Obama Pushes for Excise Tax on Expensive Insurance

As negotiations continue to arrive at a final version of the long-debated health care legislation, President Barack Obama has told House Democratic leaders a tax on high-priced insurance policies, part of the Senate version of the bill, should be included in the final product.

In the Senate version of the bill, a 40 percent excise tax would be levied on individual insurance policies above $8,500 and on family policies above $23,000. Policies for retirees and employees in high-risk occupations, like law enforcement officers, would carry a higher threshold.

The tax would raise approximately $149 billion over the next decade, helping to offset the cost of the legislation currently under consideration. The Senate version of the bill would cost $871 billion over ten years, with the House version coming in at $1.1 trillion.

After a meeting with Congressional leaders, Speaker of the House Nancy Pelosi said, “We have had a very intense couple of days with meetings in our leadership, meetings with our staff. After our leadership meeting this morning, our staff engaged with the Senate and the administration’s staff to review the legislation, suggest legislative language. I think we’re very close to reconciliation.”

Neither the House nor the Senate has much room in negotiations as the two versions of the bill passed narrowly and by party lines. The House approved its bill by a vote of 220 to 215, with the Senate’s passing 60 to 39. Much of the difference in the legislative packages focuses on paying for the reform and both rely on large reductions to stem the growth of government spending on Medicare.

President Obama, has, for the most part, tried to avoid taking a public position in the dispute between the two chambers, but has been criticized for failing to give the necessary guidance in the hotly debated effort to finally enact national health care reform.