To pay for the 10-year, $856 billion bill Baucus wants to tax high-value insurance plans, those worth $21,000 for a family and $8,000 for an individual. The Montana Democrat says those are “Cadillac plans’’ enjoyed by a small minority of Americans. Aides said about 10 percent of plans and 8 percent of taxpayers could be affected.
The tax, which President Obama embraced in his speech to Congress last week, is a major source of revenue for Baucus’s bill, bringing in an estimated $215 billion over 10 years. Baucus and other supporters of the measure say it would help drive down health care costs over the long term by encouraging companies to move toward less expensive health plans and workers to use less care.
But other Democratic senators fear that the tax would reach deep into middle-class pocketbooks, and labor unions are upset. Senators John F. Kerry of Massachusetts and Jay Rockefeller of West Virginia, members of the Finance Committee, say they want to limit the tax before signing off on the bill.
“We need to make it fairer to working people so that working folks don’t get dragged into this at a level where they just don’t have the incomes to support it,’’ Kerry told reporters after a closed-door committee meeting to discuss the bill.
Insurers and business groups also oppose the new tax and other fees in the bill, and the US Chamber of Commerce is wasting no time making its objections known.
The chamber announced it will begin airing a new TV ad today in more than a dozen states lambasting “Washington politicians’’ who “want new taxes on health care companies - taxes that will get passed on to you.’’
Democrats also raised other concerns yesterday, forecasting contentious debate when Baucus’s committee begins voting on the bill Tuesday and during later votes in the Senate.
Liberal lawmakers are concerned about the absence of a new government-run insurance plan. Instead of the so-called public plan, Baucus went with nonprofit cooperatives.
Although he failed in his monthslong quest to get Republican backing for his bill and now faces a host of Democratic concerns, Baucus defended his efforts yesterday.
