Interest Groups Campaign Against Proposed Health Taxes

Main Category: Health Insurance / Medical Insurance
Also Included In: Medical Devices / Diagnostics;  Public Health;  Medicare / Medicaid / SCHIP
Article Date: 15 Oct 2009 - 7:00 PDT

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Interest groups are fighting some of the new taxes proposed in the Senate Finance bill.

"Insurance companies, unions, medical device makers and others in the health care industry are furiously lobbying lawmakers to shift burdens onto someone else - anyone else - before they find themselves saddled with billions of dollars in taxes under new health care legislation," The Associated Press reports. "Their gain would be another industry's loss, of course, unless the entire overhaul effort collapses and Congress fails to agree on how to pay to provide health coverage for millions of uninsured Americans." Some lawmakers are concerned that the bill is already "a delicate balance of opposing forces."

But it's not smooth sailing yet, as "key industry groups are scrambling to avoid being a target." Union groups plan to run an ad opposing the bill because of a tax on "Cadillac" insurance plans. Insurers also launched "a TV ad campaign in six states accusing Democrats of seeking to cut $100 billion from subsidies for Medicare Advantage, under which private insurance companies provide Medicare benefits" (Babington, 10/14).

The Wall Street Journal answers question about how the Senate Finance Committee bill affects taxes: "A levy on employer health plans with annual premiums of more than $8,000 for an individual or $21,000 for a family. It would be levied on insurers and is set at 40% of the amount above the thresholds. The cutoffs are higher for retirees older than 55, some high-cost states and certain high-risk professions, such as firefighters. For plans above the threshold, 'all or almost all' of the tax would likely be passed to employees in some form, says Len Burman, a Syracuse University public-affairs professor" (Mathews, 10/14).

Kaiser Health News in collaboration with USA Today reports on concerns from the orthopedic device industry about the Senate Finance proposal that would levy $40 billion in new taxes in the next decade. "Device makers say such a tax would stifle job growth and innovation, adding to unemployment in regions such as Warsaw [Indiana]. But the health overhaul proposals could also bring benefits to the area, including helping provide subsidies so unemployed workers… could purchase health insurance" (Appleby, 10/14).

The Washington Post reports that on Tuesday, medical device workers and executives at a Washington D.C. conference "warned that the tax would harm their ability to innovate… Mark B. Leahey, president and chief executive of the Washington-based Medical Device Manufacturers Association, said many companies could go under if the proposed tax is enacted. 'This is not an industry like the pharmaceutical industry,' where innovation often comes from deep-pocketed conglomerates, Leahey said. 'The real research and development in this industry comes from small players who are just struggling to get by'" (Musgrove, 10/14).

NPR reports on the idea of taxing soda to help fight obesity and potentially help pay for a health care overhaul. "Public health advocates say drinking soda is directly linked to obesity, which is partly responsible for skyrocketing health care costs." But American Beverage Association spokesman Kevin Keane "says he doesn't believe taxing soda and other sugar-sweetened beverages like sports and energy drinks and juices will eliminate obesity. Instead, he says, people should take more responsibility for their health. And he adds that a new tax could hurt a lot of people" (Weiss, 10/14).

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.

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