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Obama Won't Rule Out Taxing Employer Health Insurance

Posted on 17 Jun 2009

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President Barack Obama said he wouldn't rule out a proposal in Congress to tax employer-provided health-insurance benefits as a way to pay for his health-care plan.

"I don't want to predetermine the best way to do this. I’ve already put forward what I think is the best way,” the president said in an interview with Bloomberg News. “Let me see what comes out of the Hill and we’ll have that debate then.”

Obama said he prefers to pay for his plan by limiting tax deductions for the wealthiest Americans and reining in the rate of growth of medical spending.

Costs can be trimmed by using “comparative effectiveness” research to determine what treatments work best at the lowest cost, Obama said, and to reimburse doctors and hospitals by outcome rather than by the amount of treatment.

The president has made overhaul of the U.S. health-care system a top priority, casting the issue as a social and economic “ticking time bomb.” Health-care spending in the U.S. consumes about 18 percent of the gross domestic product, according to the president’s Council of Economic Advisers, and 46 million people remain uninsured.