Health Care Tax Policy: A Rare Opportunity for Bipartisan Cooperation

Greg D'Angelo / March 12, 2009

Today The Washington Post reported that President Obama’s budget proposal to “tax the rich” to pay for health care, including reduced deductions for charitable donations, is “facing deep skepticism on Capitol Hill”. According to the Post, as an alternative, top lawmakers are pondering a change to the federal tax treatment of health insurance—a relic of the WWII era—as an alternative way to financing health reform.

If there is one item where there is a powerful consensus among serious health policy analysts, conservative and liberal alike, it is the need to change the existing tax treatment of health insurance. It distorts the health insurance markets, undercuts consumer choice and competition and fuels higher health care costs. For two decades, the Heritage Foundation has been at the forefront in championing such reform. Tax reform should be the number one component of any major health reform worthy of the name. Without such reform, there would be no serious reform of the insurance markets or health care financing, just more of the same. (more…)