Lobbyists, lawmakers debate wisdom of taxing health care benefits — MedCity morning read, May 21, 2009

WASHINGTON, D.C. — Lawmakers and lobbyists mobilized in Washington on Wednesday to nip in the bud a congressional proposal to tax employer-paid health care benefits, according to the New York Times.

Labor unions attacked a proposal by Senators Ron Wyden of Oregon and Max Baucus of Montana, both Democrats, to consider changing the tax treatment for employer-paid health care benefits, the Times said. Most workers under 65 years old still get their health benefits from their employers.

Under the proposal, employers would lose their income and payroll tax exemptions for amounts they pay for worker health benefits — workers would not be taxed on their benefits. Sen. Baucus and many economists say the employer tax exemptions are unfair because they goes mostly to rich people (employers).

The proposed tax was among about a dozen proposals considered by the Senate Finance Committee on Wednesday to pay for coverage of Americans who have no health insurance, the Times said.

On the other side of the aisle, Republicans on Wednesday mobilized against Democrats’ plans to overhaul the health care system, introducing legislation that would give Americans tax credits to pay for health insurance, according to the Wall Street Journal (subscription required).

The plan offers a glimpse at how the GOP might oppose Democrats’ efforts to create a public health plan and to require companies to pay for health insurance for workers. Republican lawmakers say such measures would add layers of bureaucracy to the nation’s health system and stifle job growth, the Journal said.

Given the Democrats’ control of Congress, the Republicans’ plan has little chance of success, according to the Journal.

More stories worth a read:

• NIH treads where drug industry rarely goes (Wall Street Journal Health blog)
• FDA tobacco regulation approved by Senate panel (Wall Street Journal; subscription required)
• Senator rebukes Medtronic over list of consultants (New York Times)
• Health-care fraud to be targeted: New task force will focus on costly waste and abuse (Washington Post)
• Group seeks sway over e-records system: Health association with ties to stimulus lobbying effort pursues an oversight role (Washington Post)
• HIV patients sue after records lost (Boston Globe)
• Medicaid health plans provide cost savings to states and high quality and value to beneficiaries, new analysis shows (PRNewswire)
• Reform talks dominate WellPoint meeting: CEO envisions a changing market, but activists say insurer is part of problem (Indianapolis Star)
• Boston Scientific begins clinical trial for next-generation nitinol stent to treat iliac artery disease (PRNewswire)
• Dartmouth biz plan competition elevates Novoculi, developer of non-invasive diabetes test (Xconomy | Boston)
• Medical school seeking a leader: NEOUCOM trustees hire search firm to find candidates for top job (Akron Beacon Journal)
• Cleveland Clinic confirms talks to buy Cleveland Play House site (Cleveland Plain Dealer)

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