Senators (up for re-election in 2010) oppose taxing employer health benefits to pay for reform — MedCity Morning Read, July 9, 2009

WASHINGTON, D.C. — Several Democratic senators who are up for re-election in 2010, including Sen. Harry Reid of Nevada, are opposing a tax on generous employer-paid health care benefits because it is generally unpopular with voters, according to the New York Times.

The opposition to taxing employer-paid health benefits — which is popular among Republicans and centrist Democrats — is dividing Democratic leaders who are trying to reform the nation’s health care system and figure out how to pay for that reform, the Times said.

President Barack Obama doesn’t want to tax employer-sponsored health insurance. Such a tax could affect a broad swathe of Americans, and Obama said during his presidentential campaign that he didn’t want to raise taxes on middle-class families.

Nonetheless, some senators have grasped at the tax straw as one of the few ways they can find to pay the massive health care overhaul bill, which now ranges between $600 billion and $1 trillion over 10 years, but was estimated as high as $1.6 trillion a month ago.

Sen. Max Baucus of Montana, chairman of the Senate Finance Committee, which is taking a lead in reforming health care, had accepted the idea of taxing health benefits as a compromise with Republicans, the Times said. But Baucus is being urged by fellow Democrats to abandon that plan because it is politically unpopular.

“Working people in many cases have given up raises in pay and instead have gotten health benefits,” Sen. Barbara Boxer, a California Democrat who is up for re-election next year, told the Times. “So it seems unfair to now tax their benefits.”

On Tuesday, a senior analyst in the Congressional Budget Office told the Senate Health, Education, Labor and Pensions Committee that its a version of reform legislation could push millions of people out of their employer-sponsored health plans because it would give employers a cheaper option — pay a fee rather than insurance premiums, according to the Washington Examiner.

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