President Barack Obama is signaling he is in favor of taxing high-end health insurance plans. He gave that message on Wednesday to House Democrats who largely oppose the tax.
Obama defends the tax as a way to drive down health costs.
"I'm on record as saying that taxing Cadillac plans that don't make people healthier but just take more money out of their pockets because they're paying more for insurance than they need to, that's actually a good idea, and that helps bend the cost curve," the president said in an interview with National Public Radio just before Christmas. "That helps to reduce the cost of health care over the long term. I think that's a smart thing to do."
The tax is part of the Senate's healthcare overhaul bill, and would help pay for coverage for millions of uninsured Americans.
But House Democrats said they want to raise income taxes on high income individuals instead. They want to increase income taxes on individuals making more than $500,000 a year and couples making over $1 million, which would raise $460 billion over 10 years to pay for the bill.
The Senate wants to tax insurance companies on plans valued at over $8,500 for individuals and $23,000 for couples, raising $150 billion.
A conference call of the full House Democratic caucus is set for Thursday.