Susan Shargel’s Healthcare Reform Blog

President Obama has indicated the inclusive, cooperative approach he plans to take on health care reform by focusing on general principles, as opposed to particular policy recommendations, while delegating the drafting of legislation to Congress.

Obama understands that in order to pass a reform bill, he will need widespread bipartisan support. I am concerned, however, that President Obama is already signaling that he will accept “compromises” that will deeply disappointment the hopes and dreams of Americans.

The President and other key legislators have indicated that they are now open to changing the tax status of employer sponsored health insurance. While the goal is to create a new source of revenue for the reform bill, this change would raise taxes on employers and employees. This policy idea, long supported by conservatives, was denounced by Mr. Obama during the campaign when it was a component of John McCain’s health care policy proposal.

During the campaign, Mr. Obama stated that his reform proposal would save an average family of four $2,500 dollars a year. If employer sponsored benefits were taxed the average household with an adjusted gross income of $50,000 to $74,999 would pay $3,100 more in taxes. (source: Congressional Joint Committee on Taxation)

Small businesses, along with their employees will be one of the groups most affected by health care policy changes. Effective health care cost control and the continuation of the tax benefit for employer sponsored insurance are crucial to the future of small business and small businesses are critical for the country’s economic recovery. Between 2002 and 2008, premiums for group health insurance in California have doubled, rising at four times the rate of inflation. Employees are paying an increasing share of their premiums each year, at the same time, benefits are decreasing. Taxing this already overwhelming cost burden is not the answer for today’s employers or employees.

Obama must not sacrifice his health reform principle of, “protect[ing] families’ financial health” in the name of political expediency. The president will need to find a balance between being a cooperative diplomat and a strong leader in order to make good on his promise of real change for our health care system.