Paying for Health Care Reform

President Obama’s ambitious health care reform plans may have run into an immovable object – money.

In order to move forward on his plan the President has to find and/or reallocate something on the order of a trillion dollars or so.

One means of expanding health care coverage while containing health care costs is “efficiency” a fuzzy and hard to predict concept at best, especially while expanding insurance coverage.

Other potential means are been discussed by various constituencies, in no particular order:

Taxing the rich (also discussed to solve the deficit and other problems)

Tax some or all employer-paid health care benefits

Tax soda

Tax all sorts of “sin” products

Broaden the Medicare tax base

Cut payer reimbursements, possibly offset by insuring most Americans

Create new reimbursement systems for providers, perhaps “outcomes based”

Reduce or eliminate the tax sheltering benefits of Flex Savings Arrangements (FSAs)

Alter Health Savings Accounts (HSAs)

A national value added tax (VAT) or sales tax


Accomplishing this in the midst of a nasty and deep national recession may prove to be difficult if not impossible, but it appears Congress is going to move ahead and give it a try in the next few months.