While Democrats and Republicans spar over whether the middle-class or wealthy Americans should pay for a chunk of the nation’s health care reform, a new plan to tax insurers may help move debate forward.

John Kerry

A proposal by Sen. John Kerry (D-Mass.) would impose an excise tax on health insurers’ most expensive plans, generating tens of billions of dollars, according to Bloomberg, and could break a Congressional deadlock over how to pay for reform.

Three of the five Congressional committees reviewing legislation on health care reform have passed legislation, but the issue over who should pay for a bulk of the changes has tied up the remaining committees and caused a bipartisan split on the issue.

In an interview on Bloomberg’s “Political Capital with Al Hunt,” Sen. Charles Grassley (R-Iowa) said the Senate Finance Committee, of which he is the ranking member, is “taking an intense look” at Kerry’s proposal.

A rate for Kerry’s plan has not been specified, but published reports indicate it would only apply to the most expensive insurance products. Some see the tax as having benefits including discouraging the overuse of healthcare services, with an incentive for employers to buy less generous and less expensive plans to avoid the tax, and putting pressure on insurance companies to reduce premiums, according to a recent report in the Boston Globe.

Sen. John Kyl (R-Ariz.) told Bloomberg “there’s very little evidence the tax on the insurer would have an impact on the insured’s behavior, which is the whole point.”

“Secondly, it’s a tax on employment since it clearly would be passed on to employees,” he said.