At least once every ten years for the last century, the United States has attempted to reform its health care system. This decade's attempt is inspired by a new President, a strong Democratic majority, and more than anything, health care costs with no sign of slowing. Health care spending is growing faster than any other segment of the economy and its only getting worse. The Centers for Medicare and Medicaid estimates total health care spending will rise above 20 percent of GDP by 2018.
Policymakers on Capitol Hill are hosting a series of round tables on how to expand access to the nearly 50 million uninsured Americans, improve quality health outcomes, and finally, how to pay for this system change.
On Monday, the leaders of the Senate Finance Committee released the final of three papers on the task of paying for health reform. The paper details several options to pay for necessary reforms, including health system savings (e.g. eliminating wasteful spending), and taxation ideas (e.g. eliminating health care subsidies). The committee's third idea, "lifestyle tax proposals," intends to generate new revenue.
Specifically, the Finance Committee is proposing to raise and standardize the tax on alcoholic beverages and create a new excise tax on sugar-sweetened beverages. The taxes are designed to discourage unhealthy behaviors which lead to increased health costs through chronic disease.
Sometimes referred to as "sin taxes," excise taxes on tobacco products have proven extremely effective in reducing smoking initiation (especially among adolescents), and helping people quit the habit. Opponents of tobacco taxes argue these disproportionately impact low-income individuals, as these communities are more sensitive to price changes. A similar argument can be made of the newest tax ideas. An added layer, research shows that liquor stores are more prevalent in low-income and minority neighborhoods and grocery stores are just the opposite. Perhaps a funding initiative to increase healthy choices is the appropriate pathway towards chronic disease prevention.
The most important question - will the experiment work -- how much more are you willing to pay for that Coke-Cola? And since Diet Coke is exempt from the sugar-tax, are you willing to change your behaviors?
Catherine Morrison, Legislative & Public Affairs Associate
