Health Care For America Now

An agreement has been reached that would alter the excise tax in the Senate health care bill to exempt millions of middle class workers from a tax on their health care benefits. The deal would:

• Raise the threshold at which family plans are taxed from $23,000 to $24,000 per year in 2013. The threshold for individual plans would be $8,900.
• Exempt dental and vision costs from that calculation beginning in 2015 (which could raise the overall
  threshold as much as $2,000).
• Raise the threshold for higher cost plans in these categories: plans that have large numbers of women and/or older workers in them, plans that cover high-risk professions (affecting 9 million workers), and plans that cover retirees age 55 and up.

The $24,000 threshold will also move upwards if health care costs inflate more than expected in future years. In other words, people won't be penalized if insurance companies, doctors, and drug companies accelerate their rate increases.

There are also features of the deal that would ease the transition into this tax or otherwise allow workers to seek more beneficial arrangements that don't cut their benefits or raise their costs:

• States with high health care costs will see thresholds for their workers temporarily raised, affecting more than 38 million workers
• State and local employee benefit plans and union-negotiated plans would have five years to renegotiate their agreements before the tax is applied, a window that is typically given when federal laws affecting workers are enacted so that hard-won agreements will not have to be immediately renegotiated

And there's a final piece that will make the entire system stronger: Union-bargained plans have the option of purchasing their insurance on the newly-created health insurance Exchange in 2017. More people buying insurance in the Exchange means more leverage for people against the insurance companies. Allowing these large plans into the Exchange will help everyone who buys insurance in the Exchange to get lower prices and higher quality.

There is no doubt this new deal is a big improvement over the original Senate language. It keeps millions of middle class workers from having their benefits taxed, and it makes the Exchanges stronger.

Though the excise tax hasn't been completely abandoned, a step has been taken towards finishing reform right. And there are more things to fight for, like national exchanges, stronger insurance regulations, employer responsibility, and a public health insurance option. Congress and the President must listen and fix these issues so reform can work for everyone.