What is the best way for the House and Senate to compromise on divergent tax proposals in their health care reform bills without destroying their ability to control health care spending?
One idea under discussion is to accept the Senate tax on high-end "Cadillac" insurance plans (the House doesn't have it), but raise the threshold so that it would apply to higher premiums. A House provision to tax the wealthy could also remain in the legislation, but also with a higher threshold for who would be taxed.
The Senate's tax on high-end insurance plans would tax health plan premiums over $8,500 for individual coverage and $23,000 for family coverage. The tax, imposed on the insurer, would be 40 percent of the value of the plan that's over the threshold. The threshold amounts would be higher for some -- $1,350 higher for retired individuals over 55, employees in high-risk professions, and temporarily for the 17 states with the highest health care costs.
What is the best way to merge these proposals so that they remain effective cost-containment and revenue-raising measures? What is the appropriate threshold for these taxes?