The Senate Finance Committee May 18 released a 41-page list of policy options for funding comprehensive reform of America’s health care system, many of which have already prompted criticism from affected industries and their respective associations.
The options on the table are wide-ranging, and include potential savings achieved from within the health care system, modifications of current health care tax expenditures, and non-health-related tax provisions proposed by the Obama administration in its FY10 budget proposals.
Senate Finance Committee Chairman Max Baucus (D-MT) has said he would prefer to pay for reform by finding money within the health care system, but he included the non-health-related options proposed by the White House “in deference to the president.” Among the biggest potential financing options is a proposal to cap the exclusion for employer-provided health insurance, valued at $133 billion in 2008 alone. Options include capping the exclusion based on the value of the health insurance policy or an employee’s income level, or converting the entire employer-provided exclusion to an individual tax deduction or credit.
Other proposals would modify the tax treatment of Health Savings Accounts (HSAs) and modify or eliminate Flexible Spending Accounts (FSAs); modify or eliminate the itemized deduction for medical expenditures; and change the rules applying to tax-exempt hospitals to require them to maintain a minimum level of charitable activity, limit charges to the uninsured, and limit aggressive collection actions.
Another revenue-raising option that has already attracted attention is a proposed tax increase on alcoholic beverages and sugar-sweetened beverages. Baucus will convene a Finance Committee meeting on May 20 to walk through the various policy options. The committee is accepting public comments on the various financing options until May 26, and comments can be sent to Health_Reform@finance-dem.senate.gov. To download a copy of the committee’s policy options for financing health reform, click here.
