Taxing Employees Who Receive Health Insurance

The health care policy debate rages within the Washington, DC Beltway. Recently, President Obama's first nominee for Secretary of Health and Human Welfare, Tom Daschele, along with Obama's head of his transition, John Podesta (both whose wives as well as themselves are highly paid lobbyists...remember, the reason Daschele withdrew is because he neglected to pay tax on the limos he rode around in while he was lobbying) have announced that they believe employer provided health care plans should be taxed as income to the recipients. That means if you have a benefit at work, a health care plan, you will pay income tax for the benefit.

Remember, John McCain believed that if there was health care reform, this would have to be instituted in order to pay for the reforms and candidate Obama rejected the idea. But here it is, several months later, and two of his closest advisors are advocating for the tax.

Which seems like a great idea, but...

Medicare is taxed as income, why not employer provided plans?

However, if the idea is to get people insured, to get them using preventative medicine, like annual check-ups, mammograms, and vaccines, then what will a tax do to that policy goal? Won't many people, particularly those who we want insured, opt out? And aren't we in a depression (oops, sorry) where every single nickel and dime matters to working folks?

I think it is going to be harder and harder to keep our eyes on what is happening during this policy debate. But I also believe if we leave it to the swanky operatives, the same folks who live inside the DC bubble, we might all wake up one morning with a bad headache.