On July 31, the Senate Finance Committee held another hearing as part of a series of hearings, forums and other events meant to identify challenges and opportunities for the health care reform debate in the 111th Congress.

The hearing, “Health Benefits in the Tax Code: The Right Incentives,” focused on how tax code changes to employer-sponsored health insurance premiums could fund comprehensive health care reform to cover the uninsured.

Senate Finance Committee Chairman Max Baucus (D-Mont.) referred to the tax subsidies for employer-sponsored health benefits, which exclude premiums paid by employers from taxable income for employees, as "the third largest government entitlement for health care" after Medicare and Medicaid.

The hearing attempted to gain clarity on the need to reform the tax subsidies utilized by employers while maintaining confidence and security by those who currently receive health benefits from their employer. Chairman Baucus noted that “we cannot continue on our current path” and that Congress needs to “fix what’s broken, without breaking what’s working.”

Witnesses in the hearing noted that it would take approximately $150 billion to cover the 48 million uninsured in the United States. The federal government currently receives $250 billion less revenue every year through employer sponsored tax subsidies.

While the money exists to make fundamental changes to the health care system, Chairman Baucus noted that Congress “has learned from past attempts at health care reform that too much disruption can backfire.” Chairman Baucus said that ending the employer role in providing health care "might be too much change," but "all of us recognize that our system is unsustainable."

The hearing concluded with a statement by Chairman Baucus that the Committee will reconvene in September to continue the discussion on health care reform to inform the debate for the 111th Congress.