The Treatment

A V.a.t. For Health Care? Stay Tuned.

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The AP's Erica Werner (get used to seeing her name on stories like these) obtained a list of health care financing options that the House has been considering: Taxes on soda and alcohol, income taxes on the wealthy, and a Value Added Tax (V.A.T.). A cap on the exclusion for group health benefits is also under consideration.

Right off the bat, this is significant for two reasons. First, this means the House is willing to find funding from sources outside the health care system itself. The inability, or refusal, to do this is a major reason why the Senate Finance Committee is determined to keep its bill at or below $1 trillion total; it just isn't possible, at least in any politically realistic universe, to get more than that from within health care.

Second, the V.A.T. is in there. I have been under the impression--based on a few conversations--that nobody was taking the option seriously, despite some media reports to that effect. This suggests I was wrong. At the very least, a V.A.T. is part of the conversation.

If so, that's a really good thing. Other countries fund their health systems with a V.A.T. And the policy rationale for it is strong.

Update: Ezra isn't so thrilled. I disagree and will explain why later because, hey, how often do he and I disagree? 

--Jonathan Cohn 

 

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