduce health care costs and realistic reform? Certainly

    But imposing higher taxes on insurance companies would be joke.

    September 25, 2009 06:21 pm at 6:21 pm |
  5. ran

    What happens when the insurance companies stops offering those plans?

    Single payer non-profit universal health care is the only true way to provide health care .

    September 25, 2009 06:27 pm at 6:27 pm |
  6. Carol

    Oh, so now we are also to be fined FOR having health insurance! And here I thought that having health insurance is what Obama wanted...? !?!

    I wonder which will be more - the fine FOR having health insurance or the fine for NOT having health insurance...?

    Prediction: When this proves to be too unpalatable they will decide to tax us more discreetly. They'll inflate the money supply and simply devalue/tax everything you have in savings. After all, didn't you know that you shouldn't have savings...? Bad! Bad! You should be spending wildly and stimulating the economy!

    September 25, 2009 06:29 pm at 6:29 pm |
  7. AL

    I have been following the Healthcare Reform on C-span and must say that I am very proud of the Democrats. They are handling the healthcare business for all americans. Further, they are NOT allowing the Republicans to get away with their stalling tactics; and believe me most of the Republicans are trying everything in the book to STOP this healthcare from being reformed. Thank God for Republican Snowe. Ms. Snowe is voting against the crazy stall tactics her colleagues are trying. Maine should be very proud of Ms. Snowe.

    Thank you Democrats. Now let's get the Public Option included.

    September 25, 2009 06:32 pm at 6:32 pm |
  8. paul

    the republicans are bye an large brought an payed for bye the private insurence companys if you people cant see that your more silly than a hoot owel . come on america wake up the gop wants you to pay more for health care . its so the insurence companys can make more profits from you the consumer . the private insurence companys then turn down 30% of your claima . please if your a dem or republican wake up please THE ONLY WAY TO CHEAPER HEALTH CARE IS THRIUGH A PUBLIC OPTION . ITS NOT A GOVT TAKE OVER AT ALL , AN BYE THE WAY THE PRIVATE INSURENCE COMPANYS HAS BEEN A TAKE OVER OF HEALTH CARE ., A TAKE OVER OF YOUR WALLET . to be fair i know some conservitive dems are also in the insurence industrys pockets . not as many bye far as the republicans though . lets take control of our health care back via the public option .around 60% support a public health option anyway ..the rest support the right for themselves to pay more an more to the private providers .at the end of the day my fellow americans its not about politics its about our wallets an access to good health care .

    September 25, 2009 06:34 pm at 6:34 pm |
  9. David

    - I got a bill for $350 dollars from my doctor that the insurance denied. I called and protested it and they eventually agreed to pay (I was shocked) – the amount they paid the doctor was $35. 35 DOLLARS! YET, that same doctor who agreed to be paid $35 for the consult wanted to charge me $350. Hmmm. This is one of the significant problems with the healthcare system.

    September 25, 2009 06:39 pm at 6:39 pm |
  10. Jeremy

    Did anyone watch the Senate markup last night? Republicans had two good amendments which the Dems turned down.

    1. Amendment to subsidize for private insurance those that qualify for medicaid and give people the option to choose coverage plans. Dems countered wanting medicaid to be the only plan for low income persons.

    2. Force every congressional member and their families to partake in medicaid with the understanding that the problems that medicaid recipients face will be corrected if those recipients include senators.

    Can't really say that Democrats are politicians for the people.

    Senator Menendez offered up a bill on child health insurance plans (from the insurance companies) that received unanimous support from Republicans. Sounds like obstructionism to me.

    September 25, 2009 06:47 pm at 6:47 pm |
  11. J.C. - Independent & Insured

    We have to realize the single purpose for a for-profit organization is for profit. IF the government tax private insurers' incomes, they will just increase premiums to maintain the expected profit. Basically, the government is indirectly taxing the American people, but private insurers are writing the checks for taxes.

    The Public Option is the only way for us to afford coverage for all Americans. The rich and the poor are already covered. Let the Middle Class have the Public Option, which will also reduce the number of poor people when they get a better paid job and are able to get out of Medicaid.

    September 25, 2009 06:50 pm at 6:50 pm |
  12. Puerto Ricans and US Virgins too

    Our sons die in war, we fly the US flag, we deserve parity in consideration for health care reform. Expect to see us in the Supreme Court if we are left out.

    September 25, 2009 06:50 pm at 6:50 pm |
  13. justobserve

    We can take away money from other wasteful spendings such congressmen and women pay more for their health premium so government will pay less, less Cadillac coverage for them too, no more Ex-Presidents' allowances (they make millions $ after leaving the WH), tax the superwealthy people as a way to return their loots to society,... Why on earth when it comes to do something for the middle class, Obama has to limit it to be self-sufficent? The costs of a public option may look big but it cover 50 millions people and who must pay into it themselves as well, the SAME WAYpeople who have insurance now: they pay only a few percentage and the society pays the rest for them. Why is the scheme for these uninsured people have to be self-sufficient? Why?

    September 25, 2009 06:55 pm at 6:55 pm |
  14. Ilpalazzo

    Tax the insurers, tax the insured, tax the companies, tax the auto makers, tax the food manufacturers, tax the food consumers, tax the auto consumers, tax this tax that, tax tax tax tax tax tax tax! Are they going to tax my little dog, too?

    September 25, 2009 06:56 pm at 6:56 pm |
  15. Willy Brown

    A Tax! There's a shocker coming from the democrats.

    September 25, 2009 06:56 pm at 6:56 pm |
  16. Boehnhead

    Does everyone know Israel, or more patly the right wing Begin and Netanyahu, inventnted terrorist bombings at the Hotel David killing 91 British? Who happened to save their "bacon" during ww2 and give them a home?

    September 25, 2009 06:57 pm at 6:57 pm |
  17. Carol

    Liberals and progressives have ALWAYS been free to create their own non-governmental single payer system. Together they have more than enough numbers and more than enough resources to create a insurance pool so vast that it should easily be able to take care of the poor.

    Seriously. The number of liberals in America is greater than the population of most of the countries whose health systems they admire - often many times over.

    If that is what they would like to do nobody will protest or try to stop them. So, no excuses! You don't need the government to do this and you don't need to tax Republicans.

    September 25, 2009 06:58 pm at 6:58 pm |
  18. malclave

    'Cause there's no way taxing the insurance company will prompt them to increase the price of the policies, right?

    I can't say I'm surprised at this from the Democrats, though. Didn't Obama say recently that companies take profits "off the top"?

    September 25, 2009 06:58 pm at 6:58 pm |
  19. Michele

    If they can end the scammers and the Medicare cheats (doctors, not patients) they can find the money to fund the whole program. Add in the waste in the Defense Dept., and the outdated weapons we are still making, and you find even more dollars.

    September 25, 2009 07:00 pm at 7:00 pm |
  20. fiscalfighter

    Poor, poor, poor Republicans... You have a hard time understanding economics. If the insurance companies are taxed and try to pass it on to the consumers, then smart consumers will choose a public option which is cheaper and more efficient, much like medicare. If on the other hand the insurance giants cut into their lavish executive salaries rather than slashing your benefits and raising your costs, they may just be able to survive.

    September 25, 2009 07:03 pm at 7:03 pm |
  21. Jim

    I endorse the concept of a progressive excise tax on high-end insurance coverage. Such plans can be treated as supplemental income to management employees, just like stock options, corporate life insurance and other perks. We should also consider a tax on unhealthy soft drinks, even though such a tax would be regressive (i.e. fall heavily on low income people). We need to balance the burden for all to achieve the goal of comprehensive reform.

    Society and businesses and individuals will benefit from comprehensive and mandatory health insurance – just as we all benefit from mandatory K-12 education for youth, mandatory auto insurance for drivers, mandatory workers' compensation insurance for employees, and Social Security for retirees.

    September 25, 2009 07:06 pm at 7:06 pm |
  22. JoeC

    Brilliant dems, Insurers will raise premiums faster to offset the taxes put on them. As Obama would say "what a bunch of special olympians." Tax, tax, tax,....... the party of no new ideas other than the old tax and spend habit.

    September 25, 2009 07:11 pm at 7:11 pm |
  23. John in WV

    They have the money to fight health care reform. They have the money to give their exec's 7 to 8 figures yearly. TAX'EM.

    September 25, 2009 07:15 pm at 7:15 pm |
  24. LacrosseMom(stuck in moderation)

    45, 000 Americans DIE every year they lack healthcare. its time that Congress does the moral thing, and offer ALL Americans a chance to have healthcare. And time to reform and hold accountable the crooks running the insurance companies!

    IF 45,000 Americans were dying each year from terrorist attacks, you can bet that the GOP would demand something be done! (like nuking the Middle-East)

    However, the GOP is silent about the .....45,000 Americans that die, because they do not have healthcare!

    September 25, 2009 07:19 pm at 7:19 pm |
  25. Pissed off AMERICAN

    The American People voted for CHANGE, They got IT.

    I'm a single mother of three and only makes about $30,000.00 a year, Also, I'm not on welfare , food stamps or gov't medical. I work a 40hr job with benefits. I'm proud to be a strong parent to show my kids it's okay to work for less money. With the change in Health Care, I'll be in jail and bankrupt from these idiots in office!

    Get ready for no Vaseline, because that's the way were heading if "WE THE PEOPLE" LET THEM.

    I can't wait for the next election!!!!!!!!!!!!!!!!

    I'm tired of it.

    September 25, 2009 07:19 pm at 7:19 pm |
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