An Excise Tax on Insurers Offering High-Cost Plans Can Help Pay for Health Reform — Center on Budget and Policy Priorities

By Paul N. Van de Water The federal government provides substantial tax subsidies for health insurance, especially for high-cost insurance plans for people with high incomes. The Senate Finance Committee is considering placing an excise tax on insurance companies that offer very high-cost health insurance plans. This proposal would help achieve two important objectives: * It would provide a significant source of funding for subsidies to enable families of modest means to afford health insurance, thereby making the overall system of federal subsidies for health insurance more equitable. * It would contribute to slowing the rate of growth of health insurance and health care costs. As a result, the proposal merits serious consideration. Read More