September 25th, 2009
05:11 PM ET
11 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. Farrell in Houston

    The insurance companies raise our premiums whenever they want and they don't call it an insurance tax, they just say pay up or we'll drop you.

    September 25, 2009 05:13 pm at 5:13 pm |
  2. phoenix86

    Unbelievable how stupid Pelosi and the dems are. Do they think that a tax on any company will not be passed on to the consumer?

    An understanding of basic economics should be required for anyone becomeing a representative. Then perhaps we all could have avoided the disaster of the Pelosi / Obama / Reid administration.

    September 25, 2009 05:16 pm at 5:16 pm |
  3. KG, MN

    There is a tremendous difference between $350k and $1 million. Did know one consider somewhere in the middle such as $600k?

    September 25, 2009 05:19 pm at 5:19 pm |
  4. domincan mama is obama

    I think we should tax everyone at a flat rate of 60% so we can all be happy and cheerful! yayyy

    September 25, 2009 05:20 pm at 5:20 pm |
  5. keith in ky.

    Blah,Blah,Blah s.o.s. different day, do these people in congress really think that the we the citizens are really so stupid as to believe the insurance companys aren't going to pass this tax on down the line, I know there are some out there that belive them, but those people seem to have their heads in the sand and don't seem to be able to believe the facts, that the goverment can't run anything and save money, TAXED ENOUGH ALREADY!!!

    September 25, 2009 05:25 pm at 5:25 pm |
  6. An Independent Fed Up

    What about Democrats proposal to fine and send people to jail.......

    Sen. John Ensign (R-Nev.) received a handwritten note Thursday from Joint Committee on Taxation Chief of Staff Tom Barthold confirming the penalty for failing to pay the up to $1,900 fee for not buying health insurance.

    Violators could be charged with a misdemeanor and could face up to a year in jail or a $25,000 penalty, Barthold wrote on JCT letterhead. He signed it "Sincerely, Thomas A. Barthold."


    September 25, 2009 05:32 pm at 5:32 pm |
  7. Brian

    They need to pass a plan that mandates a certain level of coverage for a certain price, end of story. Then if the customers want to pay the extra for a Cadillac plan, they can do so at their own expense. But a basic plan for an affordable rate should be available for all Americans, end of story.

    September 25, 2009 05:33 pm at 5:33 pm |
  8. Proud Member..Party of No

    Does anybody remember President Pinoccio's repeated statements during the campaign that anyone who makes less than $250,000 will not see a tax increase?

    Furthermore, this whole Obama health care debacle gets worse everyday. They have no idea whatsoever what they are doing. What a bunch of incompetent losers.

    September 25, 2009 05:34 pm at 5:34 pm |
  9. sick of insurance industry

    I hope we tax the hell out of them!

    September 25, 2009 05:36 pm at 5:36 pm |
  10. John

    Which they insurers pass on to their policyholders. So basically the tax is on the taxpayers again. They can't even sugarcoat things well anymore.

    September 25, 2009 05:37 pm at 5:37 pm |
  11. BrianMEMPHIS

    As someone who earns less than $250k per year, I would demand that the BigO veto this legislation.

    I mean, didn't he say during his election speeches that if you make under $250k your taxes would not go up?

    September 25, 2009 05:38 pm at 5:38 pm |
  12. Objective Thinking

    The insurance model should be done away with entirely. After adjusting for inflation throughout the years, one can see that the costs of medical procedures went up the moment the insurance model was introduced into our society.

    Before insurance companies, doctors charged prices based on supply and demand. So in other words, they could only charge prices that people can actually afford. People didn't go without healthcare back then.

    When the insurance model was introduced, doctors raised their prices, knowing the insurance companies will just pay them, and then pass the cost on to the insured, where the insured pay for it through higher premiums. It is true that insurance companies often pay a price lower than what the doctors normally bill, but that's AFTER the doctor raised his prices. So the doctor raises his prices, and then lowers it a little bit for insurance companies.

    Overall, even after adjusting for inflation, doctors charge more now than they did before insurance companies were around.

    We shouldn't be competing within the bounds of the destructive insurance model. We need to do away with it and go back to the standard supply-and-demand model that naturally prevents doctors from being able to raise prices above what people can afford.

    September 25, 2009 05:39 pm at 5:39 pm |
  13. duke of omaha

    San Fran Freako's just put a tax on soda pop drinkers today, they don't want any fat nasty homo's in their gay parades. I'll be surprised if this makes it.

    September 25, 2009 05:43 pm at 5:43 pm |
  14. Four and The Door

    ...and the huge struggle to figure out how to pay for it is no indication that this is actually raising the cost of health care in America????? This is the greatest objection we have to ObamaCare. It raises the cost of health care in America and that is exactly the wrong answer.

    This would be very funny except it is first very sad. These are the brilliant experts Americans voted to run our government.

    September 25, 2009 05:46 pm at 5:46 pm |
  15. Robin

    Boy, didn't see that coming. NOT!

    September 25, 2009 05:47 pm at 5:47 pm |
  16. ccc

    Dems are going crazy with this tax but we need it

    September 25, 2009 05:49 pm at 5:49 pm |
  17. Lil Jimmy

    A tax on any business is always passed onto the consumer. This is just a way for politicians to say " we didn't raise taxes on the working man". More spineless leadership. If you are going to tax us, just do it and own up to it. If in return we get quality, affordable healthcare most people won't complain. On the other hand, by not owning up to it and hiding it only confirms that this is a bad healthcare plan being pushed through. This way they can blame " big business" for any problems.

    September 25, 2009 05:50 pm at 5:50 pm |
  18. Daniel Smith

    Its a proposed tax on so called Cadillac Insurance Plans, the ones that only wealthy people can afford. This doesn't stray from the statement about not taxing those making less than $250K per year genious!

    "As someone who earns less than $250k per year, I would demand that the BigO veto this legislation.

    I mean, didn't he say during his election speeches that if you make under $250k your taxes would not go up?"

    September 25, 2009 05:53 pm at 5:53 pm |
  19. m jeff

    Why not tax the insurance companies, they are going to rob you regardless. They sent me a letter saying they will raise my premiums, the reason was almost laughable.

    September 25, 2009 05:54 pm at 5:54 pm |
  20. Mac

    "The graduated tax would apply to families making over $350,000 a year."

    They suddenly realized that this would include alot of congress members so they raised the lower limit to a million instead.

    September 25, 2009 05:57 pm at 5:57 pm |
  21. Reformed Republican

    Paying for health insurance reform with a strong public option is rather simple. Here's the deal:

    1. Tax all employer paid health insurance premiums OVER $10,000 as regular income. Premiums paid by employers are income, stop denying it...
    2. Tax high sugar soft drinks, fruit juices and milk shakes at 5-cents per. These calorie rich drinks are as bad as cigarettes – just look at our growing population of obese adults and kids for proof of that. If we can tax smokes, liquor and gambling we can certainly tax fat-inducing drinks...
    3. Stop subsidizing the medical device industry – Tax their products like anything else – their stuff ain't a gift to humanity, it's a money making device for sick, infirmed and handicapped folks...

    This will never happen of course, it's to simple, straight forward and the rethuglicons will just say "NO!"

    September 25, 2009 05:59 pm at 5:59 pm |
  22. Jon-In-CA

    Ahhh... so the truth comes out.... EVERY plan offered by dems includes TAXING either individuals or insurance companies.

    Dems are completely INCOMPETENT!

    September 25, 2009 06:04 pm at 6:04 pm |
  23. Enough

    What a surprise, the Democrats ONLY solution is to TAX, TAX and TAX some more . What's wrong with those needing insurance, paying for their own premiums? Democrats work on reforming INSURANCE companies by making insurance available and affordable for those who want it to PURCHASE it. Get out of the lawyers bed and work on reducing Malpractice. Democrats just stay the hell out the insurance business, everything you take over is lousy and bankrupt.

    September 25, 2009 06:07 pm at 6:07 pm |

    Once again, the Democrates RAISE taxes.

    September 25, 2009 06:11 pm at 6:11 pm |
  25. CRob

    These people cant seriously be this dumb. This doesnt lower costs. All it does is shift costs. Lets elect an entirely new government.

    September 25, 2009 06:16 pm at 6:16 pm |
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