Daily Video

August 4, 2009

Congress Weighs New Tax on Health Benefits

In an effort to find new ways to fund health care form, Congress is considering taxing the most expensive employer-provided health plans, sometimes called “Cadillac” plans.

Currently, people who receive health insurance through their employer pay no tax on their benefits, but some members of Congress want to place taxes on plans that cost above a certain amount.

House Speaker Nancy Pelosi (D – California) told the NewsHour that she would consider such a plan so long as it would not affect the income of middle class families.

In this video, NewsHour correspondent Judy Woodruff looks at the new developments in the health care reform effort and talks to experts about the new proposal to tax benefits.


“I said during the campaign, when this was raised by John McCain, he had proposed to eliminate completely the exclusion on the taxation of health benefits. I had said that this would be the wrong way to go because it would be too disruptive. What’s being talked about now, I understand, is the possibility of penalizing insurance companies who are offering super gold-plated Cadillac plans.” – President Barack Obama

“Many plans cost a lot of money because the group that’s being insured is an older group on average, uses a lot more health care on average, because they may be sicker than the typical person, so they would be taxed, as well.” – Paul Fronstin, Employee Benefit Research Institute

“I think it’s a terrific idea. I think the way to look at it is to think about what you’re doing with the money. You’re using the money to provide universal coverage. So the question you have to ask is, are you willing to take away a tax break to the 10 percent of Americans with the most expensive health insurance plans to provide the financing that allows 47 million uninsured to get some coverage? It seems like that’s the kind of trade-off we should be able to make as a society.” – Jonathan Gruber, Massachussetts Institute of Technology

Warm Up Questions

1. When you get sick, where do you go?

2. What is health insurance? How does it work?

3. What is preventative medicine? Why is it important?

Discussion Questions

1. How could not having health insurance or adequate health insurance affect someone’s life if they get sick? How could it affect their family?

2. Do you think that it is a fundamental right to have health insurance? Why or why not?

3. Why do you think so many other countries have universal coverage and the United States does not?

4. Jonathan Gruber of MIT believes that 10 percent of Americans with expensive health care plans should help pay for health care for the millions of Americans who are uninsured. Do you agree? Why or why not?

Additional Resources

Read the transcript

In-depth Coverage: Rx for Reform

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