Senators ponder varied tax increases, including non-profit hospital tax

Obviously, if we're going to lay out billions--if not trillions--to reform the U.S. health system, we'll have to pay for it somehow. The problem is, funding health reforms almost certainly means raising taxes or eliminating tax deductions. Neither of these moves will be popular, but some may be hugely controversial.

Among the proposals floating around the Hill include taxing health benefits, cutting back tax advantages for health savings accounts, lowering the amount employees can contribute to flexible spending accounts and cutting back the itemized tax deduction for medical expenses. These alone are likely to create some tension, as any of them would take benefits away from consumers on the still-unproven promise that reform would make up for them somehow.

More contentious, meanwhile, are proposals that would lower or even eliminate special tax deductions for non-profit Blue plans, or in what could be the hottest battle of all, impose an excise tax on non-profit hospitals that don't meet minimum levels of charitable activity, that don't limit charges to the uninsured and indigent or that engage in collections actions seen as too aggressive. You can be sure that the AHA would send out a veritable army of lobbyists to resist the latter.

Senators are also considering raising taxes on alcoholic and sugar-sweetened beverages--so-called "sin taxes"--that may sound better to many members of the public. Of course, these industries have lobbyists too, so nothing will come easy here.

To learn more about health reform funding:
- read this Wall Street Journal item

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