A Republican and a House Democrat who led the opposition to the healthcare reform law's tax on high-cost health plans are spearheading a bipartisan letter urging the deficit-cutting supercommittee to leave employer-sponsored plans alone.
Rep. Joe Courtney (D-Conn.) has partnered with Rep. Tom Cole (R-Okla.) in a sign-on letter opposing proposals to cap and phase out the tax exemption on the health plans that some 160 million Americans get through their employers. Both the Simpson-Bowles and Domenici-Rivlin deficit plans have called for an end to the plans' special tax treatment, which is estimated to cost the federal government more than $250 billion a year in lost income and payroll taxes while driving up healthcare use by patients who don't know its real costs.
The Courtney-Cole letter argues that much of the extra revenue for the government would be moot because many employees would become eligible for Medicaid or private insurance subsidies under the healthcare reform law.
"Efforts to cap or to eliminate these tax exclusions would have far reaching consequences that would not only reduce health coverage for millions of Americans, but would also increase long-term federal spending obligations," the letter states. "Considering these consequences would negate federal tax income generated from the change and would have little impact on reducing our federal debt, we would encourage you to reject proposals to scale back or eliminate tax exclusions for employer-sponsored health coverage."
More than 100 members of both parties have already signed on to the letter. The deadline is Monday.