Commentary | Budget, Taxes, and Public Investment

Exposing some health care urban legends

Health care costs have been a trivial driver of overall wage trends. Supporters of the 40 percent excise tax on higher cost health plans contained in the Senate health bill often make outsized claims about its beneficial effect on wage growth. EPI’s new research shows that these claims are based on a misinterpretation of wage trends from the late 1990s, when overall health care spending increases slowed down and wages increased across-the-board.

Listed below is an EPI report on this issue, as well as a “Dear Colleague” letter organized by Rep. Joe Courtney (D-CT), who collected 190 signatures from House members who have stated their opposition to the tax, and a compendium of 18 reports and articles from government and private-sector organizations that have analyzed the harmful effects of the excise tax on higher-cost health plans.

Read press release

Listen to a Jan. 7, 2010 press conference call on the health care excise tax:
[listen (streaming)] [download MP3]

Employer Health Costs Do Not Drive Wage Trends
By Lawrence Mishel, EPI Issue Brief #269

Compendium of Reports on the Senate Health Benefits Tax

Letter from Representative Joe Courtney to Speaker Pelosi
List of co-signers of Courtney letter, by state [Acrobat/PDF] [Excel]