That’s Why They’re Called Health Care Benefits

June 18, 2009

Contrary to the “wisdom” of certain legislators, taxing health care benefits is a counterproductive initiative that might just kill health care reform.

Over the last decade, health care premiums have risen 10 times faster than income. Keeping up with those expenses is already costing Americans an arm and a leg. Why would you want to make them even less affordable?

Nearly 160 million Americans get coverage through an employer, according to the Kaiser Family Foundation. That’s why they’re called benefits and that’s why taxing them will only place an additional burden on working families.

Sen. Chris Dodd (D-Conn.) recently spoke about the folly of such an initiative, pointing out how “taxing benefits at a time where people are already overwhelmed is, I think, a very bad idea.”

Others have floated a proposal to tax benefits above a certain level, affecting the so-called “gold-plated” health insurance plans. The problem is that many of these plans are expensive only because of regional cost differences and the composition of an employer’s risk pool. In other words, such a measure would disproportionally impact those who already can barely afford their plans as well as workers in high-cost areas.

There are far more equitable and fair alternatives to help provide quality, affordable health care for all. President Obama has already outlined savings for nearly $300 billion as well as proposed limiting itemized deductions for the country’s 3 million highest earners, measures that would help offset the costs of health care reform.

This is why he campaigned against taxing health care benefits. This is why health care benefits should be off limits.