Politics

Updated October 08, 2009

House Democrats Search for Way to Fund Government-Run Option

By Jessica Weinstein

 - FOXNews.com

House Democrats, committed to the so-called public option, told FOX News they are considering a windfall profits tax on insurance companies as a way to pay for high health care costs.

House Democrats, committed to a government-run health care option, told FOX News they are considering a windfall profits tax on insurance companies as a way to pay for pricey health care proposals Thursday.

Rep. Gerry Connolly, D-Va., said that Democrats consider it a better alternative than the Senate's excise tax on 'Cadillac' health plans,' which he believes will be dead on arrival in conference.

Democrats are interested in a windfall tax, not because the insurance companies are villains, but because they are huge stakeholders, Connolly said.

He added that without action, insurers will get a "free ride at the expense of American taxpayers."

Neither Connolly nor Rep. Henry Waxman, D-Calif., put a price on the tax or how much it was expected to bring in.

The two main ways to pay for the so-called public option -- according to House Democrats -- are Medicare rates plus five percent or individually negotiated rates that are 10 to 15 percent below prevailing insurance rates.

Connolly told FOX News that most Democrats favor the Medicare plus five option.

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