“The first place that we should look for savings is within health care itself," said Sen. Max Baucus (D-Mont.) during a Senate Finance Committee roundtable discussion with tax and healthcare policy experts and economists. "We should reform the healthcare delivery system to bring higher quality and greater efficiency to all Americans.” The purpose of the discussion was to explore the revenue and savings options that the committee will consider as it crafts a health reform bill.
Some of the experts discussed the controversial issue of funding reform by limiting the current tax treatment of healthcare benefits. One option is to cap the tax exclusion on the basis of an individual’s income or the value of the benefit. Currently, those with the most expensive insurance get the biggest tax break. They also discussed modifying the tax treatment of other health tax benefits like HSAs and FSAs. Although Baucus said he did not want to eliminate the tax exclusion for employer-provided health care, he added that the current exclusion is regressive and “it often leads people to buy more health coverage than they need.” Baucus said he wanted to find a way to make the tax exclusion fairer and more equitable.
