White House Remains Open To Taxing Health Benefits, Obama Plans Town Hall Meeting

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The White House remains open to taxing some health benefits to help pay for health care reform despite campaigning against the move last year, The Washington Post reports.

Yesterday, Obama Senior Adviser David Axelrod "declined to rule out the possibility that the White House would agree to a tax hike on health insurance plans that would hit middle-income Americans." He "also repeated Obama's preference for a cap on the deductions that people making over $250,000 can take on their taxes as a way to pay for health-care changes. But under repeated questioning from host George Stephanopoulos, Axelrod said the White House is open to 'a lot of different formulations' for paying for health-care reform" (Shear, 6/29).

Obama campaigned against raising taxes on Americans making less than $250,000 per year last year in his presidential race with Sen. John McCain, R-Ariz., The Associated Press reports.

"Under the current proposals, a tax on health benefits would affect only those with pricey health plans. The idea would be to tax as income the portion of health benefits worth more than a specified limit. Officials are considering several options, including one that would set the limit at $17,240 for family coverage and $6,800 for individuals."

Meanwhile, "Sen. Chuck Grassley, R-Iowa, said that Obama should step in an oppose the tax if he's truly against it. Otherwise, he faces a loss to his own Democratic Party and his own campaign credibility. 'I think it's going to take presidential leadership to get people of his party to see that we shouldn't be subsidizing high-end health insurance policies that drive up inflation in health insurance,' said Grassley, the top Republican on the powerful finance committee" (Elliot, 6/28).

But administration officials are working behind the scenes on the idea, including the Secretary of Health and Human Services Kathleen Sebelius, UPI reports: Sebelius said that "Obama would prefer not to resort to that measure but it is 'open to discussion.'" Sebelius also said Obama would prefer to cap itemized deductions to help pay for reform to save $330 billion over 10 years for reform (6/28).

Politico: "White House senior adviser David Axelrod says President Barack Obama would like to have a public option - or government-run insurance plan - as part of a health reform package, but will not insist on it. 'We've not gotten as far as we've gotten by drawing bright lines in the sand,' Axelrod said on NBC's Meet the Press. 'He's going to fight hard for that.'" Later on Meet the Press, Republican strategist Mike Murphy called that "a huge concession." (Allen and Siegel, 6/28).

In the meantime, Obama plans another "town hall" meeting for Wednesday in Annadale, Va., Roll Call reports. "The session will include a live audience and feature questions from social-networking sites like Facebook, YouTube and Twitter" (Koffler, 6/28).

In a separate article, Politico reports on Obama's announcement of the meeting, quoting Obama: "'Ultimately, your engagement on this issue is just as important as that of our lawmakers. I've always believed that real change doesn't come from Washington, it comes from the American people - and we won't be able to reform without you. So America, tell me what you want to know about health care reform and I'll do my best to answer your questions. I look forward to hearing from you'" (6/28).

This information was reprinted from kaiserhealthnews.org with kind permission from the Henry J. Kaiser Family Foundation. You can view the entire Kaiser Daily Health Policy Report, search the archives and sign up for email delivery at kaiserhealthnews.org.

© Henry J. Kaiser Family Foundation. All rights reserved.